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1961-1963

John F. Kennedy was president during this time period and we were under Democratic leadership. Kennedy\'s first year in office brought him considerable success in enacting new legislation. Congress passed a major housing bill, a law increasing the minimum wage, and a bill granting federal aid to economically depressed areas of the United States. The most original piece of legislation Kennedy put through Congress was the bill creating the Peace Corps, an agency that trained American volunteers to perform social and humanitarian services overseas. The goal of the Peace Corps was to promote world peace and friendship with developing nations.

However, after his initial success with Congress, Kennedy found it harder and harder to get his programs passed into law. Although the Democrats held a majority in both houses, Southern Democrats joined with conservative Republicans to stop legislation that they did not like. The Medicare bill was defeated, a civil rights bill and a bill to cut taxes were debated. Kennedy wanted economist Robert C. Weaver to be the new secretary but this nomination was poorly received from Southern Congressman and representatives from mostly rural areas because weaver was a black man.

Kennedy did win approval of a bill to lower tariffs allowing more competitive American trade abroad. Congress also authorized the purchase of $100 million in United Nations bonds, and the money made it possible for the international organization to survive financial crisis.

The House Ways and Means Committee put off action on Kennedy\'s revision of the tax laws in 1961. Kennedy sent a message to Congress proposing various tax law reforms, some of them were also requested by former President Eisenhower. These tax adjustments were supposedly the first step to constructive reform. He would then send Congress a comprehensive tax reform program aiming to reverse the trend to preferential treatment of various groups by broadening the tax base and reconsidering the rate structure. To arouse additional spending for plant equipment and equipment by the U.S. industry, Kennedy proposed a tax credit for new investment. Under the proposal if new equipment expenditures exceeded the depreciation allowance, a firm could deduct 15% of the excess, if equipment expenditures were in excess of one half of the depreciation allowance, they could deduct 6% of the excess. As a minimum credit a firm could deduct 10% of the first $5,000 of new investment.

There was much opposition to this proposal in the business community but Kennedy argued its advantages over alternative incentives which were to cut in the corporation tax rate, because it would apply to individuals and partnerships as well as corporations. A credit for all new investment would entail heavy revenue loss from those expenditures which would have been undertaken anyway or represent no new level of effort.

As the U.S. national debt reached the highest fiscal year, 289,211,154,060.05 in fiscal year 1961, congress responded to the President\'s request and increased the national debt ceiling for 1962 from the permanent level of $285 billion to $298 billion.

A bitter minimum wage battle ended in 1961 when Congress passed a landmark legislation both raising the hourly minimum and for the first time since 1938, extending the categories of coverage. Kennedy came out on top with a major victory after an initial set back. Secretary of Labor said that the rate schedule was decided upon after careful study of the impact, the economic situation and the desirability of being certain the minimum rates will not adverely affect employment. Not all the 4.3 million new employees to be covered by the bill would receive wage increases. A number of the newly protected workers who were paid less than $1 per hour would receive $242 million in increases during the first year and that by the fourth year the 1,665,000 workers currently earning less than $1.25 per hour would receive $896 million more. There are some workers who were exempted from minimum wage and overtime provisions of the Federal Labor Standards Act.

Kennedy proposed measures both to alleviate the distress arising from unsatisfactory performance of the economy and to stimulate economic recovery and growth. If economic development in the first quarter of that year indicate that additional measures are needed, he would promptly propose such measures. The potential of the American economy is constantly expanding. The