On January 31, 1968, it became clear that the war and its costs were not about to end anytime soon. The Vietcong launched a surprise attack, the Tet Offensive, on the U.S. embassy in Saigon and on other American targets in South Vietnam, and even though U.S. forces were able to turn back the assaults, their intensity showed that Vietnam was a “quagmire” and that promises by Johnson and General William Westmoreland, the commander of U.S. military forces, that victory was in sight had been foolish if not deceitful. Many Americans were shocked when General Westmoreland requested 206,000 more troops on top of the over half a million who were already there. Controversy over the war overwhelmed all other issues.
Senator Eugene McCarthy, the professorial six-foot-four senator from Minnesota who liked to quote the great poets, was the voice of the antiwar movement in Washington. He was not your ordinary politician. Before entering government, McCarthy had studied to be a monk and had taught courses in several Catholic colleges. He had been elected to the House in 1948 and to the Senate ten years later. Although McCarthy had originally supported the war—he voted for the Gulf of Tonkin Resolution—by 1968 he had turned vehemently against it. What distinguished the senator more than anything else from others in his party was his willingness to take a forceful stand against the president on this issue. He called the war “diplomatically indefensible” and “morally wrong.” On November 30, 1967, his challenge to Johnson’s policy became a campaign for the Democratic nomination. Many college students found his campaign compelling and a refreshing alternative to the stalemate that seemed to grip the parties in Washington. These younger Democrats poured into New Hampshire to build support for McCarthy in the first primary of the presidential election season. Johnson did not campaign in New Hampshire, not an unusual strategy in an era when the party leaders still determined who the nominee would be and presidents rarely partook in the few primaries that were held.
Liberal unrest over Vietnam was a powerful factor in the primary, though the younger Democrats who had been politicized by their opposition to the war were also dissatisfied with what they perceived to be the limits of Johnson’s efforts on domestic issues since 1966. McCarthy received 42.2 percent of the vote in New Hampshire, surprisingly close to Johnson’s 49.4 percent. Suddenly the New Hampshire primary was no longer the minor event it had always been; the results in that rural New England backwater made it crystal clear just how low Johnson’s political stock had fallen.
The president seemed very beatable. He had invested all his political capital in legislation he knew would anger core Democratic constituencies—southern conservatives and urban ethnic liberals. He understood clearly that legislative victories did not automatically translate into political strength. In fact, he had moved legislation that was sure to take a toll on his standing. Now he was paying the price. Johnson had also pushed the nation deeper and deeper into the unpopular war in Vietnam, in a misguided effort to appease hawks and protect his congressional coalition from right-wing attacks. The fiscal and political reckoning for these choices had been a long time in the making.
Richard Goodwin, who as a speechwriter for Johnson had coined the term “the Great Society,” was now serving on McCarthy’s campaign. He believed that McCarthy’s strong showing had “unmasked the subterranean discontent with the president and his policies, revealed how intense and widespread was the desire for change, and transformed a Minnesota senator into a national political leader, a hero.”46
Just a few days after the New Hampshire primary, on March 16, Senator Robert Kennedy announced he would be running for the Democratic nomination himself. Like McCarthy, he defined himself by attacking Lyndon Johnson from the left; he promised to do more to fulfill the objectives the president had promised to accomplish on the domestic front and assured supporters he would end the disastrous war in Vietnam. McCarthy’s followers were furious with Kennedy, who they felt had avoided the primaries until their candidate had demonstrated how Johnson could be defeated. Still, RFK’s entrance was exciting to a large number of Democrats who were lukewarm, at best, about President Johnson and nervous that Senator McCarthy would not be able to defeat any of the Republicans who could be nominated. During the press conference to announce his candidacy, Kennedy explained he would “seek new policies—policies to end the bloodshed in Vietnam and in our cities, policies to close the gap that now exists between black and white, between rich and poor, between young and old, in this country and around the rest of the world . . . the reality of recent events in Vietnam has been glossed over with illusions. The report of the Riot Commission has been largely ignored. The crisis in gold, the crisis in our cities, the crisis in our farms and in our ghettos have all been met with too little and too late.”
The gold crisis to which Kennedy referred was greatly increasing pressure on Johnson and Mills to reach a deal on taxes and spending. U.S. policy makers, European bankers, and Wall Street genuinely feared that the international system of finance was in danger of collapse. As more investors outside and inside the United States were coming to believe the dollar would fall in value as a result of the stalemate over fiscal policy, there was a rapid outflow of gold from the United States as investors traded their paper currency for bullion. Speculators took advantage of these fears and made the situation even more acute. This was the kind of crisis that deficit hawks had been warning about for more than a year. In the New Republic, the economics reporter Edwin Dale agreed that the collapse of the finance system “could bring a world-wide depression.”47
For a generation that had lived through the Great Depression in the 1930s, the possibility of a global financial meltdown had an almost palpable effect. “If the monetary crisis was not handled with skill by all concerned,” Johnson later wrote in his memoirs, “it could easily throw the world economy into the kind of vicious cycle that had been so disastrous between 1929 and 1933. We were dealing not simply with money and exchange rates but with trade and jobs and the livelihood of millions of families.”48 “Americans have been hearing warnings for a long time about an impending ‘gold crisis,’” noted the editors of the Los Angeles Times. “That crisis is now upon us, and this country simply has to make some hard decisions if we are to dampen the shock waves which threaten the very foundations of the U.S. economy.”49 The undersecretary of the Treasury, Joseph Barr, recalled, “It was a hair-raising period in which we literally had to watch the gold markets day by day and hour by hour.”50 Richard Nixon described the international crisis as a “vote of no confidence” in Johnson’s fiscal policies.51
On March 13, Vice President Humphrey had warned, “We literally have to frighten people by telling them the sorry facts—the danger to the dollar, the possibility of severe budget cuts, the necessity of financing the war, and the danger of inflation.”52
On a long and tense weekend in the middle of the month, Johnson and a group of international finance officials from Western European governments produced an agreement that temporarily stopped the outflow of gold. When the foreign exchange markets reopened on March 18, one day after the agreement, the exchange of dollars for gold slowed down dramatically.
This was not, however, in the opinion of most policy makers, a long-term solution. The key was to reestablish confidence in the dollar so that international government officials and investors would no longer be interested in trading the currency in for gold. The key in their minds was for the president and Congress to show that they were taking control of the deficit.
The crisis pushed members of both parties closer to a compromise. Senate Republicans announced they would support a tax increase, though less than the 10 percent sought by President Johnson, in order to avert a catastrophic gold crisis.53 Chairman Mills announced that Congress would have to take action through a tax surcharge to stabilize the dollar. Secretary of the Treasury Henry Fowler told Johnson that Mills was “persuaded now of the key relationship of the tax bill, real or psychological, to the international monetary system.”54 Johnson�
�s congressional vote counters were reporting that there was much greater support on the House floor to pass a tax surcharge if an agreement could be reached on spending.
In an effort to get the legislative process moving, Senators George Smathers of Florida and John Williams of Delaware, a well-known zealot for budgetary frugality, decided to circumvent the House, where Mills had shelved the bill in the Ways and Means Committee, and start pushing this bill in the upper chamber. The senators attached an amendment that included the 10 percent surcharge and $6 billion in discretionary spending cuts to excise tax legislation that the House had already passed. Although the amendment did not specify where the spending cuts should be made, most assumed that the president and Congress would fulfill their obligation with domestic programs that benefited the least powerful constituencies and avoid cuts that impacted the military. Indeed, the amendment exempted spending on Vietnam, debt interest payments, veterans’ benefits, and Social Security and Medicare, all of which were considered “pre-committed.” Given that most legislators were scared to cut Pentagon funds or close military bases, this meant that domestic programs would suffer the most. The Smathers and Williams amendment also proposed cutting unspent agency funding from previous years and previously promised increases to various programs.
Johnson worried that by supporting the Senate amendment, he would anger Mills, because the Smathers and Williams amendment had been expressly designed to get around him.55 Mills, however, expressed no opposition to the amendment; he believed it would help him move a package he wanted through the House. Mills was worried that his committee didn’t have the authority to report a tax bill that included spending cuts; spending was properly the province of the Appropriations Committee. He feared that the House would vote for the tax surcharge and not the spending cuts if they were handled separately. But if the Senate combined them through an amendment, he would be able to ensure in conference committee that the entire package survived intact and obtain a rule from the Rules Committee prohibiting any amendments to the bill when it came out of the conference committee and onto the House floor. During their conversation on March 24, Mills told Johnson that Senate passage of an amendment could be useful to him by showing his colleagues in the House that there was strong bipartisan support for combining the two forms of deficit reduction.56
Liberal Democrats in the Senate were under immense pressure to vote against the amendment. Most of the major liberal organizations, including the AFL-CIO, the National School Boards Association, the National Education Association, the National League of Cities, the Catholic Conference, the National Council of Churches, and the Urban League, said that the Smathers and Williams amendment was unacceptable because of the size of the spending cuts. All of these organizations argued that any spending cuts above $2 billion would do irreparable damage to domestic programs. They also took the position that support for the tax surcharge would give implicit support to a continuation of the war in Vietnam and expressed a belief that taking so much money out of the economy would trigger a recession. Johnson responded by telling liberal Democrats that accepting this package was the best way to prevent conservatives from making much steeper cuts that would “murder” his domestic programs.57
In this fraught moment, facing a much more conservative Congress than the one with which he had worked a year earlier, Johnson believed he had no option but to accept the deal. Legislators on both sides of the debate were still expecting Johnson to apply the Treatment to Congress—and get himself out of the bind he was in. When Johnson heard of talk that he could deliver the spending cuts even if liberals were unhappy, because he was still “Master of the Senate,” he said, “I’m not master of a damn thing . . . I’m not master of nothing . . . We cannot make this Congress do one damn thing that I know of.”58
On the matter of spending cuts, Johnson felt he was at the mercy of the Ways and Means Committee chairman. “I don’t believe that I’ve got a bit of influence with him,” Johnson said of Mills. When Secretary of the Treasury Fowler said they might possibly get a better deal on spending cuts if they stood firm with the Senate, Johnson reminded him that the legislation would eventually have to pass through the conference committee, which Wilbur Mills would chair. And if Wilbur Mills didn’t like the deal, Johnson reminded the secretary, “Wilbur Mills cuts your peter off.”59
Privately, Johnson was ready to accept the spending cuts the congressional conservatives were demanding. All he had to do was persuade liberals to support his decision and conservatives to honor the deal.
GOOD-BYE WITHOUT LEAVING
The debate over the tax surcharge was consuming most of the president’s time. He complained to Walter Reuther in March that he didn’t have the energy to hit the campaign trail. “I don’t have much time to make calls like this,” Johnson said. “I am just fighting my heart out by god on the monetary question. I’m doing my best to keep ’em from cutting my budget 20 billion . . . if I let it come to a vote, that’s exactly what the Republicans and the Southerners will do to me while the liberals are cutting at me. I’ve got the problem of Vietnam.”60
In mid-March, Johnson was feeling worn down and pessimistic. Everything seemed to be going wrong. He had “lost” the New Hampshire primary to Eugene McCarthy and was facing, in Robert Kennedy, an even more serious challenger for renomination. His approval ratings were a miserable 36 percent. More than 60 percent of Americans disapproved of how he was handling Vietnam. Antiwar sentiment was sweeping the country. The Tet Offensive had killed any hope the war would end soon. The Left was causing turmoil on college campuses; protesters called the war unjust and immoral. The Right was blasting Johnson for his refusal to use greater force against the enemy. Even the liberal internationalist wing of the party, led by Senator Fulbright, was openly critical of the administration’s policy in Southeast Asia. Johnson’s domestic policies were not faring much better. The Great Society, his signature achievement and the cudgel with which he had battered Goldwater, had become a political weakness. The riots and the black power movement had produced opponents from within the Democratic coalition and awakened conservative critics who had been in hibernation since the 1964 election. The inflationary trends in the economy, now dominating the news as a result of the tax debate, ended the period in which Johnson could boast to voters about impressive economic conditions.
Johnson wasn’t sure he could even win the nomination, let alone the general election. He saw how younger Democrats were drawn to McCarthy and Kennedy. Even if he pulled out a victory, he could foresee a disastrous second term. He saw how he might have a better chance of negotiating an end to the Vietnam War as a lame duck and how an end to the war might revitalize support for his Great Society. Johnson also had serious health concerns; he was physically and emotionally worn down, had suffered from chest pains, a benign polyp, and surgery to remove his gallbladder. He and Lady Bird worried about the physical toll a second term would take on his body.
In the final week of March, Johnson decided not to run for reelection. Johnson had been seriously considering retiring after his term was over since the fall of 1967 when Vietnam was taking a toll on his approval ratings. He had privately contemplated announcing that he would not seek reelection several times before, but he had changed his mind at the last minute. This time was different. He wasn’t going to back down. He planned to announce his decision during a speech from the White House about a temporary bombing halt in Vietnam.
On Sunday, March 31, he attended church services with Lady Bird. He asked the Secret Service to retrieve the text of a speech from his nightstand. After the services, Johnson stopped at the home of Vice President Humphrey, who was about to take a trip overseas, and showed him a draft. Humphrey read through the beginning of the text and affirmed that it was very good. Then Humphrey reached the statement announcing that Johnson would not run for reelection. Humphrey was stunned; he felt on the verge of an anxiety attack.61 Eyes watering, he told the president he could not step
down and said, “There’s no way I can beat the Kennedys.”62
The president went on television at 9:00 p.m. On this day, Gallup had released a poll showing that approval of his policies in Vietnam had reached a new low. The White House circulated the text of the remarks one hour before Johnson went on the air, without including the portion about his decision not to run.
With an air of confidence and resolve Johnson outlined to television viewers a shift in his war policy. There would be a temporary bombing halt if the North Vietnamese agreed to accelerate negotiations. Richard Goodwin was “stunned” as he watched the president; he “seemed not subdued but drained, as if the life force had been dissolved, his face pallid, lined, aged.”63
Then came the bombshell. Johnson said, “With America’s sons in the fields far away, with America’s future under challenge right here at home, with our hopes and the world’s hopes for peace in the balance every day, I do not believe that I should devote an hour or a day of my time to any personal partisan causes or to any duties other than the awesome duties of this office—the presidency of your country. Accordingly, I shall not seek, and I will not accept, the nomination of my party for another term as your president.” As soon as the cameras were off, Johnson smiled at the people standing in the room. Lady Bird, dressed in an elegant red suit with blue trim, dashed over to her husband and gave him a big hug. Their two daughters, Lynda and Luci, who had sat beside their mother as Johnson delivered the historic news to the nation, came over to embrace and kiss their father as well.64 Surrounded by his family, the president stood up and walked away to his private residence.
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