Evening star., 1949-07-03
COP. Leaders Blame
Truman Policies for
Big Federal Deficit
by GouId Lincoln

BY Gould Lincoln
President Truman. caught at
the close of the fiscal year with
q deficit approaching $4,000. .0O0,-
900, was a target yesterday of two
Republican leaders. They criti-
cized him for: Cd failure to han
die successfully the Governments
financial affairs and Cd his pro-
posals for enormously increased
spending for new socialized
projects.
Commenting on the recent
speech by former Secretary of
State James F. Byrnes, Republi-
can National Chairman Hugh D.
Scott said Mr.. Byrnes agreed that
in peace time the Government
should not resort to deficit f1nanc-
ing, and came to the inevitable
conclusion that "the only wise
course is to reduce expenditures
and live within our income"
THE blow administered to the
Truman administration by the
speech of Mr.. Byrnes is one from
which the administration is not
likely to recover" Mr.. Scott said.
This was an attack which could
not be discounted on the grounds
of partisan politics. 1t came from
a man who held some of the most
important positions in the Gov
ernment under the present and
preceding Democratic administra-
tionS."
Says People Disguised.
Mr.. Scott said the address
"dramatized the disgust of the
American people with the pro-
gram of socialism which Mr. Tru-
man is trying to impose upon the
Nation"
Declaring that the Truman pro-
gram has made practically no
PROCESS, Senator Knowland Of
California, Republican, COM
mented:
mo President has asked so
much of a Congress controlled by
his own party and received so lit
tle-in a six-month period"
The California Senator said that
the huge Truman program showed
the folly of asking the National
Legislature for more than it could
digest and act upon. He added
that the Truman administration
faced with a huge deficit, would
now have to get out its pencils and
really cut expenditures. He said:
Il believe that the resolution
calling for S to 10 per cent cut
in Government spending by the
President offered by Senator Nc
Clellan, Democrat, of Arkansas,
now will be passed. I would pre-
fer having Congress make its own
cuts in the appropriation bills
but since it seems too late to do
that, this direction to the Presi-
dent to cut expenditures seems
the next best thing"
Letter Sent to G.. O. p. Workers.
Chairman SCOTS statement was
contained in letter sent to Re-
publican workers all over the
country. He quoted Mr.. Byrnes
as saying that proposals in the
Truman program would curtail
the liberties of the people," are to
be made possible by Federal
aid,' and that there are no Fed
eral aid funds except those taken
from your pockets"
Mr.. Scott said Mr.. Byrnes' stric-
lures on the Truman administra-
tion are worth remembering; that
they draw line of demarcation
between what Mr.. Truman is
trying to do to our Nation and
the time-tested system of gov
ernment under which we have at
tained our present position and
eminence."
"One of the most deceptive de-
vices" continued Mr.. Scott, lis
that by which the costs of various
social security programs-the pro-
posed socialized medicine bill is
a prime example-are represented
as being financed by payroll de-
ductions in the case of employees
and matching contributions from
the employers This system of
alleged financing is nothing less
than outright fraud. Advocates
of the system seek to convey the
impression that the payroll de-
ductions are idential with premi-
um payments on an insurance
policy.
Lets see how that comparison
holds up. When you pay a premi-
um on an insurance policy, that
premium is invested by the COM
pany in approved securities and
thus your premium becomes a
part of the capital structure of
the Nation. It actually goes into
investments which stimulate pro-
duction and thus increases the
national welfare.
Scores Withholding Plan.
what happens to a so-called
premium withheld under one of
the administrations so-called Sc
curity programs? That deduction
goes into the general tax fund
and is spent to help meet the
running expenses of the Govern
ment. To keep the books in order,
as this money is spent, it is re-
placed by an equivalent amount
of Government bonds. It is at
this point that the actual fraud
comes in.
Remember a Government bond
is an obligation on the part of
the Government to pay an
equivalent number of dollars. And
<s!,cSe do those dollars come from?
From taxation, of course. So the
way the system works out is that
the employe is taxed once to buy
the bonds which are supposed to
constitute the reserve (for the
social insurance. and then is
taxed again to provide the dol