Evening star., 1950-12-03
.WarCriisis Ends
TO
Profits Taxes
Both Parties Expecting
Compromise Vote
Before Christmas
By Cecil HoIIond

$17,850. 100000 more in defense
funds and mounting congressional
concern over the grave turn of
events in Korea were reported
yesterday to have taken the
heart" out of opposition to the
enactment of an excess profits
tax bill at this session of Congress.
That view was expressed by
Democrats and Republicans alike
who said they believed a compro-
mise profits tax bill would be
passed before the end of the year.
At the same time, Chairman
George of the Senate Finance
Committee warned there would
be sharp increases in Federal
taxes next year AL along the
line - on corporation and in
dividuals.
There was no disposition to
question the Presidents request
for vast new defense outlay and
it is expected to receive approval
before Christmas in both the
House and Senate. Members said
that, in view of the worsened mill
tary situation in Korea and in
creased international tension
threatening another world war,
the country must face realistically
huge new expenditures for defense.
Expenditures Will Increase.
The expenditures. they AIDED,
likely will increase and it will
be impossible to meet them on a
"pay-aS-you-go" basis.
With that attitude the House
and Senate prepared to plunge
tomorrow into consideration of
the excess profits tax legislation
and the supplemental defense ap-
preparation measure. as well as
other matters bearing on the
country's defense effort.
The House will begin debate
on the compromise $3.4 million
excess profits tax bill under a rule
calling for vote sometime
Tuesday.
The Senate Finance Committee
also scheduled an opening hearing
on the proposal for tomorrow
morning with Secretary of the
Treasury Snyder as the first wit
ness. Senator George said he
hopes the Senate will reach a vote
before Christmas on the tax bill.
Appropriations Work Rushed.
At the same time, the House
Appropriations Committee will
resume work on the new defense
appropriation bill. received only
Friday, for 300, 100000 for the
Defense Department and $l,050.-
100000 for the Atomic Energy
Commission to expand its weapon
program.
The Senate Appropriations
Committee is expected to swing in
to work on the same proposal later
this week. The additional funds
being sought would bring to $42
million the defense budget for the
fiscal year ending next June 80
and would provide for armed
strength of 2,771,121 in the Army,
Navy, Air Force and Marine
Corps.
Chairman Connally called a
Senate Foreign Relations Com
mittee meeting for tomorrow to
take up a presidential request for
a $38 million outlay to provide
food for drought-stricken Yugo-
slavia. Critics have attacked this
proposal and it may have some
rough shedding.
The excess profits tax bill being
taken up by the House is about
$500 million short of what Presi-
dent Truman requested. How
ever, Democratic members of the
House Ways and Means Com
mittee have said it was acceptable
to the Treasury Department.
Bill May Be Recommitted.
Republican members of the
Ways and Means Committee, who
have opposed the measure, said
they would move to recommit the
legislation to the committee for
further study with view toward
getting a bill they contend would
produce more revenue without
working hardships on business.
The Republicans, who have
argued for an increase in the
corporate tax rate rather than an
excess profits levy, conceded,
however, their move has little
chance of success.
THE situation in Korea and the
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