Evening star., 1940-06-18
oxes and Economy

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spending as part Of the national de-
tense tax program, the Senate FL
nance Committee acted wisely In
vesting discretion in the President to
determine where the cuts should be
made.
Nothing is more important at this
moment than development without
delay of an Army and Navy strong
enough to discourage any dictator
from casting his eyes toward this
hemisphere. And the Chief Execu-
tive should be able, by careful selec-
tion, to carry out without undue
hardship the Byrd amendment, which
requires reduction of ten per cent
in the total of the 194l budget re-
naming after excluding all defense
items and fixed charges. 1t does not
require a horizontal ten per cent
slash in each appropriation.
If in this way several hundred mil
lion dollars can be withheld from
non-essential activities, it will aid
the Treasury materially during the
Forthcoming period of urgent pre-
paredneSs. Senator Byrd of Virginia
believes the amendment will save be-
tween $450,000,0OO and $500, 900 900,
but even if this estimate proves high,
after allowing for fixed charges, even
a smaller saving will be worth while.
In carrying out this economy plan,
however, it would be unwise and
unfair to cut into the earning power
OF Government employees. 1t would
be unfair because these Federal
workers. most of whom are in the
lower salary brackets, will have to
pay the increased income taxes levied
by the bill for national defense. A
pay cut, therefore, would be double
tax. 1t would be unwise because any
move by the Government in that
direction would encourage salary cuts
in private industry, and this is no
time for such trend, when the in
dustrial workers of the country must
speed up production of the many i'm
plements going into the defense pro-
gram.
Senator Byrd has given assurance
that his amendment will not touch
the basic salaries of Federal en-
ployes. The Budget Bureau has ad-
vised him informally that, since sala-
ries are written into the Classifica-
ton Act, they come within the
definition Of fixed charges not sub
ject to reduction.
There is still the possibility, how
ever. that employees could be fur
loughed if the impounding of part of
an agencys funds left it without
sufficient money to keep all of its
personnel on the pay roll throughout
the year.
This possibility also should be
guarded against in administering
the economy amendment, for a fur
Tough is still a pay cut, even though
1t may not be as lasting in its effect
as change in basic pay. President
Roosevelt has emphasized since the
present emergency arose that social
gains should not be sacrificed or lost
sight OF in the drive for prepared
ness. And Congress itself is needing
this admonition by providing that
navy yard employees and private
shipyard workers shall be paid time
and a half for overtime.
1t is fair assumption, therefore.
that if the selection of economies is
left to the President, he will in the
light of his recent utterances, avoid
imposing hardships on Government
personnel.
The Government provides funds
for many activities which, though
highly desirable in normal times.
we'll could be postponed to strengthen
the Treasury in these troubled days.
1t could, for example, slow up on
peacetime public works, since the
defense program will create numer-
Gus opportunities for employment in
other industries.
The Senate committee made COM
paratively few changes in the billion
dollar tax program as 1t came from
the House, which will facilitate
speedy enactment. Efforts will be
made in the Senate this week to
broaden it by levying new excess
profits taxes, but unless Congress is
prepared to take the time required to
go into that subject thoroughly. it
should not act hastily on that COM
plicated phase of the tax question.
The wiser course would be to pass the
pending bill promptly, so that the
Treasury may proceed with defense
financing, and take up the excess
profits problem later. The House
Ways and Means Committee alreadv
has instructed the Treasury to pre-
pare separate legislation for the next
session on that subject, which could
be made to apply to this years
profits.
Hitler No Accident?