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Patman Splits Doubleheader with LBJ Washington Congressman Wright Patman won a big one. And he lost a big one because of a Lyndon Johnson double-cross. To take up the good news first: The Housing and Urban Development Act of 1966 was being torn apart by pork-barrel amendments. Senator Sparkman of Alabama, who ‘has strangely won the designation of “Southern moderate” ‘simply by being willing to milk the federal government from every available teat, started tacking on the wild-spending amendments in the Senate. By the time the bill came out of the ‘housing subcommittee to Patman’s House Banking Committee, fifty -two pork barrel exemptionsincluding a $10.5 million item for a civic center in San Antonio, proposed by Congressman Henry Gonzalez had been tied ‘to the measure. At this point the bill was in danger of being drained of all life. The cost of the facilities involved in the special exemptions came to an estimated $350 million. The bill was now loaded with civic centers and sports arenas and bridge repairs and community colleges and county jails and fire and police stations. All worthy item’s, no doubt, but they had nothing to do with slum clearance, which is the purpose of the act. Patman wrote Robert C. Weaver, ‘secretary of Housing and Urban Development, sounded the alarm, and asked for help. Weaver responded immediately with a letter denouncing the amendment ‘s ‘in furious terms. He wrote that if the pork barrelling was not blocked, the results would be “devastating.” He predicted that “adoption of these special provisions would use up almost one-half of the $750 million authorized by Congress to be spent for the elimination of slums and blight during fiscal 1967. . . . The funds would be used to pay for cultural centers, civic centers, and huge stadiums – Not to make possible additional housing for low-income people. These special provisions would preempt urban renewal funds to pay for luxury item ‘s of communities which are already benefiting from participating in the urban renewal program.” Patman read the letter to his committee, which was sufficiently ‘shamed to knock the amendments out. The ‘subcommittee tried to renew the ‘amendments, but without success, and at this point it looks like the bill may be safe. It was a great victory for the poor folks. THE BAD NEWS is Patman’s losing effort to take away some of the illegal powers now wielded by the Federal Reserve Board. Although Roosevelt and Truman kept the Fed in line, Eisenhower surrendered to it, and so ‘has Johnson. LBJ ignores his own ‘powers, many believe on the advice of ex-Texan Robert Anderson, who was one of Eisenhower’s Robert Sherrill treasury secretaries and is reputed to be Johnson’s closest economic counselor today. He is seen around the White House with increasing frequency. Thus the enormously powerful Federal Reserve Board has become a fourth arm of the government with uncheckable controls over our economy. It can raise or lower interest rates at whim, make money tighter or looser at whim; it was a direct contributor to three recessions during Eisenhower’s years in office. Even its operating expenses are independent of Congress. Last December William McC. Martin, chairman of the board, decided to teach Johnson a lesson in obedience. Johnson had invited Martin to come down to the ranch to discuss economics. Martin took along a little present the news that the board had just raised allowable interest rates from 4 1/2% to 51/4%. Johnson called a news conference, said he regretted the board’s action, but that there was nothing he could do about it. Washingtonians conditioned by William S. White’s “Johnson the Omnipotent” and by Tom Wicker’s “Ten Foot Tall Johnson” columns ‘appearing in the New York ‘Dimes think the President is a pretty rough fellow. Actually he is quite easy to ‘intimidate, especially by the business COM-Tumidity, and William McC. Martin has intimidated the hell out of him. BUT MARTIN doesn’t intimidate Patman; he infuriates him. So Patman introduced a bill to reduce the allowable interest rates on bank certificates of deposit. Whether or not this would have helped curb the rising rates is not really an important question. Patman’s primary goal was to set the precedent of taking the interest-setting powers away from the Fed. And the bankers knew it. The American Banker, an industry publication, asked each of the 14,000 members of the American Bankers Association to place a phone call or send a telegram to Washington. One per bank was the goal; 14,000 taps on the shoulder is a pretty good lobbying effort. The day before the bill was to go to the floor, Patman met with Johnson in his bedroom in the White House for two hours. Also on hand was Walter Heller, one of Kennedy’s economic advisors; Jake Jacobsen, Price Daniel’s ex-factotum who has now become Johnson’s “expert” in many governmental mysteries including finance, unbelievable as that may seem; Secretary of the Treasury Fowler, Under Secretary of the Treasury Barr, Marvin Watson, who learned his economics under E. B. Germany at Lone Star Steel, and a couple of other lesser lights. Things got pretty rough. Fowler wanted to keep the argument at a personal level of wrangling, demanding to know why Patman had publicly called him “namby pamby” and so on. Just about everyone in the room was against Patnam, but he came away with what he thought was the understanding that Johnson would not oppose his bill. He wouldn’t support it, but he would not oppose it. As the debate waxed hot in the House, word came that Johnson was at that moment holding a press conference announcing that he would ask Congress to temporarily suspend the 7% tax credit to -businessmen and take other very hazy steps to “meet inflation.” Several reporters noted that the announcement came as a surprise, in timing. It was obviously rushed into being to kill Patman’s efforts. From early morning hours, before debate on the floor began, members were being called by the White House and asked to vote for the Patman bill because the President had come up with another package. What had happened was that Johnson had cut Patman’s legs off by giving Democrats who were being pressured by their bankers a chance to say they preferred to fight inflation Johnson’s way rather than Patman’s way in other words, he gave them an excellent party-loyalty excuse to do nothing. Fort Worth Congressman Jim Wright not only stuck with Patman, he worked the floor for him. Henry Gonzalez went with Patman. Most other Texans opted out. So Patman lost, of course. Also lost was the best opportunity that will come along in years to smash the Fed’s supposedly traditional stranglehold on economic affairs. Johnson couldn’t have lobbied the capitol more effectively; it was a flagrant doublecross. But at least Patman won back part of his political soul. He has been sometimes grotesquely loyal to Johnson. At Johnson’s instigation he lobbied the Texas legislature in 1957 for the Pool bill, which was meant to keep Ralph Yarborough out of the Senate. On demand from Sam Rayburn and Johnson, he successfully helped gut the housing bill in the 1959 conference committee. In recent months he helped push through the Sales Participation Act violating all his economic principles because Johnson demanded it. But when he saw Johnson riding with the Fed, Patman couldn’t take that. He fought back. He lost, but he fought, and in doing so his spirit may have gained enough strength to stand again another day. 0 September 30, 1966 15 GARNER & SMITH BOOKSTORE 2116 Guadalupe, Austin, Texas Mail order requests promptly filled