Evening star., 1936-01-16
TAX ISSUE AVOIDED
DESPITE PRESSURE
Roosevelt Budget Shot Full
of Holes, but Few Want
New LevieS.
By the Associated Press.

Despite the gaping holes torn in
the Roosevelt budget, there was little
disposition on Capitol Hill today to
provide new taxes at this session un-
less the administration demands
them.
Within 10 days. developments have
arisen that threaten to knock the
Roosevelt fiscal program from $2,-
500 ,o0o,000 to $500, ,0o0, 900 out Of
kilter. The A. A. A. decision by the
Supreme Court left huge gaps in the
revenue, and congressional plans for
paying the bonus would add to the
expense. More damage to the Presi-
dents estimates may be forthcoming
later.
But administration leaders remain
noncommittal over the prospect Of
new taxes, or 60 further and forecast
there will be none except to finance q
new farm plan. Opposition forces
are critical, but are not yet demand
ing new taxes.
Farm Program Holds Key.
Determination Of the tax question
depends to q large extent on admins
tration plans for q new farm pro-
gram. It is generally believed by
members OF Congress that this will
involve new taxes, and that they may
to some extent cover up the hole in
the budget created by the Supreme
Courts A. A. A. decision.
Administration chieftains have
taken the position the bonus will not
require new taxes. They have worked
out a system for paying the veterans
which they contend will slow down
the demands on the Treasury.
Other legislators say that regardless
Of that, the bonus bill, If it passes in
its present form, will add more than
$4,000. 900, 900 to the public debt.
Picture Changed in 10 Days.
Here is how the budget situation has
changed in 10 days.
President Roosevelt estimated a
deficit of s3,234, ,ooo, 900 for the cur
rent fiscal year and 81 ,09S, 900, 900 for
next year, which would bring the pub
lie debt TO $3l, 1851, 900 900 by July /.
1887. These figures did not include
any new funds for relief during the
next fiscal year.
A. A. AS death added $500 900, 900
TO this prospective debt-provided no
new taxes are levied to take the place
Of the invalidated processing taxes.
The Supreme Court held that al
most $2oo, ,o0o, 900 in impounded taxes
must be repaid, and left the Govern
ment with no revenue to balance con-
tracts amounting to about $500 ,o0o, 900
already due.
May Be Liable for Billion.
In addition, the courts decision left
the possibility the Government may
have to repay about 81 900, 900 900 Of
processing taxes already collected
The cash bonus bill would eyentu-
ally cost about $2,200,000, 900. Ad-
ministration leaders forecast the de-
mands for cash will amount only to
81 ,000, 10000 during the next fiscal
year. but the balance will be added to
the public debt.
Secretary Morgenthau hinted be-
fore the Senate Finance Committee
that the new relief needs might
amount to $4,000, ,000,oo
$4,000, 100000 Debt Possible.
II all Of these things should ma
terialize 1t would bring the prospective
public debt for July /, 1887. to about
$37, ,o0o, 900 900.
If the Government could get along
without any new relief funds, and
did not have to repay the 81. .0oo. .00o,-
600 Of processing taxes, it would still
be $4,000. .000. 900.
On the other hand, the administra-
ton might re-enact the processing
taxes retroactively. as suggested by
Senator Bankhead, Democrat, of Ala
bama. This would cut the total down
by about 81 zoo, ,00o, 900.