Evening star., 1961-06-18
ECONOMIC
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Continued From First Page
ment and reasonable price sta
bility.
To achieve these goals, the
commission proposed structural
changes and policy guidelines
that would add up to a moder-
ate expansion of the Federal
Governments role in the
economy.
The Government should work
more vigorously and purpose
fully to level out business
cycles and accelerate iong-term
growth the commission said,
adding that authorities should
coordinate monetary controls,
taxes, spending, loan programs
and other tools.
Tax changes can help level
out business cycle by increasing
purchasing power in recessions
and curtailine purchasing
power when initiation threatens,
the commission said. But, it
continued, Congress takes too
long to act on tax revIsions.
Therefore, the commission
urged, Congress should en-
power the President to decree
reductions or increases of up to
5 percentage points in the first
bracket personal income tax
rate. That is, the 20 per cent
first-bracket rate could be cut
to Is per cent or raised to 25
per cent.
Congress would have so days
to veto the tax change by con-
current resolution of Senate
and House. If Congress did not
act, the revision would remain
in force for six months and
could be renewed for another
six months.
The commission estimated
that full use of 5 percentage
point reduction for one year
would increase purchasing pow
er by SIS billion.
Similar proposals have been
discussed in the past, but have
gotten nowhere. But never be-
fore has such a proposal been
advanced by a group with so
much prestige and so broad a
base.
Spending Flexibility Urged
The commission also pro-
posed study of formula flexi-
bility" for taxes, providing for
automatic increases and reduc-
tionS of rates in response to
specified movements of eco
nomic indexes.
AS a companion to presiden-
tial authority to change taxes,
the commission proposed dis
cretion on timing Federal
spending. For example, the
commission said, Congress
could make advance appropri-
ationS for public works prof.
ectS, letting the President de-
eide when over a period of
several years - expenditure of
the money would help the
economy most.
State and local governments
also could help combat reces-
sions, the commission said, if
they received Federal grants
and loans to spend during busi-
ness downturns.
Because the Federal Gov
ernment's economic tools must
be used to reinforce each other,
the commission said, there is
an urgent need for co-ordi-
nation and unity of purpose"
among all Government agen-
cies-including the indepen-
dent Federal Reserve Board,
which manages the Nations
supply Of money and credit.
Asks More Influence
The commission rejected
proposals for domination of
the Federal Reserve by the
President, but recommended
these organizational changes
that would increase White House
influence:
l. Make the term of the
Federal Reserve chairman CO.
incide with the President S
four-year term, instead of over
tapping. so that a new Presi-
dent could choose a new chair
man from the board.
2. Reduce the term of board
members from IA to 10 years,
and decrease the number of
members from seven to five.
Terms would be arranged to
create at least one vacancy
soon after a new President took
office.
3. Formalize consultation
among Government agencies in
the economic field, including
the Federal Reserve.
Outside the field of organi-