Masonry Magazine January 1976 Page. 15
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POLITICS WILL CALL THE TUNE IN CONGRESS in 1976 on legislation vital to business. Much of what the President proposes or vetoes will be shaped with an eye to the primaries and then (if he wins there) to the campaign. For their part, the Democrats who run Congress will try to help their man. Net, it suggests a year of stalemate, of very little major accomplishment. The lawmakers will focus on voting "must" legislation, like appropriations. No breaking of new ground, just finishing up fast to go home to campaign.
There will be more of the confrontation between Ford and the Congress. The President and the lawmakers are political animals, with political aims. Ford will be trying to build a solid record for the November election. He will fight for adoption of key proposals for which he can claim credit. And the Democratic-controlled Congress will push its own ideas.
This Congress can claim some fairly solid accomplishments during 1975. Laws were enacted to cut Federal income taxes, kill state fair-trade laws, amend the securities laws, give consumers help in billing disputes, create public-service jobs, police home-settlement costs, limit energy prices, and help New York City. It might have voted much more, except for the numerous vetoes of bills opposed by President Ford.
THE ECONOMY WILL GET PRIORITY FROM LAWMAKERS of both parties in 1976. The Democrats will attack Ford and the Republicans for high unemployment for being obsessed with inflation while many millions are still out of work. The President will attack the free-spending of the Democrats in Congress. He'll argue that inflation is still the big threat to long-run prosperity. The Budget will be the major battleground for the tussle over economics.
Congress and Ford will have many fights over spending in fiscal 1977, the government accounting year that will start in nine months, October 1. Even with very jew legislative initiatives, the cost of government will move up. The key question is: How much more in outlay over this fiscal year?
FORD WANTS TO LIMIT SPENDING TO AROUND $395 BILLION in the new Budget he drafted for 1977-$20 billion more than shapes up for the current year. He is proposing major cuts in the outlays of all departments and agencies. Even the Defense Department will feel the effects of Ford's spending cuts. But the deepest reductions are set for social programs, such as health, education, welfare, and many other programs inaugurated by the Democrats. Most of the rise in the Budget will be the result of uncontrollable items like Social Security benefits and debt interest which rise automatically.
But the Democrats will employ their majorities to push some pet bills. They'll want to spend more for national health insurance and welfare programs. And they will back large increases for health and education expenditures as well.
DON'T RULE OUT THE POSSIBILITY OF MORE TAX CUTS some time in 1976. To be sure, Congress only just voted to extend the 1975 cuts through June. But the President could propose new reductions during this election year-if business activity is not expanding rapidly enough to trim unemployment.
THE DEMOCRATS WILL TRY FOR MAJOR TAX-REFORM LEGISLATION during 1976. The full House approved a significant package of reform measures last year, but it was put aside at adjournment, in favor of extension of the tax cuts. The Senate is due to take up the House-passed legislation early this year. The House draft tightens up capital-gains treatment, real-estate shelters, the minimum tax, and tax-exempt financing of pollution-control equipment.
The Senate Finance Committee may make big changes in some provisions of the House bill. Its chairman, Sen. Russell Long, is opposed to some House attacks on key tax breaks.
THE FORD ADMINISTRATION MAY HAVE ITS OWN PLANS for reforming taxes. Its specialists are now studying a simplified, graduated tax on individuals as an alternative to today's system of credits, deductions and exclusions. Individual tax rates would be lowered across the board under their plan. Rates would go to 10% for low-income taxpayers and 40% for higher income. Current rates are 14% at the lower end, up to 70% at the higher-income end.
The Federal government would actually increase its take by $50 billion, if capital gains and other sheltered income is treated as ordinary income and thus subject to a higher tax.
Such basic changes would need at least a year for hearings and Congressional action. But it is unlikely that Congress would begin consideration until after the coming election.
NATIONAL HEALTH INSURANCE WILL GET BACKING from Democrats in 1976. They see passage as a political plus for their nominee for the Presidency. Several versions of the legislation are now pending in the House and Senate. Preliminary hearings were held during (Continued on page 39)