Evening star., 1947-05-04


'etirement. 2. Budget cutting, to
3. Drastic vs.. moderate revision Of
. .phony" saving, pointing out that
erroneous collections must be re-
funded. and win require later de-
Ificiency appropriation II they run as
high as the Treasury figures. RE-
Ipublicans insist that II taxes are
reduced the smaller amount for re.
funds will be adequate. Some neu-
tral observers conclude that the tax
refund saving IS, at least. gamble
. cut that may or may not hold.
It must be said for the House
COP leaders that, to date, they have
shown q determination to stand by
their economy pledges on the floor.
Some concessions have been made
here and there to prevent Repub-
licans whose districts have been
hit by committee cuts from ioin-
ing the Democrats in upsetting the
program completely.
But until the Senate has voted
on two or three OF the money bills.
1t Is impossible to tell how success.
ful the economy drive will be. A
battle also is certain In both houses
II the economy advocates make sub
stantial cuts in Army and Navy
estimates, as they will have to do
TO achieve their original goal. The
unsettled condition OF world affairs
Will give the defenders OF the Army
and Navy budgets strong talk.
ing point.
Pitfalls in Tax Cut.
In view of all these conditions, It
Us becoming increasingly apparent
that the political reputation OF this
first Republican Congress in is
years will rise or fall on the out.
come Of the economy drive.
They should have no great
difficulty in sending tax-reduc-
ton bill to the White House. Tax
relief is hard to vote against. This
is shown by the fact that some
Senate Democrats have drafted
their own plans, aimed at giving
more Of the aggregate saving to the
little fellows.
But, II the Republicans get tax
reduction without taking 1t from
Government spending, or If they get
lit without some corresponding cur-
tailment in the huge s258 900 900 900
national debt, they will be open to
the charge Of unsound fiscal policy
In next years campaign. COP policy.
makers In the Senate are confident.
however, they will be able to wind
up the session with enough savings
to show? some debt retirement rs
well as tax relief.
Truman Also Has Problems.
They got some encouragement
from the recent announcement by
President Truman that the Govern
ment expects to end this fiscal year.
June 80, with a $1,25o0o0,000 STIR
plus, instead Of deficit that was
forecast in January. They argue
that a similar upward revision is
justified in the Treasury's earlier
estimates Of next years receipts.
But the Republican leaders in
Congress are not alone in facing
important decisions during these
next SO days. President Truman
likewise must decide whether to
sign or veto these major bills as
they reach him, and his decisions
will affect Democratic prospects
next year. OF course, there will be
another whole session of Congress
in 1948 before the election cam
paign starts. Nevertheless, the
economic condition OF the country
in 1948 is apt to be charted by the
laws passed in this session.
BY throwing all proposed labor
changes into one bill House and
Senate COP leaders decided to
risk possible veto. And Mr.. Tru-
man, by using his veto power. could
put the Democrats in position to
claim the support of organized labor
next year.
Political Gamble.
A veto of tax reduction bill,
however, probably would work to
the advantage of the Republicans.
Mr.. Truman has stressed the Inn
portance Of bringing down the debt
while Government income is high,
and has warned that tax reduction
now would promote imitation. OF
course, he has not committed him
self in advance as to what course he
would take on any particular tax
plan still In the drafting stage.
There is one factor, however, that
would make tax bill veto decided
gamble, politically. That is the
payroll withholding method Of col
lection. It means that each wage
Garner knows from week to week
how much the government Is cost
ing him. 1t means that any tax
cut would be equivalent to an Inn
mediate increase In take-home pay,
and would have a direct appeal to
the same voters who would be
grateful for q vote Of drastic
labor-curbing bill.
In the days when taxes were paid
IN . hump sum, annually or quar-
terly, the wage Garner was not
reminded Of his obligation 80 often
land at that time the lower rates
failed to touch thousands who were
made taxpayers by the low, war
TIME exemptions.
At any rate. those who like to
speculate on the political effects Of
current events viii find plenty Of
r.