Evening star., 1947-01-07
Truman Budget
Set
Al 81 Billion
Stond Against Cuts
In Taxes Is Seen,
Providing Hot Issue
By the Associated Press

President Truman was re-
ported ready today to send Con-
gress a $37. .0O0, 900 900 budget and
simultaneously take a strong
stand against any tax cuts.
This speculative figure clashes
head-on with estimates already CIV
en- reporters by the new Republican
chairman of the House Appropria-
tions Committee, Representative
Taber Of New York. He told report
ers the needs Of Government can
be met with about $40 SOC. .ooo, 900.
Also the Presidents view that any
revenue surplus should go to reduce
the public debt-as already indicat-
ed in his state-of-the-Union mes
sage-runs into determined tax
cutting drive by Chairman Knutson
of the House Ways and Means Com
mittee.
Mr.. Knutson contends Congress
can reduce levies on incomes up to
$3o0, 900 by 20 per cent and still bal
ance the budget by cutting ex-
penses.
Three Hot Issues Now.
Thus the budget and taxes join
labor law revision as the hottest is
sues of the new Republican dom
mated Congress.
Usually well-posted administra-
ton men say they expect the Presi-
dent in his budget message Friday
to anticipate the Republican econ
omy and tax drives with these
arguments:
l. The only way Government
spending can be reduced Is by cut
ting down on services and benefits
to veterans, aid to States and similar
programs voted by Congress in the
past and therefore not subject to re-
duction by presidential action. :
2. When the time comes that the
Government can afford to reduce
taxes, first consideration should 60
to the lower income brackets plus
such tax relief as will provide in
centive to expand business and en-
ployment opportunities.
Excises' Future Clouded.
/. Meanwhile, prospects for slash
In the $9-a-gallon wartime liquor
tax faded, the outlook in other excise
levies appeared in a state of con-
fusion. and opposition grew louder
against the Republican proposal for
the $3.50 .000, 900 slash in individual
income taxes.
That was the picture on Capitol
Hill following Mr.. Truman's state Of
The Bniun message In which he put
4first emphasis on debt retirement,
avoided Arfy mention OF the COZ
tax slashing bill, and called for con-
tinuation of high wartime excises.
These were the alternatives con-
fronting Congress:
Excise taxes:
1. Continue all wartime excise
rates-on liquor, furs, jewelry, lip
stick, theater admissions and many
other goods and services--for year
beyond July l, when an automatic
reduction is required by the 1943
revenue act. Such action by Con-
gress is unlikely.
Quick Cut on All Also Out.
2. Pass q bill similar to that Of
fered by Representative O'Toole,
Democrat, of New York, yesterday
to roll back all the excise rates i'm
mediately, not waiting for the July l
reduction. This, too, appears I'M
probable.
8. Cut back quickly those excises
which some members believe may
depress business, as on furs, jewelry
and luggage, and continue the big
rates on other items such as liquor.
This course gained favor with many
lawmakers.
Individual income taxes:
/. Cut the levies 20 per cent on
all income up to $500, 900 a year, thus
easing the tax load for IS, ,000, 900 in
come taxpayers by $3.50, 600 900
There is stormy opposition to this
by Democrats and some Republicans
2. Allow no income tax cut at all
This seems unlikely.
8. A compromise, putting principal
emphasis on relieving the tax burden
of low-income groups. Some Demo-
Gratis and Republicans are pushing
this idea, and there seems to be a
somewhat general feeling there will
be some personal income tax re-
visions this year.
Veto Battle Discussed.
Some members privately inter-
preted Mr.. Truman's speech yester-
day as determined stand against
any tax cuts, and some actually dis
cussed the possibility OF a veto bat
tie If congressional tax cutting goes
too far in the Presidents opinion
The usually well-posted Govern
Iment informants indicated the Pres
lident will estimate next years ta1
receipts at around $38 ,500, } ,000, 900
and will insist that all present taxes
including the wartime excise rates
| be maintained so that a substantial
payment may be made on the debt
Expenditures In the current fiscal
year are running at q rate Of about
| $41 ,000, 600, 900, while revenue il
| slightly below that figure.
II the budget is. balanced in the
Ia months beginning July it will
be the first time in is years.