Evening star., 1946-08-04
President Truman's statement

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In accord with previous practice
I present at this time review of
the Federal budget for the fiscal
year 1947. as we'll as actual figures
for the fiscal year 1916. This re-
vision of the January budget esti-
mates takes into account not only
the action on appropriations which
the Congress has Just completed,
but also other new legislation
adopted since January and changes
In the economic outlook.
In view of the mounting inf1a-
tionary threat, I have instructed
Federal agencies to take drastic
action to hold down expenditures
and keep the expected deficit to the
minimum. This review reflects the
expected results Of such budgetary
action.
/. SUMMARY: BUDGET TRENDS
AND BUDGET POLICY
Total budget expenditures for the
fiscal year 1947. are now estimated
at Ais billion dollars, and net re-
ceipts at 1916 billion dollars. leaving
an estimated budget deficit of l9
billion dollars.
When budget and trust accounts
are consolidated on a strictly cash
basis, the Federal Government In
the current fiscal year will take
in 28 billion dollars more In the
form of taxes and similar cash re-
ceipts from the public than it will
pay out to the public. In spite
of deficit in the budget, there will
thus be a net absorption of pur-
chasing power by the Federal Gov
eminent in the fiscal year 1947.
Situation Has Changed.
The situation has changed ma
terially since the January budget
was issued. Both expenditures and
revenues are higher than were esti-
mated then. The January budget
estimated a deficit of As billion
dollars for the fiscal year 1947 !
now expect deficit of less than half
that amount.
AS I anticipated in my statement
of April II, the budget results for
the fiscal year 1916 were much bet
ter than expected in January. Then
a deficit of nearly % billion dollars
was expected, about billion dollars
greater than actually occurred.
For the two fiscal years 1916 and
1947 combined, the budgetary i'm
provement over the January esti-
mate is very striking. At that time
it was estimated that the deficits
for the two years would total 81
billion dollars. An aggregate deficit
of 226 billion dollars for the two
years Is now expected-a reduction
of one third. AS result the Janu-
arv estimate of a billion dollar
public debt on June 80, 1947, is now
reduced to 261 billion dollars. or
10 billion dollars less.
In less than two years the budget
deficit has been cut from one OF
$50 billion dollars in the last full
wear of war to one of 19 billion
dollars in this. the first full year
after the end of fighting. This cut
tn the defict reflects substantial
deduction in Government expendi-
lures, with taxes maintained at a
high level.
Z. S. Outlavs to Be Reduced.
Federal outlays will be reduced
from the -billion-dollar wartime
peak to AIS billion dollars in the
fiscal year 1947--an expenditure
still heavily loaded with war-related
outlays. Revenues are expected to
decline much less than expendi-
tures-despite the effects of the
Revenue Act of l945-from a 465-
billion dollar wartime peak to 1916
billion dollars. The contraction in
wartime expenditures reflects more
than 80 per cent cut in munitions
procurement. rapid demobilization
of the armed forces and consider
able curtailment in civilian Federal
personnel.
The strength of the armed forces
has been reduced from a wartime
peak of 1873 million to the present
level of about 2.7 million; it will be
further reduced by at least another
million by June 80, l947. The total
number Of Federal civilian en-
ployes in the continental United
States has been reduced from a
peak of million to % million.
/ expect further substantial re-
duction during the fiscal year 1947
despite the important increases re-
ouired by the program of veterans
services and surplus disposal activ-
tiles.
This contraction in wartime bud
gets has been achieved through the
concerted and joint effort of the
Congress and the executive agencies
The budget recommendations
which I have transmitted during
this session have been based on
severe scrutiny of 34.2 billion dol
lars of agency requests, which I
reduced by % per cent to 265 bill
lion dollars. The Congress reduced
them further in appropriating 24.s
billion dollars. rThese figures ex-
clude 78 billion dollars of indefinite
appropriations for interest on the
public debt, refunds and various
smaller items.)
So Billion Reseinded.
Furthermore, the Congress has
on my recommendation rescinded
during the last year So billion dol
lars of wartime appropriations and
authorizations. In addition to the
formal rescissions, We have. through
budgetary processes, succeeded in
securing the transfer of more than
2 billion dollars from special ac-
counts to the Treasury surplus fund
and miscellaneous receipts. These
amounts otherwise would have been
available for expenditure.
Many Of us are not yet satisfied
with the progress made. 1t must
be recognized, however, that not
only war but the aftermath of wal
and the transition to peace are
very expensive.
National security and intern
ational commitments compel us to
maintain strong military esablish-
ment. Our participation in inter-
national organizations. In the
occupation of enemy countries. in
interna tional finance and reliet