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∙JOHN LEDDY, 47, Assistant Secretary for International Affairs. Bookish, boyish John Leddy has been making or carrying out foreign policy all his working life. He spent four apprentice years as a press-agent for the old Pan-American Union, then went to the State Department as a division assistant for trade agreements. Serving on a variety of State's economic desks, Leddy helped plan for GATT, the Marshall Plan, did spadework for Dillon in shaping the Act of Bogota, the Colombo Plan, the OECD.
With such men at his side, Douglas Dillon has established himself as one of President Kennedy's most efficient Cabinet operators and as a trusted voice in White House conferences on everything from Berlin to school aid. Unlike some other Cabinet officers, says one Washington onlooker, "there is no one between Dillon and Kennedy." He created a smooth working relationship with careful, conservative William McChesney Martin, boss of the Federal Reserve Board. To the surprise of Washington trouble watchers, Dillon did even better with Liberals David Bell, director of the Budget Bureau, and "the Professor," Walter Heller, chairman of the Council of Economic Advisers. Last week, just before he left for Uruguay, Dillon walked out of a presidential conference with his arm around Heller's shoulders, jocularly asked him to "keep the shop while I'm gone." Says Heller: "We're on the same wave length. We may not see eye to eye on all the problems, but we see the broad objectives clearly."
Out of Recession. The first New Frontier objective Dillon faced was guiding the economy out of the recession. He happily went along with such Administration pump-priming gestures as fast payment of G.I. insurance dividends and a defense spending speedup. But he argued strongly against the $1 billion public works program that both Heller and Labor Secretary Arthur Goldberg favored. Dillon won: Kennedy refused to embark on make-work spending.
A major aftermath of the recession was a budget deficit. Counting heavily on tax measures that Congress was unlikely to pass, Dwight Eisenhower had optimistically submitted a balanced budget for fiscal 1961. After his initial review of the estimates last February, Dillon announced that the nation in reality faced a deficit of $1 billion, later raised the figure to $3 billion. Dillon is quite willing to let the deficit ride as high as $6 billion. Last month, during the planning for President Kennedy's televised speech on Berlin (TIME, Aug. 4), he argued against the tax hike that other voices called for on the ground that the economy would recover faster from the recession without a new limitation on spending. But Dillon hopes to bring in a balanced budget next year, when the economy should be both boom-ward bound and ripe for a sweeping tax reform that he hopes to nudge past Congress. "Under an extremely conservative system," he says, "budgets are balanced every year. In others, a permanent balance is not the number-one goal. Our aim is to bring it into balance regularly, depending on the state of the economy."