Fire from the Left

The forces that once most ardently supported the economic policies of the Kennedy Administration are showing increasing disenchantment with the way the Administration is handling the economy. For months, a number of labor leaders, Democratic legislators and liberal economists have privately expressed their dissatisfaction, but their complaints are now breaking out into the open and causing the Administration chagrin and embarrassment.

Into a Tight Corner. Last week in Manhattan, A.F.L.-C.I.O. President George Meany called advancing automation "a curse" and repeated his call for a 35-hour week--both positions that the Administration's economists have rejected. Fortnight ago Walter Reuther told a meeting of union chiefs that Walter Heller, the President's chief economic adviser, had "understated" the unemployment problem. Criticism of specific Administration economic proposals has also been coming with more regularity from such academic economists as Yale's William Fellner, Vanderbilt's Rendigs Fels and Michigan State University's Charles Killingsworth, who recently charged that "the Administration's economic balance is seriously incomplete."

In perhaps the unkindest cut of all, Kennedy men have been coming in for intensified attacks in Congress from such liberal Senators as Paul Douglas, Albert Gore and Abraham Ribicoff. The outcry was evident last week in the Senate Finance Committee, where Democratic liberals roundly chewed out Heller when he testified on the tax bill. Gore sarcastically criticized Heller's economics, and Ribicoff snapped: "I think the Administration is painting itself into a pretty tight corner. You are going to have to spend more." Heller got such a rough going-over from the liberals that conservative Harry Byrd hardly had to do any work.

Into One Basket. The liberal dissatisfaction is based largely on the belief that the Administration has tied practically its entire economic program to a tax cut as its solution to all that is amiss in the economy. The Administration's theory is that the way to get at U.S. unemployment, which stays at a persistently high figure (5.7%), is to put more money in the consumer's pocket to increase demand and more in the corporation's coffers to encourage investment in plant and equipment, which in turn creates new jobs.

The liberals were distressed to begin with that the Administration so readily gave up the battle for tax reform in its eagerness for a tax cut, and Senator Paul Douglas complains of "huge truck-holes in the tax system." Many liberals insist that the tax cut alone will not give the economy the extra boost it needs to cut unemployment sufficiently. They contend that labor productivity has been growing so fast that the nation's productive capacity is greater than Heller's Council of Economic Advisers calculated when it settled on an $11 billion tax cut--and that such a cut will create less employment than expected. With their usual eagerness for public works, they believe that greater Government spending must accompany a tax cut, criticize Kennedy's promise to hold the spending line in fiscal 1965.

Doing the Possible. The annoyance in the Administration's voice comes from the belief that it already has enough trouble in its efforts to get a tax cut past Congress. "Labor and the liberals should wait until the returns are in before jumping to conclusions," says Walter Heller. Despite the liberal disenchantment, Heller still has some influential supporters. M.I.T.'s Paul Samuelson believes that a tax cut "will do much more to relieve structural unemployment" than many critics believe. Harvard's Seymour Harris, usually one of the most outspoken of the liberal economists, now cautions in the pragmatic Kennedy manner. "I know a lot of liberals would like to have some spending," he says, "but this is not politically possible. The President has to do what is politically possible."

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