Evening star., 1946-08-04
Gives Budget Surplus
As Objective for
Following Year
fTert OF Truman's Budget Reuie,u
on Page A-11.)
By Joseph A. Fox

President Truman reported
last night the Federal Govern
ment will have an operating de-
ficit of ,900,O0O,0OO in the cur
rent 1940 fiscal year, and de-
clared that "a substantial bud
get surplus must be our objec-
tive" in the IL months following
next July /.
Conforming to the usual custom
of presenting mid-year review and
revision Of the budget which has
gone to Congress the previous jan
uary, the President reiterated that
governmental economy is 'impera-
tive" and warned anew against
further tax cuts until the present
infationary situation has passed"
Bolstering the demand for savings,
the President writing to top officials
called for specific retrenchment in
spending for the naval and military
forces, merchant ship construction
and public works.
Public Works Moratorium.
He proposed that the Navy hold
expenditures to $3.50, 1000, 900, and
the Army, to S8,0O0,0O0 900. ex-
elusive of the terminal leave pay.
and announced a 60-day mora
torium ending October l on new
Federal public works.
He asked War, Interior, Agricul-
ture, the Federal Works Agency and
the Tennessee Valley Authority to
cooperate in holding off on all but
absolutely necessary projects.
The War-Navy total represents a
reduction of s1,65o,0O0,o 900 in pro-
posed expenditures, and the Presi-
dent told the heads Of the two de-
partments that he was convinced
this modification in program can
be accomplished without impairing
our effective defense
The President urged further that
added economies be sought.
The deficit now predicted by Mr..
Truman for the fiscal year which
ends next June 30, is less than half
that in prospect in January, when
the figure stood at $4,000 ,000, 900.
The revision, it was explained, re-
suits from higher revenues than
were anticipated, which, however,
will be absorbed in part by greater
expenditures.
Debt Estimate Shaved.
At the same time, the January
estimate of a s271 ,00O. 900 900 public
debt and by next June 30, has been
shaved to s261, 900, ,0o0, 600.
While the review had an opti-
mistic tone as the President COM
pared the prospective deficit of the
first full postwar year with a $751;
90o,00O,00o deficit in the last wal
year, the Chief Executive said he
was deeply concerned" by in
creased outlays which will boost
budget expenditures originally pro-
posed by S. 500. 900 900 to SAL 500,
100000, as compared with revenues
of s39 800 100000
He pointed out that increased
funds voted for national defense
refunds. veterans programs, inter
national finance, housing and pos
tai service, actually raise the Janu-
ary spending estimates by s7,500,-
100000, but that a $4,000 000,O 900 off
set is obtained by reductions in other
directions, notably agriculture. So
cial security, general public works
and general government.
Mr.. Truman singled out expand.
ing veterans benefits for special at.
tention, expressing conviction tha'
Tightening of standards for vet.
erans' programs. especially for re.
adjustment allowances and on-the.
job training, can bring considerable
economies He also announced
that Veterans Administrator Brad
ley had been instructed to takt
action in this direction "in ordel
TO protect both the rights of de.
serving veterans and the nationa
pocketbook."
Receipts Up Billion.
The new estimate of net receipt!
is more than $4,000, 100000 abov,
the January approximation. MI
Truman said the revised figure il
based ION the expectation that tn,
high dollar volume of economic &C
tivity will continue, with a high
level of taxable individual, ant
corporate incomes and large sale
of taxable commodities 1t alst
assures continuation of the presen
tax rates.
: In this connection, the Presiden
4said that when budget and trus
accounts-which include such item
as retirement and social securit,
funds-are consolidated on a strict,
cash basis, the Government will
(See BUDGET. Page ALL