Evening star., 1948-08-16
Summary of Presidents Budget Statement

statement reUeWng the fsc1L
1949 budget:
Budget receipts for the fisca
year 1s4s are now estimated a
$40, TOO, 900 900, s3,7o0, ,Ooo, 900 les.
than was estimated last January
This lower estimate of receipts re.
fleets the impact of the Revenu.
Act of l948. It assumes a continue.
ton throughout the fiscal year o.
approximately the present level o.
incomes.
Budget expenditures are esti
mated at $42, zoo, 900 900. an increas.
of 32,600, ,000, 900 above the estimat,
made in January.
On the basis of these estimates
an operating deficit of 81 500 .00O. .00t
for the fiscal year 1949 Is indicated
However, the Economic Co-opera'
ton Act required the transfer o.
So, 900 900, 900, of the 1948 surplu.
to pay part of the 1949 expenditure.
under the act. This results in ar
adjusted surplus of s1,500, ,000, ,0O(
for 1949.
Some Pa ayments Excluded.
Budget receipts and expenditures
in this review exclude payments into
the Treasury by wholly owned Gov
ernment corporations for retirement
of capital stock or for dividends
Such transactions, previously in
cluded in budget totals, simply in
fate both receipts and expenditures
by equal amounts. They do not
represent operating costs, nor dc
they affect the size Of the budget
surplus or deficit.
During the past three years ]
have repeatedly taken action to en-
force sound and prudent manage
ment of our fiscal affairs, in order
to curb inflationary presures, to
safeguard our financial position and
10 permit reduction of the public
debt.
Nevertheless, as we enter the fiscal
year 1949 we can foresee only a
paper" surplus of $500 ,0O0, 600.
This should be a SOLDERING thought
for all of us. Such surplus-even
if it were real rather than pro-
duced merely by bookkeeping
shift from one year to another
would provide a financial margin
far too small in view of present
day uncertainties and the necessity
of reducing the debt during periods
of prosperity.
In the message accompanying the
l949 budget I stated that the budget
demonstrates alike the heavy re-
Sponsibilities of our international
position and our concern for the
maintenance of a sound domestic
economy" 1 also pointed out that
"our budget must remain high until
we have met our international re-
sponsibilities and can see the way
clear to peaceful and prosperous
world"
Requirements Re-examined.
! Events of the past six months have
added emphasis to these facts. We
have been compelled to re-examine
our requirements for national de-
tense. At the same time, the Federal
Government, like the private citi-
zen, has had to meet rising prices.
In an effort to keep benefits, services
and salaries in step with the mount
ing cost of living, the Congress has
enacted increases in veterans pen
sions, other veterans benfits. grants
to States for public assistance, Fed
eral salary scales, and other pro-
grams.
Events of the last six months have
also emphasized that we cannot plan
our fiscal policy on basis of a single
year only. Programs already au-
thorized for the National Military
Esta abiishment will require a higher
level of expenditures for the fiscal
year 1850. Expenditures for the Eu-
ropean Recovry Program will reach
their peak in the same year. These
increases cannot be met next year
by the convenient bookkeeping de-
vice of $4,000 600, 900 transfer.
During the fiscal year 1948, the
debt was reduced from $25 ,000, 600 900
to $252 900, 100000. On the basis of
present estimates no further debt
reduction can be achieved this year.
Indeed, as long as the present fiscal
outlook prevails. We may face an
expanding debt-even in a period of
high national income when financial
prudence clearly would dictate con-
tinuing debt retirement.
1t is possible that further in
flationary developments may pro-
duce higher revenues than those
now acknowledgements might even
rise above expenditures. Even il
this should prove true. however, it is
hardly sound fiscal policy to rely
on imitation as method of balanc-
ing the budget.
To cut Government revenues In
the face of expanding national and
international requirements. and at
time of increasing inf1ationary
pressmes, was obviously grave
error.
APPROPRIATIONS AND OTHER
AUTHORIZATIONS.
In this review prospective Gov
ernment outgo has so far been ex-
pressed in terms of estimated ex-
penditures. 1t is also necessary to
consider the appropriations and
other authorizations enacted by the
Congress, which permit Government
agencies to incur obligations. Ex-
penditures occur when obligations
are paid; they do not necessarily
coincide with congressional auth
orizations in any given fiscal year.
The Eightieth Congress in its sec
ond session reduced annual definite
appropriations, relating to both the
fiscal years 1948 and 1949. by ST.
700 100000 below the amount which
submitted. For several reasons,
however, this figure does not real
istically reflect the results of con-
gresSional actions.
1t relates to only one segment of
the budgetary actions of the ses-
sions. 1t ignores types Of authori-
cations other than appropriations,
such as loan and contract authori-
zations, which the Congress in
creased more than 81 .0OO. 600 OOO