Evening star., 1940-12-02
Senate Bloc Plans
Fight on Reduction
In Farm Funds
Move for Economy on
Ordinary Expenditures
Receives First Threat
BY the Associated Press.

! BY the ASSOClaleu TIcSS.
President Roosevelt's announced
plans for cutting ordinary Govern
ment outlays to the bone produced
rumblings of opposition today from
members of the powerful Senate
farm bloc.
Senators Capper, Republican, of
Kansas, from the Midwestern wheat
belt. and Ellender, Democrat, of
Louisiana, from the cotton belt, an
.nounced they would resist efforts to
\slash Government benefit payments
Ito farmers unless farm income i'm
yproved greatly.
This was the first open threat
of opposition since the President
announced last week that he would
recommend drastic reductions in
routine Government expenditures
because of the multi-billion dollar
additional costs of the defense pro-
gram. Annual farm appropriations
averaging we'll above the 81 ,000,-
100000 mark for recent years were
expected to be one of the chief
Fields for economy.
Meanwhile, Senator George, Demo-
crat, of Georgia, ranking member of
3the Senate Finance Committee, gave
1t as his opinion that corporation
income tax rate might be increased
to 80 per cent before the defense
kprogram cost is met. Higher indi-
yidual income tax rates also ap-
)eared likely to him
The present corporation tax rate
is "a per cent where the annual net
income is S25 900 or more, with lower
rates for firms of smaller incomes.
Senator George added that higher
taxes on individual incomes also were
very much in the picture for the
future. Congressional fiscal leaders
said after conference with Presi-
dent Roosevelt Friday night that no
further retroactive taxes on 1910 in
comes were contemplated. They left
the impression, however, that in
creaSeS could be expected on 1941
incomes, both corporate and indi-
, vidual.
Senator George emphasized that
he was taking a long range view
IN discussing tax increases and did
not know what specific steps would
be taken in the next Congress. He
said higher corporation income tax
rates might do business some harm,
but there appeared to be no alter
native.
The Senator advocated amortizing
defense borrowing over period of
years-possibly 20-with provision
for raising enogh taxes to meet
current expenditures and to make
yearly payments on this debt.
This was in line with a general
policy goal reported to have been
fixed at the Friday night White
House conference.
Some such plan is expected to be
advanced in Congress early next
session if the Treasury recommends
an incerase in the present $4,000
100000 debt limitation. Secretary
Morgenthau has said ne would like
to see this raised to about S65 5,000,-
100000.
Little opposition to an increase Is
respected, although Senator George
said he thought there probably
would be attempts to permit the
additional borrowing only for de-
fense purposes.
Senator Adams, Democrat, of
Colorado said he thought there
would be no objection to defense
borrowing if other expenditures
were brought in line with revenues.
Senator Capper, who has voted
for most of the administrations
farm appropriations, said he would
fight any attempts to reduce Gov
ernment payments that have en-
abled many small farmers to stay
in business"
THE farmer usually is the last
one to benefit from any business
upturn or period of prosperity" the
Senator said.
Senator Ellender said the indus
trial upturn expected in the wake
of the national defense program
should greatly reduce unemploy-
ment and relief demands and in
directly aid farm income.
But that wsll not be enough un-
less conditions change great DEAL"
he added.
Farm-minded lawmakers have
won every argument over agricul-
tural appropriations in recent
years. In the present session Con-
gress ignored budget recommended
tions of the President and voted the
usual funds for benefit payments
and nther Q arrinI1lt11re rornnrar,ar