With or Without?

Many U.S. labor leaders have contented themselves with shouting their criticism from across the political chasm that separates them from the Republican Administration. Not so the C.I.O. Steelworkers' President David J. McDonald, a Democrat who has been a frequent White House visitor since Jan. 20. 1953. Last week Dave McDonald again dropped in on President Eisenhower, who likes him and respects his judgment. What McDonald had to say about the nation's economy left the President visibly impressed.

Of the Steelworkers' 1,200,000 members, said McDonald, 189,000 are unemployed and 257,000 are working only part-time. The total, 446,000, represents some 40% of the union's membership. McDonald urged the President to adopt an emergency program which would stimulate the economy by increasing benefits for unemployment and social security, providing a $200 raise in personal income-tax exemptions, expanding the federal public works program, and boosting home construction and slum clearance work.

A Responsive Audience. Ike did not entirely agree with McDonald; the President is dead set against the tax-exemption increase. Parts of the McDonald plan, e.g., his proposals for unemployment and social security benefits, home construction and slum clearance, are already pending in Congress with the Administration's hearty blessing.

But McDonald's plea for a step-up in public works found a responsive audience --especially since the President's economic advisers have recently advanced the same idea. Ike was not prepared to go as far as McDonald, who wanted public works projects increased by a whopping $5 billion a year. The President's advisers have told him that state and local governments could--and should--spend 50% more on public works (last year they spent $7 billion), and any major increase in such state and local effort would call for more federal participation. President Eisenhower may urge these views on the state governors when they meet with him April 26-28 for a general review of national policy.

"Almost Certainly." Also in the economic offing is another loosening of bank credit, probably by 1) a Federal Reserve Board order cutting bank reserve requirements and 2) liberalized Government terms for housing, small business, farm and other loans.

By no means all economic experts agree with the Administration as to the best methods of halting recession--or with Dave McDonald as to the seriousness of the situation. Writing in this week's New York Times Magazine, for example, Harvard Economist Sumner Slichter recommends complete elimination of all the recently reduced excise taxes as the measure which would "almost certainly be sufficient to halt promptly the contraction of business." Reviewing such indexes as consumer buying, production, inventory adjustment, individual savings and housing starts, Slichter concludes that the recession is nearing an end with or without more Government aid. Says he: "My analysis indicates that a business revival should come without any additional assistance from the Government in about three to five months, or even less, and that the drop in production in the meantime will not be severe."

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