Evening star., 1939-01-05


and s90,0O0,Oo0,000.
Estimated Federal Receipts By
Principal Sources, at Certain
Assumed Leuels OF National In
come based on December, 1888,
Tar Rates.
(In billions Of dollars)
R:s! :'sS.' ;as:9s: s:2;: sssr; revenue. s S 8 8
Ss;si%i 81; 81: .si siss.s:; ;.s.. ! ; 5
Total ---------- so so 1o.e
Ts5 AZ, liabilities s1eludnE trust aseounts
The table Is net intended to in
dicate the national income for any
particular year and, of necessity,
the estimates are rough and may
vary somewhat either way. Since
taxes are paid from / month to
16 months after income is realized,
the achievement of a 500, 900 900 900
national income in one year will
not, for instance, mean tax collec-
tons of $4,000 900 900 In that same
year. This table is an indicator
and not gauge.
During the past nine fiscal years
"a period which has seen the ma
nonal income drop from high of
$81, 1,000, 10000 in the calendar year
1929 to around $4,000, 100000 in
1882 and rise again to about $70,-
600, 100000 in 1937-Federal reve-
nues, even though on a higher tax
base, have never completely covered
expenditures.
We require continual study of the
revenues necessary to carry on the
normal functions of the Federal
Government and of the role which
Federal policy should play in the
stabilization of the national econ
cany.
This study includes considera-
tion Of: (a) The practicability of
reclassifying expenditures on a func-
tional basis and the most appro-
pirate methods of financing the
different classiflcations; (b) the
problem of human security, includ-
ing relief and its costs; and Co the
correlation between national income
on the one hand and Government
receipts and expenditures on the
other.
An analysis of receipts and ex-
penditures by major classes over
10-year period, as set forth in the
accompanying table indicates the
nature Of the problems to be studied.
Ordinary Expenditures.
The expenditure side of the budg-
ct may be divided into two major
classes, namely-ordinary, which in
cludes the operating expenditures
for the normal and continuing func-
tions of government, and extraor-
dinary, which includes those ex-
penditures required to meet the non-
operating or the unusual costs Of
government.
General public works of an annual
class, but in view of their flexibility
they have been classed as extraor-
dinary for the purpose of this state
ment.
The foregoing table shows that
the excess of expenditures over reve-
nues in the ordinary classification
ls attributable to various causes:
New functions undertaken; more
carrying charges on the national
debt, though at lower interest
rates; and the Inauguration of the
social security and agricultural pro-
grams. Under all of these classif1-
cations, new expenditures have been
added without corresponding in
eroases In taxes.
Fixed costs have also increased
because of numerous new appropria-
lions for grants and subsidies.
Another type of expenditure has
been forced upon us in increasing
volume by the real necessity for ex-
panding our national defense. We
are all aware of the grave and un-
settling developments in the field
Of international relations during the
last few years. Because of the con-
ditions of modern warfare, we must
now perform in advance tasks that
formerly could be postponed until
war had become imminent. A large
part OF additional national defense
expenditures should, think, be put
In a special category on temporary
basis.
The operating expenses of the
Government have also increased be-
cause Of reductions in the hours of
work Of certain classes Of Federal