Evening star., 1939-05-28
Congress Continues Spending
In Spite Of Economy Demands
Drive Meets Obstacles in Farm and Army Civil
Functions Bills, Indicating Another
$1OOOO,OOO,OO Session
By J. A. O'Lea7y.

on other departmental bills, leaves the
net increase in budget recommendation
to date nearly $3.50 100000.
The foregoing figures deal with future
expenditures for the new fiscal year.
This Congress also has passed six de-
ficiency and relief bills for the final
months of the current fiscal year, and
on that front the opponents Of deficit
spending have been more consistently
successful.
But, even in this sector they lost some
Of their early gain as the session pro-
gressed. For example, after they had
cut $150000,000 from the Presidents w.
P. A. estimate in February bringing it
down to SIPS 100000, the President came
back few weeks later with a new re-
quest for the lost amount and got $780,
100000 of it. Thus, the actual reduction
in the original work relief estimate Of
sS75,0o0oo0 was only 100000. From
two other miscellaneous deficiency bills
the Congress pruned $4,000 900.
If one takes these $68, 900 900 of sav.
ings on 1899 deficiency bills from the
approximately s34s 900 by which the
budget figures have been exceeded on the
1910 bills, the sessions record on all ap-
preparation bills as of this date still
shows Congress more liberal than the
budget by $3.50 100000.
AS against an appropriation level Of
about $4,000, ,000, 900 year, the Govern
ment's' internal revenue collections for
1910 are estimated at $3.50 900, ,0OO For
the current year Uncle Sans income is
figured at approximately $3.50, ,070 900.
For the year 1888 the actual collections
were $6,241 100000.
Debt Increase Minimized.
In defending the doctrine of spending
for recovery few nights ago President
Roosevelt minimized the accompanying
increase In the public debt, by emphasiz-
ing that 1t is an internal debt Taking
notice OF the argument that future gen.
erations will have to pay the debt, the
President said that "if our children have
to pay interest on it, they will pay that
interest to themselves"
Senator Harry F. Byrd, Virginia's arch
foe of deficit spending. promptly took
issue with the Presidents statement, de-
scribing it as the Eccles policy of popu-
larizing debt. The Senator did a little
analyzlng to see how the children of to-
morrow would pay the debt interest to
themselves, and arrived at this con-
| clusion:
To-day the average public debt in
| America-local, State and nationals
$1,000 per family. How many families, /"
the Senator inquired, "own 81 800 Of
| public bonds and will draw theif~snare
Of the interest Of which Mr. Roosevelt
speaks? We know that one-haf Of the
Federal debt is owned by the banks.
| Comparatively few American families
| own bonds and are recipients Of Federal
interest, so the vast majority will be
paying taxes to pay interest to the small
number of families owning the bonds.
Those taxes will be paid, as Mr. Roose-
velt once expressed it, out of the sweat
of every man who labors''
In the January budget message tho
| interest on the public debt for the cur
rent year was figured at 1916 900 900.
For the fiscal year starting July 1t will
exceed 81 900, 900, 900. In 1888 the interest
item was $68o,00O,OO0.
The direct debt today is approximately
$40, 900 900 900. Existing law places a
ceiling of $45 900, ,000, 900 on Uncle Sans
obligations. No effort is being made at
this session to raise this limit, but there
| is awaiting Senate action House bin
! to give the Treasury more leeway in dis
| trihuting the debt between long-term
| bonds and short-term notes. The Second
Liberty Loan Act provides that not more
than $4,000, 900 900 of the total debt may
be in bonds. With the amount of bonds
now approaching the $28,500 900 900
mark, and short obligations of more
than $1,000 900 900, the pending bill re-
moves the limitation on bonds to allow
flexibility in future financing within
the remaining $4,000 100000 of debt
authorization.
Debt Offset Claimed.
The President contended in last weeks
broadcast that large part of the debt
Is offset by debts owed the Government,
and administration supporters in Con-
gress join in making this claim. Again.
on this point, Senator Byrd takes issue:
1.-THE published direct debt" he says,
includes only small fraction of re-
coverable assets in the form Of loans.
Such operations to which the President
refers are paid for by the numerous
lending corporations whose wholly guar
anteed obligations are not included in
the direct public debt Even considering
the total Of such loans in the aggregate
of the direct and contingent debt, the
percentage would fall far short of q
large part Of the total debt. No ap-
praisement of these corporations has
been made. The losses are certain to be
large and must be paid by direct taxa
ton. If such loans are to be considered
as recoverable. the debt today should be
stated as follows: Direct, SAC, ,229 900 900;
wholly guaranteed contingent debt Of
Government corporations as reported by
the Federal Reserve Board, $6,310, ,O00, 900,
or total Of $40 1888, 900 y000."
In the opinion of Senator Byrd only
"an incOnSe0llentia1 nart' of the diract