The parade of the tin cups has begun. The recession is now in its 11th month, and the industries most hurt by it are beseeching Congress to rescue them. Now the House has passed legislation to provide the housing industry with a billion dollars this summer in mortgage subsidies. A similar bill offering $5 billion in subsidies over five years is moving along through the Senate under the sponsorship of a conservative Republican, Richard G. Lugar of Indiana. It is a highly bipartisan bail-out. The housing industry is a pillar of the American economy.
There are other pillars. Both houses of Congress are working on bills to aid the savings and loan industry. The question of further aid to the steel and automobile industries keeps recurring. Farm income has been down sharply for the last two years, and a further decline seems likely this year.
The housing bill, like most subsidies of this sort, represents a very expensive way to maintain jobs and profits. Past experience suggests that most of the money will be spent after the worst of the recession has passed, and it won't necessarily be spent in the places where the need is greatest. People in Congress understand those inefficiencies perfectly well. But in a time of distress, most of Congress seems to feel that an inefficient response is better than none.
As the recession continues, the demands for this kind of subsidy are going to get louder and more insistent. As economic policy they are self-defeating, for they add to deficits--and the prospect of continuous large deficits is the principal impediment to a normal recovery. But that thought will not rank very high in the considerations of hard-pressed builders--or S&L shareholders, steel manufacturers or farmers. The votes on the housing subsidies in the Senate Banking Committee last month, and in the House this week, indicate sufficient support in both parties to override a presidential veto. The longer this recession continues, the more tin cups will be thrust at Congress--and the harder Congress will find it to resist them.