Evening star., 1950-06-16
Joint Economic Group
Hits Deficit Spending;.
Asks Relentless Cuts
BY the Assoeiased Press

BY the Assoeioisd Press
Warning that there are dangers
of imitation, the Senate House
Economic Committee has raised a
demand for relentless" cuts in the
Governments in-the-red spend
ing.
The committee issued q report
yesterday signed by its eight Dem
ocrats, while the six Republicans
in the group presented a separate
finding Of their own.
Even the Democrats failed to
indorse President Truman's plea
for net increase in taxes. They
did ask for some excise tax cuts,
and said also:
In years Of such booming
business as currently Is causing
prices to boil up in an infiationary
manner throughout the economy,
this Government should not be in
curing deficits"
Mr.. Truman asked last January
for cuts in excise taxes, to be bal
anced by additional revenue from
other sourceS-plus an additional
billion dollars, mainly from higher
corporation taxes, to help trim
the Federal deficit.
Discusses Economic Message.
The congressional committees
report dealt with the Presidents
annual economic message, which
he also delivered to Congress in
January.
Except possibly to boost the
morale Of the congressional econ
omy bloc. the committees report
was expected to have little effect
on legislation. for these reasons:
/. For the third straight year,
the advisers of Congress on eco
nomic matters divided on strictly
political lines.
2. The report was 31a months
late; 1t was due March /. BY this
time 1t cannot sway many votes.
3. The Democratic majority
took no fiat stand for or against
any of Mr.. Truman's specific pro-
posals. though Chairman O'Ma-
honey of Wyoming said its re-
port. broadly speaking, indorses
the objectives of the Presidents
message"
Senator Taft, top-rariking Re-
publican member, said Republi-
cans could agree with most of the
economic findings of the major
ity, but could not indorse White
House message which is predom-
inantly political"
Purpose Is Questioned.
When questioned whether the
committee is Serving a useful
purpose" under the Employment
Act Of 1946-to advise Congress
on maintaining maximum en-
ployment, buying power and pro-
duction-Taft told reporters:
ut is serving a useful purpose,
but whether 1t serves the purpose
for which 1t was intended, 4
wouldn't say"
The majority report-in para
graphs with which the Republi-
cans did not quarrel-reported
signs of a renewed upsurge in
the economy"
But it saw underlying problems
and weaknesses" Most econo-
mists are reserving Judgment on
the business outlook for 1851, itI
was noted, becausesa a tapering-off |
in the automobile, steel and build
ing industries is highly probable. "
The No. / principle which should
guide econmic legislation, the re-
port said, is to aid expanding,
encouraging and fostering pri-
vate enterprise" as a source of
Jobs and income for a growing
labor force.
Other perils were named. It
farm income continues to fall,
business and industry may suffer;
small business is losing ground in
the struggle for profits: rising
price indexes may put q damper
on consumer demand. The COM
mittee said:
Consumer prices are being kept
so high that consumer buying
power, especially of those of the
lowest four-f1fths Of the income
scale, is being undermined.