Nation: Nixon's 1970 Worries: Economy and Environment

THOUGH he managed to escape from Washington to the Southern California sun, last week was a chilly, somber time for President Richard Nixon. While the war in Viet Nam goes grimly on, it is no longer his chief preoccupation; the polls show and his Democratic opposition concedes that Vietnamization and U.S. troop withdrawals have relieved, at least for now, the political pressures of the war on the President. Instead, Nixon has turned his attention to the two questions that have cast their shadows over the politics of 1970: inflation and the quality of the American environment.

Before he left the capital, the President made a show of reluctance as he signed a sweeping income tax revision bill that also includes a 15% increase in Social Security benefits (TIME, Dec. 26). The Treasury estimates that the new legislation will increase federal revenues by $3.7 billion in the first half of 1970 and by $2.7 billion in the fiscal year that begins July 1. But Nixon fears that the additional revenues will be eaten away by overly generous congressional appropriations, by the Social Security hike and by a continued rise in the Government's fixed costs. He warned that an inflationary deficit in the federal budget now "would be irresponsible and intolerable." For the coming fiscal year beginning July 1, Nixon added, "I shall take the action I consider necessary to present a balanced budget."

$200 Billion Neighborhood. To spur him on, there is the lesson of what is happening in the current fiscal year, when federal spending may well work out to total more than Nixon's hoped-for ceiling of $192.9 billion. The fat $5.8 billion surplus that the Administration once so cheerily anticipated will probably get much skinnier as the economy slows down and tax collections shrink with it. Nixon damned the Democratic-controlled Congress for putting his surplus in peril. "In the very session when the Congress reduced revenues by $3 billion, it increased spending by $3 billion more than I recommended," he said.

The Administration's planning for the next fiscal year is clouded by varying guesses about how serious the 1970 business slowdown may become. Presidential Assistant John Ehrlichman and Budget Director Robert Mayo were working with Nixon in California to put the final touches on the new budget. Part of their difficulty is with what Washington budget watchers call "the un-controllables": unavoidable automatic rises in payments for Medicare, Social Security and farm support. Another factor is the price of funding the national debt, a cost that has been driven up by the high interest rates of the Government's own anti-inflationary tight-money policies. Educated estimators put the size of the upcoming budget for fiscal 1971 at between $198 billion and $202 billion.