Lyndon B. Johnson: November 22, 1963 – January 20, 1969
I. Introduction
1. Two hours after president John F. Kennedy was assassinated on November 22 1963, Vice President Lyndon Baines Johnson was sworn into the presidency on Air Force One in Dallas.
2. Despite deterioration in South Vietnam, Lyndon Johnson focused most of his time and energy on domestic affairs. Biographers and analysts have noted Johnson was neither interested in foreign affairs nor anxious to involve himself in strategic military questions.
i. Economic prosperity would be the foundation for building what Johnson was to call “the Great Society”. In stimulating economic prosperity Johnson was waging what he referred to as his “War on Poverty”.
ii. Two key policy objectives, continued economic growth and reduced military spending, were to provide the economic foundation for greater domestic spending.
3. President John F. Kennedy had left Johnson with an unfinished blueprint for major domestic programs in the area of health, education, welfare, and civil rights.
II. Setting the Domestic Agenda: the Budget and the Tax Cut
1. In January 1963 President Kennedy had proposed in his State of the Union address a $10 billion tax cut. Throughout 1963 the tax cut proposal came under attack from both conservatives and liberals.
i. The economic theory behind the tax cut was that lower taxation would stimulate growth and expansion.
2. Johnson immediately embraced the tax cut proposal when he became president in November.
i. He wanted to pass the tax cut in order to set the stage for enacting his specific domestic programs.
ii. In November 1963 the top economic officials in the administration were Walter Heller, chairman of the Council of Economic Advisers, Kermit Gordon, director of the Bureau of the Budget, and C. Douglas Dillon, secretary of the Treasury. Together, they were known in government parlance as the Troika. Johnson worked heavily with the Troika in establishing the economic basis for his domestic program.
a. Johnson's economic advisers as the most effective way to ensure continued economic growth and move toward a full employment goal
3. Johnson worked hard to establish the budget of 1965 as below $100 billion. Total expenditures were reduced from 101.5 billion to 97.9 billion.
i. That is one reason Johnson was adamant about keeping both the fiscal year (FY) 1965 and 1966 budgets below the $100 billion mark, not an important economic figure but something that Johnson could point to in pressing Congress for the approval of legislative measures needed to enact his social programs.
4. The tax cut was enacted in February as the Internal Revenue Act of 1964.
i. With the FY 1965 budget less than $100 billion, Johnson was able to gain the support of powerful chairman of the Senate Finance Committee, Senator Harry Byrd of Virginia for the passing of the tax cuts.
ii. Arthur Okun, a member of the Council of Economic Advisers, noted: "[The tax cut] was the largest stimulative fiscal action ever undertaken by the federal government in peacetime."
5. Once the interrelated goals of bringing the FY 1965 budget in under $100 billion and a tax cut were achieved, the economic strategy was in place. Then the president could tackle key domestic legislation that was stalled in Congress: the civil rights bill and several education bills.
i. Defense spending would be reduced, partly to keep the budget below the $100 billion mark but also to redirect resources toward the domestic arena
III. The Economy
1. The tax cut was a major stimulus to the economy.
i. Consumer spending on goods and services increased and investment grew.
ii. Unemployment fell from 6% to 4.7% within the next year.
iii. In 1964 the country was in the midst of an economic expansion that would break the previous peacetime record of 50 months by May 1965.
2. To combat concerns of expansion slowing down, in August 1964 the Council of Economic Advisers recommended to the president that consideration be given in the 1966 budget to further fiscal stimuli through increased government expenditures and/or further tax cuts. The November 1964 Troika review again urged the president to consider excise tax cuts and other fiscal stimuli in FY 1966.
3. In 1965 the economy was growing at a healthy rate of $10 billion per quarter. GNP soared from $500 billion in 1961 to over $650 billion in 1965 and the consumer-price index rose by less than 2 percent each of the preceding three years. During the first half of 1965, more revenues than had been anticipated from higher individual and corporate incomes came into the federal treasury. This brought the federal budget into surplus. The unexpected rise in military needs in Vietnam greatly stimulated the economy, especially in the second half of 1965.
IV. The “Great Society”
1. Johnson announced his goal of transforming America into the Great Society on May 22, 1964. The program was to focus on urban renewal, increased housing, improved education and educational opportunities. Also increased job training and opportunities under Johnson’s War on Poverty.
2. The Civil Rights Act proposed under Kennedy was passed into law in 1964 under Johnson.
i. Johnson personally took the case for the Civil Rights Act around the country to rally the people behind it. Finally, on July 2, after the opposition gave in, the Civil Rights Act was signed.
3. The Economic Opportunity Act of 1964 authorized $750 million for jobs and training, for the support of community efforts to attack poverty and promote the health, education, and general welfare of the poor. Its basis was not wealth distribution, but the belief that government can provide the poor with opportunities to earn a decent living and maintain their families in a comfortable living standard. It was a crucial part of Johnson’s War on Poverty, and some programs included:
i. The Job Corps, which provided work, basic education, and training in separate residential centers for young men and young women, aged 16 to 21
ii. Volunteers in Service to America (VISTA), which recruited, selected, trained, and referred volunteers to state or local agencies or private non-profit organizations to perform duties in combating poverty.
4. Programs under Johnson’s War on Poverty received some $10 billion in appropriates between 1965 and 1970. Together with the growth of the economy, the distributive impact of federal policies lifted half the Americans who had been below the poverty line above that mark. Programs were mostly overseen by the Office of Economic Opportunity which was established in 1964.
5. The Urban Mass Transportation Act of 1964 created the Urban Mass Transit Administration and allocated $375 million for large-scale urban public or private rail projects.
6. In his 1966 budget message, presented on January 1, 1965, Johnson proposed:
i. reduced excise taxes
ii. a major increase in Social Security benefits made retroactive to January 1, 1965
iii. an increase in Social Security taxes (to pay for benefits) delayed to January 1, 1966
iv. a comprehensive Medicare plan introduced under the Social Security proposal
7. Congress passed the medical act which provided $6.5 billion for Medicare under the Social Security Act of 1965 for all Americans 65 or over and Medicaid, supported by federal grants to the states, to furnish special help to the poor.
8. The Elementary and Secondary Education Act (ESEA) was passed in 1965. This was an extensive program that provided $1.3 billion for the school systems it reached. It was the first of a series of acts of the Johnson administration that assisted schools, libraries, colleges and universities.
i. federal aid for elementary and secondary schools was not distributed on a general basis but according to a selective formula which took into account the poverty of the school district and the amount of the state's average educational expenses per child
9. Under the Appalachian Regional Development Act of 1965 (ARDA), $23 billion went for economic development of the Appalachian region and for slum clearance and the creation of model urban communities.
10. The National Endowment for the Arts and Humanities Act of 1965 established the National Endowment for the Arts and National Endowment for the Humanities as two separate agencies. Their purpose was to promote the arts and humanity in education and set a balance from the emphasis on sciences.
11. The Voting Act of 1965, which Congress passed in August, eliminated discriminatory literacy tests, provided federal officers to assist black voter registration, and established severe penalties for interference with an individual's right to the ballot. It set in motion, for the first time in a century, the rapid inclusion of blacks in the southern electorate.
i. In demonstration for the cause, Martin Luther King Jr. directed a march from Selma to Montgomery, Alabama. On March 7 1965, the first day of the march, state troopers battered marchers who refused orders to turn back and was known as “Bloody Sunday”. The route was known as the Selma to Montgomery Voting Rights Trail.
12. The Immigration and Nationality Act of 1965 removed immigration quotas that had been in place since the Immigration Act of 1924. An annual limitation of 300 000 visas was established.
13. The Public Broadcasting Act of 1967 established public broadcasting under the new institution, the Corporation for Public Broadcasting. The law initiated federal aid through the CPB for the operation of public broadcasting.
Richard Nixon January 20, 1969 – August 9, 1974
I. The election of 1968
1. It was a turbulent period in America during the 1968 election, with the recent assassinations of Martin Luther King, Jr. (April 4 1968) and the Democratic presidential candidate Robert F. Kennedy (June 5 1968). Race riots caused by the death of Dr. King and mass demonstrations against the war in Vietnam were also occurring across America.
2. The Republican nominee Vice President Richard Milhous Nixon won against Democrat Hubert Humphrey, who replaced Robert F. Kennedy after his death.
II. Nixon’s Domestic Policy
1. “New Federalism” was Nixon’s domestic policy which was announced on August 8 1969. It aimed to direct money and power away from the federal bureaucracy and toward states and municipalities. This was to create a system that could respond more effectively to the needs of the people. New Federalism was re-titled the New American Revolution in 1971.
2. Revenue sharing and the Family Assistance Plan were two of Nixon’s most radical policies.
3. During his time in the presidency however, Nixon focused more on foreign policy than domestic and economic policies.
III. The Welfare Problem
1. Once in office, Nixon came under pressure from the Republican governors of New York, Pennsylvania, Illinois, and Michigan, among others, to take some action against the rapidly growing costs of welfare, particularly the aid for families with the Aid to Families with Dependant Children (AFDC) program.
i. A problem was that AFDC benefits varied from state to state, for example from a low in 1968 of average per person monthly benefits of $8.50 in Mississippi to a high of $71-75 in New York. As a result, higher welfare rates acted like a magnet to attract poor families.
2. In a televised address on August 8 1969, Nixon presented a welfare plan entitled the Family Assistance Plan (FAP). The plan combined the ideas of “negative income tax” by economist Milton Freidman, job incentive disregard and work requirements. The FAP created much controversy between liberals and conservatives in the government and ultimately did not pass.
i. "Negative income tax" was direct payment of cash to people whose incomes were too small to make them liable for the federal income tax. It included two conditions: first, all other forms of welfare, such as subsidized housing and school lunches, must be terminated; and second, the marginal tax rate on welfare must be kept low so that loss of welfare would not discourage welfare recipients from seeking regular jobs.
ii. George Shultz suggested disregarding 20 earned each week when figuring the reduction of welfare benefits for an employed person. In other words, if a worker receiving family security payments found a job paying $60 a week, he would lose only $20 in benefits so as not to dissuade him from seeking regular employment.
iii. Arthur Burns also proposed an expanded job-training program and a requirement that able-bodied adult welfare recipients accept either work or job training. This ensured that the welfare was not “guaranteed income”.
iv. Numbers for the FAP were set to $1,600 annual allowances for a family of four while making welfare recipients ineligible for food stamps. Estimated total costs were at $5 billion.
v. In April 1970 a version of FAP supported by the Nixon Administration passed the House but failed to get by the conservative Senate Finance Committee in that session. In the next session a very similar version of FAP (the Stevenson amendment) failed to gain Administration support and failed to pass the Senate.
IV. Revenue Sharing
1. Nixon announced a general revenue sharing program (GRS) on October 20 1972 as the State and Local Fiscal Assistance Act of 1972. This was one of his major domestic reforms under his New Federalism policy. Revenue sharing is a program originated by economist Walter Heller, of federal transfers of revenue to state and local government that does not impose specific or categorical spending requirements on the recipient government.
i. The purposes of revenue sharing include:
a. Initiation of intergovernmental fiscal reallocation
b. To address state and local government liquidity crises
c. Synchronization of federal and state-local fiscal policy
ii. In the first year $5.3 billion would be distributed, with two-thirds going to local governments and one-third to the states.
iii. In subsequent years the states' share would increase, until by the fifth year the states would receive $3 billion and the local governments $3.5 billion.
iv. GRS was effective from 1972 to 1986. In fifteen years $83 billion dollars were transferred from federal governments to state and local governments.
V. Civil Rights: Desegregation of schools
1. Nixon announced a program to desegregate schools in the South in 1970. Peaceful desegregation of the South, however reluctantly undertaken, proved remarkably successful.
i. In the fall of 1970, school districts throughout the South desegregated in compliance with the Supreme Court's Green decision, without serious upheaval or resistance. Within four years the percentage of black children attending totally black schools in the South, 68% in 1968, had fallen to 8%.
2. Desegregation of schools in urban areas however gave rise to the issue of bussing.
VI. Civil Rights: Bussing
1. By 1968--fourteen years after the first decision on Brown--68 percent of black children in the South were still going to all-black schools, and 82 percent were going to schools at least 95 percent black.
i. A federal district court in the case Briggs v. Elliot in 1955 found "The Constitution . . . does not require integration. It merely forbids discrimination."
ii. In 1961, however, another district court ruled in the case Taylor v. Board of Education that the school authorities of New Rochelle, New York, were required to transport some students to schools outside their own areas in order to achieve racially mixed student bodies, even though New Rochelle schools had never been segregated by law.
iii. In May 1968 the Supreme Court ruled in the case Green v. Board of Education that freedom-of-choice plans failing to produce "a unitary system in which racial discrimination would be eliminated root and branch" would no longer be tolerated
iv. On April 20, 1971, the Supreme Court held unanimously in the case of Swann v. Charlotte-Mecklenburg Board of Education, dealing with the school district of Charlotte, North Carolina, that bussing under some circumstances was an appropriate means for rooting out the effects of prior segregation.
2. If the apparent difference between the interpretation offered by Briggs and that offered by Taylor were resolved in favour of Taylor, virtually every heavily urbanized school district in the United States would be required to transport large numbers of children of both races to schools outside their normal attendance areas. Out of the fear and resentment created by this possibility, the bussing controversy was born.
i. Proponents of bussing argued that bussing had long been an established adjunct of American education, and in fact had been used extensively to maintain segregation in the South in areas where housing was not segregated. The opponents' main complaint, as most of them forthrightly indicated, was that some children were to be carried out of their own areas to schools perceived as educationally inferior, in uncongenial and potentially dangerous neighbourhoods.
3. In the winter of 1972, Nixon, observing Congress's apparent inability to take effective action against bussing decided to enter the conflict with some anti-bussing proposals of his own.
i. Nixon proposed two strong statutory measures against bussing: a "moratorium" on court-ordered bussing until July 1, 1973, or until Congress passed new guidelines for bussing, whichever was sooner; and an "equal educational opportunity" bill, which would strictly limit bussing, while providing increased federal financial support for schools primarily serving poor children.
4. When the bill was taken up by the Senate in October 1972, a few weeks before the 1972 election, liberals prevented the passage of the bill through the use of a filibuster.
i. In a statement issued in October 1972, Nixon called attention to the language in the Civil Rights Act of 1964 prohibiting "bussing to achieve racial balance in the schools."
5. In 1976 President Ford asked Congress for legislation to limit bussing to districts with proved histories of practices leading to segregation. Bussing remained a debated issue however.
VII. Civil Rights: The Philadelphia Plan
1. The Philadelphia Plan was a local construction industry initiative of senior Philadelphia officials that was declared illegal in 1968. It led to the Revised Philadelphia Plan of 1969. It required construction unions to accept quotas of black apprentices for work on federal contracts and was to help remove employment discrimination by executive orders.
VIII. Civil Rights: Women’s Rights
1. Nixon endorsed the Equal Rights Amendment in 1972, which guaranteed equal rights under any federal, state, or local law could not be denied on account of sex. It was to go on to receive ratification to become a Constitutional amendment, but failed to be passed before its deadline in 1982.
2. Despite the opposition of many men in his administration, Nixon increased the number of female appointments to administration positions.
3. Title IX of the Education Amendments of 1972 prohibited sex discrimination under any educational program of federal financial assistance for education.
4. The Equal Employment Opportunity Act of 1972 made discrimination in employment illegal, notably discrimination based on race or sex.
5. The landmark court decision by the Supreme Court was made in the 1972 Roe v. Wade ruling, legalizing abortion.
IX. Economy
1. Inflation was 4.7 percent in 1968, more than twice the average annual rate of inflation from 1956 through 1967. Unemployment at the end of the year had fallen to 3.3 percent, its lowest level since 1953. Also because of the 1970 recession and the refusal of Congress to hold down the level of spending, the budget for fiscal 1971 was headed toward the second highest deficit since the end of the Second World War.
i. The deficit for the fiscal year ending in June 1971 was $23 billion, far more than in any postwar year except 1968, when the deficit, reflecting the costs of the Vietnam War and the Great Society programs, had reached $25 billion.
2. On August 15, 1971 Nixon presented his "New Economic Policy" to the public over television and radio. The president described each of the steps he was sending to Congress
i. a ninety-day freeze on wages and prices
ii. suspension of convertibility of the dollar into gold
iii. a 10 percent surcharge on all imports
iv. a $4.7 billion cut in federal spending (requiring postponement of the administration's requests for welfare reform and revenue sharing)
v. a 10 percent tax credit to business for investment in new equipment
vi. repeal of the 7 percent excise tax on automobiles
vii. and acceleration of the increase in the personal income tax exemption from January 1973 to January 1972.
3. Immediate public was immensely favourable. The wage-price freeze, as Herbert Stein later said, "was the most popular economic move made by a president since Roosevelt closed the banks."
4. The 1973 budget, presented at the beginning of 1972, projected outlays of $246 billion and a deficit of $25.5 billion During calendar 1972 federal spending rose 10.7 percent.
i. Orders spread through the departments to accelerate purchase plans. Melvin Laird recalled: "Every effort was made to create an economic boom for the 1972 election. The Defense Department, for example, bought a two-year supply of toilet paper.
X. Environment
1. The Nixon era established the basis of American policy on the environment. By 1973 Nixon could point to the passage of major legislative proposals including: air quality legislation, strengthened water quality legislation, pesticide control legislation, new authorities to control noise and ocean dumping and legislation establishing major national recreation areas at New York City and San Francisco as well as regulations to prevent oil and other spills in ports and waterways.
2. The National Environmental Policy Act of 1969 (NEPA) established US policy on the environment. It would declare national policies and goals and establish programs to enforce them.
3. Under Nixon in 1970, the Department of Natural Resources and the Environmental Protection Agency (EPA) were established.
i. The EPA was an independent body concerned with pollution abatement and with jurisdiction over all monitoring, research, standard-setting, and enforcement. The EPA eliminated much of the redundancy and overlap characteristic of the nation's pollution-fighting bureaucracy and proved to be a strong regulatory force on behalf of the environment.
4. The Clean Air Act of 1970 required the EPA to develop and enforce regulations to protect the general public from hazardous airborne contaminants.
5. The first Earth Day on April 22, 1970 drew an estimated twenty million participants and involving over ten thousand schools and two thousand colleges and universities.
XI. Watergate
1. The Watergate scandal was a political scandal that led to the resignation of Richard Nixon, President of the United States, on August 9, 1974. It also resulted in the indictment and conviction of several Nixon administration officials.
2. The scandal began with the arrest of five men for breaking and entering into the Democratic National Committee headquarters at the Watergate complex on June 17, 1972. The subsequent investigation by the FBI connected the men to the 1972 Committee to Re-elect the President.
3. Nixon’s staff attempted to cover up the break - ins. It was revealed that President Nixon had a tape recording system in his offices and that he had recorded many conversations. Recordings from these tapes implied that the president had attempted to cover up the break-in as well.
Conservatives in an Age of Change: The Nixon and Ford Administrations
Book by James Reichley; Brookings Institution, 1981
Nixon and the Environment
Book by J. Brooks Flippen; University of New Mexico Press, 2000
Johnson's War/Johnson's Great Society: The Guns and Butter Trap
Book by Jeffrey W. Helsing; Praeger Publishers, 2000. 279 pgs.
The Progressive Presidents: Roosevelt, Wilson, Roosevelt, Johnson
Book by John Morton Blum; Norton, 1980. 221 pgs
Johnson's War/Johnson's Great Society: The Guns and Butter Trap
Book by Jeffrey W. Helsing; Praeger Publishers, 2000. 279 pgs.
By trying to have both guns and butter, Johnson was unsuccessful in both his foreign and domestic policy.
“By the end of his term, over half a million American soldiers were in Vietnam, while at home there were cuts in the Great Society programs, tax increases, and inflation.”
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