THE CONGRESS: End of a Dream

A tax cut had become the Democrats' biggest political issue in the 84th Congress. In the House, Speaker Sam Rayburn managed to push through a $20-a-person cut, despite opposition by the Eisenhower Administration. Majority Leader Lyndon Johnson knew that he could not get the flat $20 cut through the Senate, so he designed a tax bill that was a politician's dream: it seemed to help the little fellow, to hurt the bigger fellow, and to help balance the budget. Nevertheless, the Senate last week voted down Johnson's dream.

Byrd on the Floor. Most Democrats had flocked to Johnson's side with enthusiasm. Oklahoma's big Bob Kerr and Illinois' professorial Paul Douglas indulged in a colloquy designed to heap ridicule on the opposition. Douglas asked if Kerr would like to know why a part of the Eisenhower Administration's tax policy "is like the Latin verb aio."* Kerr allowed that he would. Smirked Douglas: "It is present, it is imperfect, and it has no future."

But beneath the Democrats' fun, there was a sobering fact. The party's two finance experts, Virginia's Harry Byrd and Georgia's Walter George, thought that Lyndon Johnson's political dream was a fiscal nightmare. Johnson's plan affected several phases of tax policy, but its heart was a $20 cut for each taxpayer plus a $10 cut for each dependent (except the spouse), balanced against repeal of the Eisenhower Administration's tax credit on stock-dividend income. Johnson maintained that the proposal would add almost $5 billion to U.S. revenue. But Harry Byrd, a better man with tax figures than Lyndon Johnson, said that it would result in a net loss of nearly $600 million. Tax Expert Byrd's conclusion: Johnson's jerry-built plan would dangerously weaken the nation's tax structure.

Bridges in the Rooms. While Byrd effectively operated as the floor manager against the tax cut (and Delaware's Republican Senator John Williams as the G.O.P.'s most persistent orator). New Hampshire's Republican Senator Styles Bridges ran the campaign in the cloakroom. Operator Bridges, an expert in dispensing political favors, collected some of his many I.O.U.s to keep Republicans in line. Some farm Senators, e.g., Idaho's Herman Welker, North Dakota's Milton Young and South Dakota's Francis Case, all up for re-election next year, seemed to be wavering toward a tax cut, until Bridges urged them back. Wisconsin's Joe McCarthy was itching for a chance to plant a dirk in the Administration's side, until he was reminded that Bridges stood by him in the censure episode.

From his position outside the arena, Secretary of the Treasury George Humphrey, who wanted only a one-year extension of present corporate-income-tax rates and some excise taxes, fired in a few rounds. Characterizing Johnson's plan as a "political quickie gimmick," he said: "You don't help to increase the purchasing power of the 'little folks' by repealing the laws which are helping to make their jobs."