Americans speak of Washington, D.C., as if it were a foreign country, managed by satraps, totally unresponsive to the wishes of ordinary people. For example, take the general rage against inflation. The cause, we say, is "all that government spending."
Inarguably, Congress is inflationprone.The National Association of Business Economists recently evaluated the 387 non-appropriations bills passed last year and found 140 of them moderately or significantly inflationary; 219 had no effect on prices one way or the other; only 28 could be said to run against the prevailing inflationary trend.
Inflationary bills, however, don't spring preprinted from the muddled mind of a spending junkie. One or another representative American group makes a trip to Washington to demand help.
George McKinney, senior vice president of Irving Trust Co. and chairman of the NABE panel, says that only eight of the bills they studied were "significantly" inflationary. "What disturbs me most," he said, "is the many bills with minor inflationary effects, the nickel-and-dime bills, which taken together add a lot to prices."
The NABE sees its survey as a political tool. Those fighting for office can use the NABE's list to denounce incumbents with inflationary records. (Political groups can get the list of bills from the NABE, 283349 Chagrin Blvd., Suite 201, Cleveland, Ohio 44122.) For incumbents with good records, the list is a vigorous defense. The NABE plans another inflation survey of all the bills passed in 1979.
The eight big inflation bills of '78, and those of you who profited from them, are:
The Emergency Farm Bill, which raised target prices paid to farmers who take their land out of production. This not only adds to taxpayer-financed farm subsidies but, by encouraging smaller crops, raises food prices to consumers. A second farm bill expanded subsidized, low-interest loans to farmers.
The Humphrey-Hawkins Full Employment Act, setting 4 percent as the unemployment goal for 1983. On paper that's only a target; in practice it helps justify inflationary legislation to create jobs.
Last year's tax cut, "signed," McKinney says, "the same week that the president announced an anti-inflation program and wage-price guidelines." In an inflationary climate, personal tax cuts add instantly to purchasing power, which raises prices even more.
A $4 billion military construction bill, otherwise known as pork. The chairman of the Bank of American once remarked that, "There is nothing that will get such sustained, enthusiastic applause from an audience of business or labor as a diatribe against government spending, except the announcement of a huge new government contract awarded to the immediate community." Another spending bill authorized $54 billion in highway and mass-transit aid.
A bill limiting competition from Soviet-controlled ships. It raises shipping costs.
A bill increasing veterans' pensions, including the right of healthy low-income veterans to receive "disability" pay at 65.
The NABE, incidentally, made no judgment as to the merits of these bills. They voted only on the bills' propensity to increase inflation. The panel included both liberal and conservative econmists, Democrats and Republicans. According to McKinney, their votes were, in most cases, very much alike.
The panel found only one bill to be significantly deflationary -- the one deregulating airlines.