Government: Lyndon's Budgeteer

The man to watch in Washington these days, when it comes to economy and economics, is a balding, moonfaced fellow with few of the outward trappings of power. Each day last week, he strode briskly on the three-minute journey from his office in the Executive Building to Lyndon Johnson's office, where he and the President held earnest conversations; Johnson also telephoned him from the presidential jet en route to Texas. At week's end, when Johnson announced a lower 1964 deficit and a greater budget cut than earlier estimates, there was, typically, no sign of the man who had done most of the work and made many of the cuts possible: Kermit Gordon, 48, Director of the Budget.

More Tightfisted. Gordon is eminently discreet, carefully avoids the limelight and insists that he is only a staff worker for the President. But he has quietly emerged as one of Washington's rising powers, and his influence on economic policy within the Administration is steadily widening. That influence has been enlarged by the situation of the Government's two chief advisers on economic policy: Chief Economic Adviser Walter Heller will leave Government service this fall, and Treasury Secretary Douglas Dillon does not expect to be kept in his post for another Johnson term. Gordon has let it be known that he intends to stay, already has more personal contact with Johnson than anyone outside of his inner staff.

The close relationship between Gordon and Johnson developed within 24 hours of the Kennedy assassination, when the matter of finishing up the fiscal 1965 budget was pressing. Johnson later remarked that he and Gordon spent "37 days and nights' work" wrapping up the $98 billion budget. Gordon, by nature a more tightfisted director than his predecessor, David Bell, had no trouble executing the slashes Johnson wanted and has been steadily cutting back ever since. Working for a President obviously fascinated by the political potential of budgeteering, he is being asked to perform tasks not ordinarily given a Budget Director.

Sometimes a Whiplash. Gordon is a key figure in planning the economic program being drawn up for 1965 and beyond. He helped draw up, with Walter Heller, the revised stand-by tax-cutting power the President will probably ask Congress to approve as an anti-cyclical weapon, is working on a new scheme to funnel excess federal revenues back to the states whenever a surplus is generated. His strong feeling that federal spending is too cumbersome to effect short-range control of the economy will probably sway Johnson away from the stand-by public works and other spending devices that were favored by the Kennedy Administration. When he hears complaints about federal programs, Johnson sometimes uses Gordon as a whiplash, phoning the appropriate agency and saying: "I've got the Budget Director at my desk. What's the story on this?"