by Joshua Zeitz
LBJ also vigorously jawboned labor and business into holding down prices and wages. He personally intervened in negotiations between the United Steelworkers of America and the major steel companies in late 1965. The union demanded a 5 percent wage hike; the operators warned that such a contract would necessitate price increases above the administration’s 3.2 percent guidelines. “No price increase,” the president ordered Califano, gesturing with his right hand (thumb and forefinger held in a tight circle). “None. Zero.” Convinced that his labor secretary, William Wirtz, was too closely in sympathy with the USWA, he enlisted the UN ambassador, Arthur Goldberg, a former labor secretary, and Clark Clifford, who served as counsel to Republic Steel, to hammer out a settlement. When the president announced an agreement on September 3, Walter Heller, the former chairman of the CEA and architect of both the Kennedy-Johnson tax cuts and the War on Poverty, congratulated him on a “masterful” resolution of the “steel crisis. . . . You struck a key blow for continued cost-price stability and the country’s economic health.” Heller’s laudatory note was premature. Increasingly, the administration found that no amount of jawboning could restrain the inflationary effects of mounting budget deficits—the direct impact of a war whose costs continued to climb unabated. Arthur Okun, who became chairman of the Council of Economic Advisers toward the end of LBJ’s presidency, later acknowledged that “within the administration, there were no illusions: it was clearly recognized that the public budget and not private action was the engine of inflation.” Yet when New York’s mayor, John Lindsay, agreed to a new contract with city transit workers that provided a 6.3 percent wage hike, the president censured such an “irresponsible action” that would “only bring on an inflation that would damage us all.” When in 1966 steel manufacturers walked away from their prior year’s pledge and raised prices, Ackley decried their disregard for the “public interest.” Later that year, the major airlines agreed to a 4.9 percent wage increase in contract negotiations with the International Association of Machinists and Aerospace Workers (IAM) union, effectively smashing “all existing wage and price guidelines now in existence,” the IAM’s president acknowledged. Even the president admitted to his cabinet that he had “no power to tell either party what they had to take. . . . This is a complicated and difficult problem.”
Throughout 1966 and 1967, the administration plied this “nickel-and-dime” strategy, in Schultze’s words, to slow federal spending by delaying pre-authorized initiatives. “You would make them wait a month between getting a new contract, or you would tell them to go slow on putting the power house in. But technically it is just difficult.” Try as they might, White House officials could not tell local officials who had already issued bonds, cleared land, and completed site remediation for the construction of a new federally subsidized hospital that they would have to wait another year to break ground. The politics associated with such decisions were impossible.
It did not help matters that liberal congressmen continued to authorize spending on Great Society programs at levels far in excess of what the administration requested or approved. The administration had raised “great expectations,” a Democratic congressman admonished John Gardner. Liberal Democrats expected the president to make good. Hugh Carey, a Democrat from New York, lamented that Congress was being “forced to make a choice here between books and bullets.” After all, polling suggested that while wide support still existed for the war effort in Vietnam, fully 72 percent of Americans opposed cuts to domestic programs as a trade-off for increased military appropriations. In pledging that America could do it all—have guns and butter, fight poverty and communism, ensure sustained economic growth with low inflation—the president had promised more than he could deliver. James Scheuer, a congressman from New York, attributed liberal frustration to the administration’s “own eloquence and your own creativity in whetting our appetites.”
In mid-1966, Califano and Cater were able to delay for one year a scheduled increase in the formula that determined eligibility for ESEA Title I funds, from a family poverty floor of $2,000 to $3,000. But Congress added new buckets of categorical aid for handicapped children and children in foster homes and thereby blew through the administration’s budget authorization figure by $1.7 billion—or 39 percent of the original request. Such actions confirmed Johnson’s long-standing conviction that once implemented, government programs were difficult to extinguish. He was certainly disinclined to veto the reauthorizations of his signature programs. But as prices and wages began to climb, the White House found itself in the unusual position of urging restraint—in part because of the need to keep inflation in check, in part out of the recognition that it would require the buildup of bureaucratic muscle memory to administer programs already on the books.
In a sharp memorandum to Califano in December 1965, Schultze urged against a flurry of “new legislative proposals. . . . Adequate funding will be a very difficult problem even if there are no new programs. . . . In the present budget situation I see very little hope of significant expenditure building up on existing Great Society programs. . . . As I see it, the situation will get worse instead of better unless we decide to digest what we already have on our plate before reaching for more.” When Schultze warned that “raising hopes and crushing them because of budgetary limitations is worse than leaving the public in the dark about the new programs,” McPherson wondered if the administration should preemptively broadcast that it was “not closing the door on the Great Society; we are just muting our welcome to it because of Viet Nam. These programs—Medicare, education, area development, are after all going into effect, and we could gain some mileage from identifying ourselves with them more meaningfully. Also, it would take the edge off the limited program we will offer this year.” They were stuck in a corner, unable to square with the public but under pressure from powerful liberals like Andy Biemiller, a former congressman and now the top lobbyist for the AFL-CIO, who delivered a hard warning from the federation’s boss, George Meany: “The Great Society programs must not be gutted because of the war in Vietnam.” In a flash of anger, Johnson snapped at his domestic policy chief. “[We’re] getting the hell beaten out of us” on Capitol Hill, he barked. It was Califano’s responsibility to keep spending in check. When Califano replied that he would confer with Larry O’Brien, the president erupted in rage: “I’m talking to you. You do it. You’ve got to mount this Congress like you mount a woman.”
Despite these entreaties, the unemployment rate dipped from a high of 5.7 percent when LBJ took office to 3.5 percent in mid-1968—well below the full employment threshold. Inflation, which hovered around 1 percent throughout most of JFK’s term in office, cracked 5 percent as Johnson left the White House in 1969—nowhere near the heights of the “Great Inflation” of the 1970s, but still striking in the context of recent memory. Califano and others worried that the administration’s obfuscation of the hard and soft costs of the war—most notably, LBJ’s refusal to request a tax increase—“was taking a toll on his credibility. Many economists were beginning to wonder whether he was serious about reining in inflation. . . . Rising war costs and funds for Great Society programs were stretching the outer limits of the President’s ability to manipulate the federal budget.”
By the end of 1967, many stalwart defenders of the Great Society grew despondent over the administration’s tightfisted approach to budgeting. In December, after the Budget Bureau took “some real whacks” at the HEW budget, Secretary John Gardner—a respected education specialist under whose leadership the department had breathed administrative life into some of Johnson’s most cherished programs—flew to the LBJ Ranch to plead for a restoration of funds. Huddled with LBJ in the First Family’s living room, Gardner seemed a man in “turmoil,” in Douglass Cater’s recollection. The secretary was “always a little bit reserved around the President. He’s a quiet kind of man, and they never had an easy conversational relationship.” The meeting unfolded poorly. As he escorted them to the
ir plane for the flight back to Washington, the president threw his arm around Gardner’s shoulder and, with apparent sincerity, assured him that the days of austerity would soon come to an end. “Don’t worry, John. We’re going to end this war and then you’ll have all the money you want for education, and health, and everything else.” Cater and Gardner said very little on the journey home, but it was clear that the secretary “had lost faith that Johnson could stay on top of the situation.” Within three months, he resigned his post. LBJ nominated Wilbur Cohen to replace him.
Sargent Shriver, too, requested a larger appropriation for the Office of Economic Opportunity. As early as December 1965, when Schultze first began to impose restraint on domestic spending, Moyers wired Johnson that the OEO director was “tired and disheartened,” convinced that he was on the president’s “—— list.” “I again tried to disabuse him of this,” Moyers continued, “and told him not to let your firmness on budget be taken for personal ill will. If this were [the] case every official in Washington at this time of the year would think that he is on that —— list.” Two years later, Congress took a 14 percent bite out of Shriver’s proposed budget for the coming fiscal year; after meeting with Schultze, the OEO director determined that he would likely need to “take a rather sizeable (15–20%) cut in ongoing local programs” in order to maintain initiatives already live in the field. Doing so would carry political consequences, he warned Johnson. However controversial some community action programs were, mayors generally supported the bulk of his office’s initiatives and wanted “more jobs programs,” “more day care programs,” “more help for the aged,” and “more Follow-Through with Head Start children.” On a visit to the LBJ Ranch, Shriver implored the president to consider committing between $6 billion and $8 billion annually to the War on Poverty. Still a true believer, he remained firm in the conviction that the administration’s programs were “reaching something like a third or a quarter” of poor people. “Look, Mr. President,” he began, “that is what is needed financially to eliminate poverty in our country. With this amount of money, I think we really hold out the hope of eliminating poverty over a ten-year period.” Johnson was dumbstruck. “Sarge,” he replied incredulously, “we can’t go from a program of one billion or one billion and a half to six billion.” One of the director’s aides would later affirm that Shriver honestly “believed that this nation was wealthy enough to wage both a War on Poverty—on a much bigger scale than the war we were waging on poverty in terms of dollars and cents—and also the war in Vietnam [with] the amount of resources it was taking at that period of time.” Johnson disagreed. Like Gardner, Shriver stepped down in March 1968.
Reporters who had grown skeptical of the administration’s honesty also began to note the war’s deadening effect on the Great Society. A well-placed journalist frankly advised McPherson that “a lot of the Congressional dissatisfaction with the Administration stemmed from the fact that domestic programs were being under-financed as a result of the Vietnam War” and believed that the White House could make few further strides in civil rights “so long as money is being drained off at such a rate for the war.” Even as popular backlash against the Great Society gathered in 1966, influential columnists remained firm in their support for the opportunity theory that underlay much of Johnson’s domestic agenda. That year, Joseph Alsop privately urged a “colossal” commitment of resources aimed at providing residents of urban ghettos with better jobs and housing and a “massive school building program, intensive recruitment of teachers, high pay, better school books.” Many members of the fourth estate worried that Vietnam—the financial scope of which the administration continued to obscure—would limit the president’s course of action. White House aides assured friendly journalists that “there was no reason to believe that Congress would take Vietnam expenditures and put them into social programs” if the United States were summarily to pull out of Southeast Asia. But the argument fell on deaf ears.
The White House understood that the war had also undercut the administration’s standing with some of its most natural allies in and out of government. Even before he joined the White House staff in mid-1965, Califano—who was then still Robert McNamara’s chief aide at the Pentagon—warned Horace Busby that many of his peers in the other cabinet agencies “move in liberal circles” and were “not supporting the President’s position in Vietnam.” Months later, when Califano, McPherson, and Cater visited college campuses to enlist prominent academics in a new round of domestic policy task forces, they met with stony resistance. “So long as the President persists in these policies,” wrote a prominent historian, “there is no hope at all for expanding the Great Society. So count me out.” Another scholar lamented that “the war has contributed to a profound alienation from this Administration of intellectuals and social scientists whose efforts would be essential to the domestic revolution required.” Though he was “very enthusiastic” about the Great Society, the poet Robert Lowell publicly embarrassed the administration when he rejected an invitation to attend the White House Festival of the Arts. “How nice it is to have a man who gives what liberals have asked for for generations,” the New Republic derisively observed of such displays, “plus the fun of kicking him around too.”
McPherson privately fumed at those “neurotic and demagogic ‘intellectuals’ whose stock in trade is opposition to the Establishment,” but he considered theirs a minority opinion. In addition to its partnership with leading academics in the formation of domestic policy, the Johnson White House was quietly establishing itself as the greatest patron of the arts and sciences in modern American history. The administration was spearheading the establishment of the John F. Kennedy Center for the Performing Arts and the Hirshhorn Museum and Sculpture Garden; it was vastly expanding the scope of the Smithsonian Institution and funneling money into space exploration, medical research, and the humanities. McPherson was optimistic that “a beautiful and creative Washington will benefit generations born long after the Viet Nam conflict is stilled.” But in the short run, he vastly underestimated the potential for Vietnam to isolate the LBJ White House from the very artists, intellectuals, and scientists it had worked so assiduously to benefit.
Economics made Lyndon Johnson’s presidency and now threatened to kill it. “Stable, rapid, noncyclical, noninflationary growth” was the “underpinning of the Great Society,” James Tobin, a consultant to the CEA, later argued. Arthur Okun added that as “long as the economy was growing rapidly and making progress, [Johnson] really did see an opportunity for shifting things to the public sector, for shifting the distribution of public services toward the disadvantaged without having anybody feel it very much because it would be sharing the gains rather than asking for belt-tightening.” Between 1962 and 1972, the proportional cost of social welfare programs rose from roughly 25 percent to 41 percent of the federal budget and in the same time more than doubled as a portion of GDP, from 4.3 percent to 8.8 percent. But the very same faith in the limitless potential of a “robust noninflationary economy”—as Califano later termed it—led LBJ and his advisers to assume they could also fight a war in Vietnam without anybody feeling it. Liberals in the Kennedy administration had openly spurned Dwight Eisenhower’s New Look policy, which assumed that American resources were finite and that the country would have to pick and choose its ground battles carefully. The same logic carried over into the Johnson White House. “Let no one doubt for a moment that we have the resources and we have the will to follow this course as long as it may take,” LBJ insisted. When the days of noninflationary growth came to an end, the administration could no longer promise guns and butter. It had to choose.
• • • • •
From the earliest days of their acquaintance, Lyndon Johnson reviled Robert Kennedy, who was then a lowly Senate staff aide, as a “snot-nosed little son-of-a-bitch.” Ever eager to diminish others to aggrandize himself, he would greet Bobby in the hallways as “sonny boy.” It is difficult to pinpoi
nt the moment when the two men developed their all-consuming hatred for each other. It might have been in late 1959, when Jack dispatched his brother to the LBJ Ranch in Texas to determine whether Johnson intended to run for the Democratic presidential nomination the following year. In a deliberate attempt to humiliate JFK’s younger brother, Johnson took him deer hunting and purposely handed him a high-caliber rifle with an especially powerful recoil. It knocked Kennedy to the ground. “Son,” Johnson said, “you’ve got to learn to handle a gun like a man.”
It might also have been several months later, when LBJ’s campaign spread (factually correct) rumors that Jack Kennedy was concealing a serious illness and reminded liberal delegates to the Democratic National Convention that the candidate’s father, Joseph P. Kennedy, had opposed Franklin Roosevelt’s war preparedness policies in the late 1930s. “Lyndon Johnson has compared my father to the Nazis, and John Connally . . . lied in saying my brother is dying” of Addison’s disease, Bobby complained to one of Johnson’s close aides. “You Johnson people are running a stinking damned campaign, and you’re gonna get yours when the time comes.”
