Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-11-08
Fight ON BUDGET
Viewed ASCERTAIN
Democratic Cabinet Prepares
Estimates to Be Approved
by G. o. p. Congress
TAX RISE IS FORECAST
BY the Associated Press

Washington. Nov. =. - Estimates
upon which Congress will make appro-
priations for the first fiscal year of the
new Republican administration are now
being prepared by the various govern
ment departments under the direction
OF Democratic cabinet officers and In
accord with the policies Of the Wilson
administration.
The estimates will be submitted to
y Congress at the opening Of the next
session on December q. Since the Re-
pubiicons have a majority in both the
senate and House, sharp changes are
expected to be made in most of the esti-
mates under revision plans which Re
publican congressional leaders are ex-
pected to work out in co operation with
other leaders of the Harding admins
ration. which takes Office on March 4.
The present political situation with
regard to the annual appropriations is
similar to that which obtained eight
years ago after tho first election of
woodrow Wilson, but the economic
situation in the country was vastly
duerent. AT that time the Republicans
were In control Of the executive
branches of the government under
President Taft, but the Democrats had
majority in both the Senate and
House
At that time. however. conditions in
the nation and the world generally were
normal ami government expenditures
were only fourth of what they are at
this time.
May Cut Navy Program
The Forthcoming estimates for the
War Department will be based upon the
TH0tl1rnmantC n .,,, II
which already has been fixed by the
hepublican Congress. but the naval
estimates to be submitted next month
will be based on the Democratic pro-
gram. Secretary Daniels had repeatedly
said that unless the United States be-
came a member of the League of Nations
i must maintain the most powerful
navy in the world
Under the program authorized in 1915
the government now is constructing five
\ great battle cruisers and more than that
number of surprdreadnoughts and tho
Forthcoming naval estimate is expected
not only to include appropriations for
carrying on this work. hut also recon
mendations for additional warcraft.
Estimates for all of the government
departments are expected 10 exceed 81, e
OOO,WO.O0O, this total including
amounts for rrfunding portions of the
public debt falling due during the next
hscal year. The estimates for the
present fiscal year exceeded SO, 900. =
100000, but these subsequently were
reduced by something like $4,000,
Whether all annual supply measures
will be completed at the next and final
session of the Sixty sixth Congress re =
mains to be determined. President
elect Harding is expected to call a
special session of the new Congress soon
after he takes office on March !. and
II may be that some of the appropria =
tion bills will go over TO the special
session.
The nation will face n, continuation
OF the annual tax bill of 81. 600 900.
600 for period of at least three years
IL Congress adopts recommendations
drafted by treasury officials and which
Il was understood last night. have beer
laid before Secretary Houston, for ap-
proval.
Mr.. Houston. II was stated. probably
will include such recommendations II
the form Of an ANALYSIS OF the govern
ment's financial condition in his forth
coming annual report to Congress. Th'
analysis will show. and accompanying
recommendations will suggest. it was
said. that a three year problem for tn!
revision is required in order TO NEE
maturing government obligations an
cover current federal expenses.
Approximately sS. 900. 900. 900 in Vic
tory notes. war sayings securities anf
TREASURY certificates Cf Indebtedness viii
be due for payment within the next thre
years. treasury figures show. Retention
Of the present aggregate level of taxes
or maintenance of the annual revenue o
the government ut about four billion
dollars then is held 10 be unavoidable o
the face of average expenditures esti
mated for the period.
Graduated Income Tax
Recommendations to be made by Mr.
Houston, it Is understood. will nro1os
-. .abolishment of the excesT profit taxes ii
their entirety and the substitution
therefor ~ a graduated income tax OF
substantially deeper cut than unde
present revenue laws. 1t was believed
the new income taxes would apply onl
to incomes above $4,000 annually. an
that provision would be- made for
graduated increase even on the add
tional tax as the amount of incom
grows larger.
The secretary Is expected to advis
Congress that tho Strictest economy i
federal appropriations is necessary If tn
program outlined on the basis Of
"a 600 ,OOO. 900 tax hill is to be accom-
plishcd. He has said there was no wa
TO estimate with any degree OF accuracy
what even the present laws would yicl
in revenue because Of the rapidly chang
ing conditions in business as result c
after the war transition and rcadjust
ment. Mr.. Houstons view was said
be that tax receipts would be material!
lower later in the present fiscal yenl
which ends June 80. 1927, and there
fore, the government income under tn
prescnt revenue laws could not b
taken as basis for calculating futur
receipts.