Evening star., 1938-01-06
The Budget.

Again the country is faced with q
billion dollar deficit-and perhaps more
at the close of the new fiscal year, which
begins July next and ends June 30,
1899. The Government has been in the
red" so long, the budget has been out
OF balance for so many years that the
country has almost become callous.
At the close Of business on June 80,
1899. the gross public debt will have
reached the stupendous figure of $38,528,-
200,000-unless it has gone higher-ac-
cording to the estimates submitted to
Congress by the President. What is to
be the outcome?
President Roosevelt regards as of very
great Importance the fact that the esti-
mated expenditures for the next fiscal
year are s539 100000 below those for
the present fiscal year which ends June
80. Surely this is step in the right
direction, and the country will agree
with the President that this is salutary
thing.
The difficulty about the budget sent
to the Capitol yesterday by the President
is found in the fact that it may be
changed overnight, as admitted by the
President himself. He intends to ask
for greater appropriations for relief If
conditions become worse and there is
greater unemployment. Furthermore it
is expected that the President will send
another message, dealing with national
defense and the need of materially ex-
panding the Navy. So this budget must
be regarded as flexible matter, with
the estimates of expenditures already
expected to exceed what the President
has recommended. Whether there is any
Chance for an increase in the estimated
revenues is another matter.
If the present business recession is
halted, If production and employment
move up, the chances for more revenue
are good. But even so, the revenues
may not move much beyond the point
estimated by the President in his mes
sage. There is the chance that more taxes
will be levied, and so more revenue may
be obtained. But this chance is remote
particularly in view of the already heavy
tax burden and the fact that a con-
gressional election is just around the
corner.
The President has indicated that the
Government may not be forced to new
borrowing to take care Of the increase
in the public debt, due to the deficits
growing out of the present fiscal year,
and even of the next fiscal year. It is
planned to make use of the revenue OBJ
tained from the taxes under the social
security law, for old age pensions and
unemployment pensions, to purchase
Government securities that must be
issued to meet these increases Such
financing will meet with disapproval, and
already members of Congress have de-
clared that these funds should be segre-
gated and not used to meet the general
expenses OF government.
The business recession of the past six
months has been the cause, the Prest-
dent says, of the failure to achieve a
balanced budget in the fiscal year 1889.
He is probably entirely correct. The
business recession, on the other hand,
is due in considerable part to the pur-
chase of huge supplies early In 1887 by
many industries and businesses, because
of the fear that prices would be forced
higher. The country was then suffering
an epidemic of sit-down strikes. De-
mands for increases in wages of labor
were countrywide. The prospect of in
creased costs of production-and of in
creased prices-was imminent.
Administration spokesmen have charged
that the recession was due to q strike
OF capital, to increases in prices by
"monopolies," and to other bad practices
by minority of business men. Now,
however, the President is suggesting that
the way to relief is collective action on
the part of industries-which means if
anything a tendency toward monopoly.
The country is still at loss to under
stand what the administration wants
or intends to do. It does know, however,
that the end Of deficits, Of Government
expenditures in excess of Government
receipts, Is not yet in sight.