Evening star., 1947-01-10
Slight Surplus Shown;
Keep Excise Taxes,
President Requests
Following Is condensed uer-
sion OF President TTunlan's
budget message:

sion of President Trunans
budget message:
To the Congress of the United
States:
I am transmitting the budget fol
the fiscal year 1948. 1t includes
recommendations for the entire
Federal program.
Expenditures under existing ano
proposed legislation are estimated
at BIS billion dollars and revenues
under existing tax laws at 37.7 bill.
lion dollars, leaving a very slight
margin of surplus.
I strongly recommend that the
Congress take early action to con-
tinue throughout the fiscal year
1948 the war excise-tax rates, which
under the present law, will expire
July /. 1947. My declaration of the
end of hostilities on December 81
1916, was not issued in order to
achieve tax reduction.
I considered it essential that war
excise-tax rates be retained, but !
also considered it necessary to
terminate the state of hostilities'
as soon as it became possible to
do SO.
also recommend that the Con-
gress increase postal rates sufficient
ly to wipe out the postal deficit.
These recommendations would re-
duce expenditures to 37.1 billion dol
lars and increase revenues to 1873
billion dollars. We would then have
a budget surplus of 1.8 billion dol
lars.
AS long as business, employment,
and national income continue high,
we should maintain tax revenues at
levels that will not only meet cur
rent expenditures but also leave a
surplus for retirement of the public
debt.
Opposes Tax Reduction.
There is no justification now for
tax reduction. At today's level OF
economic activity, our present rev.
enue system will not yield so much
in 1948 as in the current year. We
shall no longer collect large sums
from the excess profits tax, and
sales of surplus property will de-
cline.
Revenue estimates are, of course,
to a very large extent determined
by the level of business activity. In
this budget. it has been assumed
that, with minor fluctuations, busi-
ness activity will average slightly
higher than in the calendar year
1916. A recession in business would
cause tax yields to drop.
In addition, the cost of support
ing agricultural prices and payments
to unemployed veterans would in
crease. Should such a recession
occur. it would be a temporary
slump growing out of transition
period difficulties and would call for
no revision in our budget policy.
For the fiscal year 1947, it now
appears that receipts will amount
to 400 billion dollars and expendi-'
lures to 425 billion dollars. The
1-billion dollar increase in expendi-
lures over the August estimate oc-
CURED largely in veterans programs.
For example, many more veterans
than had been expected decided to
go to college or enroll for job train
ing.
Agencies Cut Expenditures. +
The deficit for the current fiscal
year would have been larger if
executive action had not been taken
to place expenditure ceilings on
some activities end to hold them
we'll below the amounts available
under appropriations already made.
The way the various departments
and agencies of the Government,
particularly the War and Navy De-
partments, have succeeded in cutting
their expenditures Is gratifying. '"*
This budget meets our basic re-
quirements for Federal programs at
home and abroad for the fiscal year
1948. The Federal Government must
not only fulfill its contractual obli-
cations; it must also provide the
services that are necessary for the
welfare and the progress of the
Nation. We have to carry our proper
share of the expense of building
world organization. We must make
effective provision for national
defense.
We have many other commit
ments, both international and do
mestic, that must be honored. In
fact, a very large part of all Our
expenditures in the fiscal year 194o
will be required to meet commit
ments already made. The budget is
designed to meet these needs, and
to execute every program with strict
economy.
Wartime Services Trimmed.
The reconversion of wartime mill
tary and civilian services was far
advanced during the calendar year
le46. Of 26 emergency war agencies
in operation shortly before vi day
only five remain, and three Of these
are winding up their work. Two
others-the War Assets Administra-
ton and the Office Of Temporary
Controls-have been added to help
close out the war program.
The 1948 budget assumes a reduc-
ton of civilian employment in the
Government as a whole to less thar
three-ffths of the wartime peak
number-in addition to the heavy
shrinkage of the armed forces.
The Government has been exertlne
every effort in the wake of the wal
demobiliza tion to strengthen ano
make more efficient its interna
organization and administrative
methods. 1t is essential that citi-
zens receive maximum service fol
their tax dollars, and the admins.
tration plans further intensive meas.
ures to improve the administrative
practices, organization, and efficiency
of the departments and agencies.
But the cost of peacetime service.
has risen strikingly as compared
to these costs before the war. Pre-.
war figures can no longer be usee
as a yardstick. Although Govern
ment wages have not been raised
so much as private wages, the cos
of supplies has risen in line with. thu
cost of goods in private markets.