Evening star., 1939-03-23

Congress itself a1l
has been waging
against the ad- ~,.. - .
minis tr alton, nav'a Lawrence
particularly through the cut of $780,
1000 In the relief expenditures.
So long as Congress attempts to
play politics with that $3.50, ,000, 900
item, no quarter can be expected
from the President. He knows that
tho subtraction of $50, ,0O0, 900 from
tho w. P. A. expenditures at this
critical time Of unemployment is not
going to balance a budget already
unbalanced to the amount of So
0O,000,0 900, and he thinks Congress
knows this, but is trying to put him
on the spot before the country as
spendthrift just the same because
he will not agree to the cut.
Making Empty Gestures.
Congress has been making empty
gestures toward curtailing expenses,
but out of a $1,000 900, 900 budget
has found only 1000 900 thus far
to cut and this is to be taken from
the relief payments. Likewise, Con-
gress has been talking a great deal
about economy, but no group there
In has presented a comprehensive
program for cutting Government ex-
penses, for the very good reason,
perhaps, that there is none which
can be offered which does not have
in 1t political repercussions of a
serious nature for those who do the
suggesting.
The administration case might
be put this way: II businessmen
want tax revision they must not
at the same time insist on cutting
OF relief appropriations, and this
applies to those in Congress who
have been endeavoring to reflect
what appears to be a Nationwide
sentiment for curtailment Of ex-
penses.
It will be noted that at the Presi-
dents press conference in which
he frowned on certain changes in
the tax structure, he spent most of
his time talking about those who
wanted to prune Government ex-
penses. This was the subject up
permost In his mind, and when
ever tax changes were mentioned
he kept repeating that those who
wanted to cut Government appro-
priations could not at the same
time consistently ask the Treasury
to accept loss in revenue from
tax revision.
Danger Ahead.
As usual, the right policy lies
somewhere between these two ex-
tremes. Government expenses could
be cut, Of course, but q ruthless
curtailment, effected Immediately,
would undoubtedly bring on a de-
flationary trend which might bring
serious consequences to the social
order, producing more unemploy-
mant because of the sudden diminu-
ton of Government stimulus to
purchasing power.
To achieve a balanced budget
and to cut off Government SPEND
ing there must be private spending
In its place. This requires careful
planning and some extension of
intermediate credit on the same in
surance principle as that on which
the Federal Housing Administra-
ton loans were made through pri-
vate banks. Unless business can
offer a program that will insure
substantial increase in private
spending in the next "a months,
Mr. Roosevelt isn't going to permit,
II he can possibly avoid 1t, any
substantial change in his public
spending policies. He resents the
efforts Of Congress to hamstring
his policy by nibbling away at the
w. p. A. expenditures, which he
insists both from economic and hu-
manitarian standpoints are abso-
tutely essential.
Business Has Good Case.
Businessmen, on the other hand,
have a perfectly good case for tax
revision, and not as means either
Of restoring methods of tax avoid
ance or for the purpose of loading
small businesses with extra taxes
that are Topped of big businesses.
The latter argument Is merely part
of the political claptrap Of the hour
and Is banded back and forth in
the effort to fight back at the ad-
nainistration's opponents.
There are unquestionably many
changes in the tax laws which, far
from reducing revenues, would ac-
tually increase them materially.
The Treasury Department knows
this and wants it done. But Mr..
Roosevelt isn't ready to yield un-
less he gets In return some ap-
proval for the appropriations he is
asking. He has not said it In so
many words and probably would
not put 1t on any such basis, but
E such an inference is clear from
study of recent events and from the
emphasis placed by the President
on Tuesday on the need for main
tanning purchasing power through
continued Federal expenditures.
It does look like q staiemate for
the moment, but the President is
engaging In risky procedure, be-
cause he may be unwittingly en-
couraging . revolt among the
Democrats Of Congress, many Of
whom, together with the RepubN-