Evening star., 1940-05-28
Debt Limit Boost
To Be Asked
In Congress
PIon, Rotified by
President, Drafted
At 3-Hour PorIey
BY the Associated Press.

By the Associated Press.
The administration and congress
sional leaders agreed today to raise
50 900 100000 of new taxes in the
next five years to pay the costs of
national defense.
The plan, ratified by President
Roosevelt. was drafted in a three
hour conference by Secretary of the
Treasury Morgenthau, Chairman
Doughton of the House Ways and
Means Committee and Chairman
Harrison of the Senate Finance
Committee
1t calls for immediate financing
Of defense costs by the sale of
$4,000, 600, 900 of special national
defense obligations. It also calls
for levying of additional taxes.
amounting to between $500, 900 900
and $700,000, 900 annually for the
next five years. the proceeds to be
used to retire the national defense
obligations" and pay interest on
them.
To Ask Debt Limit Increase.
The conferees agreed to ask Con-
gress to increase the Treasury's
$45, ,000, ,000, 900 debt limit to $48 ,000,-
000, 900 to make possible the bor-
rowing of the new defense funds.
The administration budget, pre-
pared before the defense program
was laid down. already had pro-
vided expenditures which required
borrowing up to the present debt
limit by about June 30, 1941.
A joint statement issued by the
conferees said "the Secretary of the
Treasury communicated to the Pres
ident the conclusions reached by the
conferees and the President ex-
pressed his approval Of the pro-
gram"
Committees to Meet Soon.
The statement also explained that
Chairmen Doughton and Harrison
would call their committees together
Immediately to work out the details
Of the tax program.
There was no indication of what
kinds of taxes might be imposed.
The statement also did not make
it clear whether enactment of the
new taxes would be sought at the
present session of Congress. Its
only reference to the present ses-
sion was statement that the in
crease in the national debt limit
would be asked Immediately.
Accord Announced.
The conferees, the announcement
said, have agreed to ask Congress
at this session to consider legisla-
ton to provide funds for the pay.
ment of the national defense pro.
gram.
Chairman Doughton and Chair
man Harrison stated that they will
convene their committees immedi-
ately to formulate a plan.
They will propose an increase IN
the national debt authorization by
s., ,000, ,000, 900 to provide for thu
issuance Of national defense obli-
cations to be sold with maturities
not to exceed five years, and they
will also propose the levy of addi-
tional taxes, the details of which
are to be worked out by the COM
mittees."
Tydings Demands Action Now.
Meanwhile, Senator Tydinas.
Democrat, Of Maryland labeled the
present state of Government finances
"a sixth column" that may under
mine national security unless action
Is taken now. He declared the un-
balanced budget remains an ex-
posed flank of the national defense
system.
Senator Byrd, Democrat, of vir-
ginia, long an opponent of deficit
spending, Joined Senator Tydings in
demanding revenue legislation now.
He gave the Senate a specific pro-
gram to raise at least 81 1000, 900 900
by a combination of taxes and re-
duction of all Government expenses
except national defense and debt
payment. starting July /.
Senator Byrd proposed:
A 10 per cent horizontal increase
in the existing tax on 1899 income,
payable during 1910, raising $780,
100000.
A 10 per cent increase in misceI-
laneous revenues, which would raise
$125 900 900 for the remaining half
year, and $3.50, ,0O0, 900 for a full year.
A 10 per cent cut in all appropria.