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Nixon's praise of decentralization is also intended to make a virtue out of what he considers a necessity. Given his Administration's continued commitment to high defense spending and opposition to higher taxes, there is no money available for new or expanded social services. Nixon, the advocate of fiscal prudence, has in fact run up the largest federal deficit of any President since F.D.R., who was fighting both a depression and a world war. Although the fault is not entirely Nixon's, he heads into his second term confined by a fiscal squeeze that will sharply delimit domestic policy. So far he has issued no major requests for new initiatives from his departments to improve on his disappointing first-term domestic record. Indeed, only one instruction has gone out: prepare to tighten your belts.
More specifically, TIME correspondents report the following prospects in areas of pressing domestic concern:
THE ECONOMY. Nixon won many votes by his promise not to raise taxes in his second term, which he hedged later by placing the blame for any forthcoming hike on high spending by a Democratic Congress. Yet most economists see no way to avoid tax increases. If more government services are shifted to state and local governments, they too will be forced to raise taxes ,which would go against another Nixon campaign pitch, the pledge to try to relieve local property taxes. Trying to hold down the current federal budget under $250 billion, Nixon is expected to operate the national economy at less than its full capacity, thus countering inflation at the risk of higher unemployment. This might enable him to lift wage and price controls, but he is not likely to do so until after the period of heavy labor bargaining next year, when many major contracts expire.
DEFENSE. In the face of McGovern's attack on Nixon's defense budget, the President's Pentagon outlays have become almost sacrosanct. Despite the presumably imminent end of the Viet Nam War and the SALT I agreements on limiting new nuclear weapons, the defense budget will rise rather than decline. It will reach at least $76.5 billion in fiscal 1973, an increase of $1.3 billion in expenditures over last year.
This is partly because of higher military pay, needed to give another vote-pulling Nixon campaign promise some hope of fulfillment: ending the draft by creating an all-volunteer military force. It is also dictated by Nixon's insistence on improving existing nuclear weapons and building such new systems as the Trident submarine and the B-1 bomber.
RACE. Nixon shows little evident interest in America's most serious continuing challenge: race relations. He feels no political obligation to blacks, who again voted overwhelmingly Democratic. While apparently retreating from school integration, Nixon offers no plan to help blacks move into white neighborhoods and thus alter racial housing and school-district patterns. He is expected to appoint more blacks to Government posts, perhaps even the Cabinet, which might make a significant symbolic point but could have little practical effect. While the ghettos have not been burning, racial discontent remains a potentially explosive problem.