JFK Economic Policy

Kennedy's domestic agenda, outlined in his “New Frontier” acceptance speech at the Democratic National Convention in July 1960, faced a difficult passage through Congress. The president was unable to call on the Democratic majority in Congress to support his most progressive legislative reforms, and many Southerners in his own party—several of whom chaired its most powerful committees—were suspicious of Kennedy, his northeast establishment background, and his domestic priorities. Time and again, Kennedy thought he had little choice but to compromise on his legislative program.

Kennedy took office in the depths of the fourth major recession since World War II. Business bankruptcies had reached their highest level since the 1930s, farm incomes had decreased 25 percent since 1951, and 5.5 million Americans were looking for work. To stimulate the economy, Kennedy passed legislation to lower taxes, protect the unemployed, increase the minimum wage, and energize the business and housing sectors. Kennedy believed these measures would launch an economic boom that would last until the late 1960s. His advisers thought it possible to improve the economy through fiscal and monetary adjustments. Kennedy accepted their advice and was impressed with their expertise, which seemed to yield positive results. Partly as a result of the administration's efforts to pump money into domestic and military spending, the recession faded by the end of Kennedy's first year in office. The president also proposed new social programs including federal aid to education, medical care for the elderly, urban mass transit, a Department of Urban Affairs, and regional development in Appalachia.

Lacking deep congressional support, however, Kennedy's programs encountered resistance. He did manage an increase in the minimum wage, but a major medical program for the elderly went nowhere. Attempts to cut taxes and broaden civil rights were watered down on Capitol Hill. Southern Democrats vetoed the proposal for a Department of Urban Affairs because they thought Kennedy would appoint an African American as its first secretary. The education bill foundered on the question of aid to parochial schools; Kennedy, as a Catholic, opposed such aid to maintain his credibility with the electorate. His successor as president, a Protestant, was under no such constraints and would pass a bill providing aid for parochial education. On the positive side of the ledger, the government undertook regional development in Appalachia, an initiative that would have a major impact over the next three decades in reducing poverty in the region.

https://www.thebalance.com/president-john-f-kennedy-s-economic-policies-3305560