"We're Taking Control"

The hero of Camp David keeps pushing Congress

It was Jimmy Carter's 54th birthday, and the mood of celebration was upon him. Even before the birthday itself, some 1,000 of the Democratic Party faithful paid $1,000 a plate to join the President in the crowded Washington Hilton ballroom. Leaning forward to admire his multitiered birthday cake, Carter accidentally shoved a hand into the pastry, but nothing could faze him. He simply waved a dripping hand to his admirers. Carter called the affair "the most successful presidential Democratic fund raiser in the history of the U.S.," and he assured the gathering: "We're taking control. Our nation is proud again." The guests roared their agreement.

During the celebration, Carter remarked that the best birthday present he could receive would be passage of the energy bill, and last week he came a big step closer to getting his wish. With votes to spare, the Senate approved, 57 to 42, a compromise on the pricing of natural gas. That had become the centerpiece of what remained of Carter's energy package, and the President happily applauded its passage. It proved, he said, that the U.S. "can courageously deal with an issue that tests our national will and ability."

Actually the Administration got its way partly because of one of the most strenuous lobbying campaigns since the passage of the Panama Canal treaties. "A Herculean lobbying effort," grumbled Democratic Senator Howard Metzenbaum, an opponent of the bill. "The Administration pressured every group to get them to pressure members of the Senate. They lined up the Business Roundtable and General Motors. They made it a patriotic issue to vote for this bill. The Administration put anything on the table to get votes. They really turned out the troops. How could any of us combat that kind of power?"

At 8:30 every morning, the White House lobbying teams met in the East Wing office of Carter's congressional liaison aide, Frank Moore. There they plotted strategy for the day and then fanned out to appeal to anyone who could help: business executives, newsmen, friends of Senators. The pitch was always the same: America needs the energy bill to stop the decline of the dollar and convince foreign nations that the U.S. can put its own house in order.

The President joined the lobbying effort with his disarming soft sell. One of his targets was Nebraska's Democratic Senator Ed Zorinsky, who was recuperating from a double hernia operation. Carter phoned him last month to wish him a speedy recovery, then added as though it were an afterthought: "Keep your mind open on the energy bill." Zorinsky finally voted no.

But the President got able assistance from his Senate allies, especially Majority Leader Robert Byrd and Senators Henry Jackson and Alan Cranston. They labored skillfully to keep wobbling votes in line. The final tally was a bewildering blend of liberals and conservatives from both parties. The opposition, similarly, contained such strange political bedfellows as Ted Kennedy and Barry Goldwater, George McGovern and Robert Dole. Byrd eventually won approval of the bill by not exaggerating its importance. The compromise was better than nothing, he told the Senate, and it was now or never. The U.S. had to demonstrate to the world that it could produce some kind of energy program, said Byrd time and time again. The Senators were "convinced the gun was to their heads," said Jackson. "There was no alternative. We just hammered that theme over and over."

If the bill is approved by the House, where another rugged battle is expected, it will only partly relieve the nation's energy problems. Despite Carter's cries of triumph, the bill is far different from what he originally proposed. The legislation he put forward last year in response to his own declaration of a "moral equivalent of war" actually called for the continued regulation of gas prices, whereas the final version is a complex formula for gradual deregulation by 1985. Even its supporters gave it a grade of C minus; opponents flunk it outright.

Producers are pleased that the measure eventually removes price controls from so-called new gas--about 50% of the total supply. Until 1985, however, the bill imposes price ceilings on intrastate gas for the first time and establishes a complex multitiered price system for new gas, depending on how far new wells are drilled from existing wells containing "old" gas. An additional 300 bureaucrats will be needed temporarily to administer this revised price structure; the cost of the effort has been estimated to total $9.6 million. "The bill has been called an administrative nightmare," says John E. Swearingen, chairman of Standard Oil of Indiana. "Instead it is a regulatory disaster."

Estimates vary wildly on what the bill will eventually accomplish. The Senate Energy Committee figures that the cost of gas to consumers will increase about 10% a year. Consumer groups that fought the bill claim there will be a 353% jump in prices between 1977 and 1985. The Department of Energy expects an annual increase in gas production of 2 trillion cu. ft.; the congressional budget office estimates an additional .7 to .8 trillion cu.ft. a year; consumer groups that favored the bill say no increase at all will occur. Both the Senate Energy Committee and DOE predict that by 1985 greater production of natural gas will save the nation 1.4 million bbl. a day in imported oil. Consumer groups deny there will be any such saving. Much depends, of course, on how innumerable lawyers interpret a bill that even they have trouble understanding. But at least, after 18 months, the Senate finally voted on a national plan to conserve energy.

In the President's new Camp David state of confidence, he was emboldened to strike out more vigorously against the No. 1 domestic issue, inflation. He told a press conference last Thursday that "the time for wasteful spending is over" and pledged to cut as much as possible from the fiscal 1980 federal budget, which will be introduced in January. Especially vulnerable are some of the programs Carter has pushed to combat unemployment. One example: the Comprehensive Employment and Training Act, which will cost $11.3 billion in fiscal 1979, will probably be trimmed, partly because it has fallen short of its goal of finding jobs for the hard-core unemployed.

As part of his anti-inflation campaign, the President threatened to veto two major bills: the tax and the public works measures. Both may soon involve him in major conflicts. Taxes. With his impeccable sense of timing, Senate Finance Committee Chairman Russell Long finally released his committee's version of the tax bill. Since Congress is trying to adjourn by October 14, Senators had little time to digest the fine print in the complicated act, and Long would just as soon they did not. As he once told a Senator fretting over the meaning of a provision in a tax bill: "If we waited for you to understand this bill, it would never be passed."

Long's version of the bill cuts taxes generously, particularly the capital gains tax. While the House trimmed the top capital gains tax from 49% to 35%, the Senate committee cut it to 25%. Treasury Secretary Michael Blumenthal warned Long to reduce the capital gains tax cut to avoid a veto, but the Senator paid no heed. The Senate followed the House in reducing the corporate income tax rate from 48% to 46% and in raising the personal exemption from $750 to $1,000. Altogether, the House voted a $16.3 billion tax reduction; the Senate bill upped the figure to $23 billion.

Opponents of Long's measure were hastily trying over last weekend to make some basic changes. Ted Kennedy, for one, was seeking allies to keep the personal exemption at $750, a step that he figures will save $12 billion a year in federal revenues. That amount would then be redistributed to middle-and low-income taxpayers. The full Senate is expected to vote on the bill this week, and the House will have its turn next week. Despite his threats, Carter is not expected to veto the measure if some acceptable compromises are made. The public is calling for a tax cut, and both Democrats and Republicans are eager to respond. Public Works. In greater danger of a presidential veto is the $10.2 billion public works appropriation, including the much publicized water projects. The bill was overwhelmingly approved by the Senate last week--86 to 9--and earlier by the House. The clash over this measure could make the Camp David era of good feelings a distant memory. Members of Congress want their dams approved before Election Day, and some of them have sent word to the White House that they might abandon the celebrated gas compromise if the President persists in his opposition. But Carter says he will not back down whatever the political cost. "If we continue the age-old policy of pork-barrel allocations in the public works bill," he said at his press conference, the Administration would be setting a "horrible example" for the rest of the nation in the effort to control inflation. If Congress overrides his veto--a distinct possibility --Carter can still claim that he did his best to cut wasteful federal spending.

Taking advantage of the Camp David momentum, Carter is not only fighting for unfinished bills that have been placed before Congress but is even reviving legislation that his opponents thought they had killed. He and Health, Education and Welfare Secretary Joe Califano decided to resuscitate the hospital cost containment bill, which was suppressed in committee last summer by pressure from the medical lobby. Carter probably figures he has nothing to lose politically since the public is angry about inflation in general and about soaring medical costs in particular. In August, hospital costs rose .9%, second only to the 1.1% leap in gasoline prices. Carter originally asked for a 9% ceiling on annual hospital cost increases. Compromise bills have now been proposed, but all of them face an uphill fight. Complains a congressional insider: "The White House guys came out of Camp David and think they can work miracles. They've upped the ante on everything. These are very naive people."

Camp David clearly improved Carter's standing with Congress and the public. "My reputation as a capable leader was enhanced," he said, quite deadpan, at his press conference. But the spirit of Camp David will not linger indefinitely, and Carter will have to prove his leadership many times over in the battles that lie ahead with Congress.

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