Evening star., 1951-04-04
To Bride the GoIIoper

~ Dtf0tC sHC S0uOHSs
Instead of the big deficit foreseen last Jan
uary surplus of about So billion is now ex-
pected in the Federal budget for the fiscal year
ending June 30. There is no reason, however, for
any singing or dancing in the streets. The i'm
provement-the shift from red ink to black Ink
lis merely temporary phenomenon. Still very
much needed is most of the heavy extra taxation
that the President called for in February.
Thus, as Secretary of the Treasury Snyder
has just told the House Ways and Means Com
mittee, the surplus outlook, though pleasant
enough will quickly fade away because the Gov
ernment's defense outlays have entered stage
where they will steadily outpace its present rate
of income. Hence, since "these growing expend-
itures will generate inflationary pressures which
an adequate tax policy can help to restrain" 1t
is imperative-as a matter of vital financial
preparedness-that Congress lose no time in
enacting legislation to raise at least SO billion
in additional revenues. That is the bare mini
mum required to put the Presidents $71-billion
budget on pay-as-we-go basis in the coming
fiscal year
In his February message, the President
recommended that Congress deal with the prob
lem in two separate stages: Cd BY acting i'm
mediatey on a bill to raise $40 billion, and (2)
by adopting-later on this year-another bill for
But Mr. Snyder has now informed the Ways and
Means Committee that the administration has
since come to believe that the second stage can
be safely postponed until next January-assum-
ing, of course, that international developments
IN the meantime do not force major change
in our rearmament program. What cannot be
put off, however, without gravely endangering
the fiscal health of the Nation, is the first stage
-"the proper financing of our steadily increas-
ing defense production"
AS advocated by the administration, the $40
billion now being sought would be raised prin-
cipally by sharp increases yielding an additional
So billion in seective excise taxes an additional
So billion in the normal corporate tax, and an
additional $36 billion in individual income
taxes. Several congressional and private experts
differ with the Truman-Snyder proposals in
certain details. And as Senator Byrd and others
insist, deep cuts in non-essential spending are
every bit as important as the raising of addi-
tional revenue. But there is virtually unanimous
agreement on the -as-we-go objective and
the need for something like $10-billion hike
in taxation.
This agreement is based on general aware
ness of the fact that the Federal debt-which in
1910 was only $40 billion-now totals more than
quarter of trillon dollars, and that if deficit
continues to pile on deficit, the load may even
tually grow heaVy enough to break the back OF
our national economy Moreover, in the words of
the Joint Congressional Committee on the Eco
nomic Report, we are even now threatened with
"galloping inflation"-an imitation that keeps
on gathering strength from such factors as full
employment high personal and corporate earn
ings, and strong buying demand by consumers
and businesses alike in a period when military
needs are cutting into the supply of civilian
goods
Many steps must be taken to help bride this
galloper, and one of the most important of them
is the higher taxation required for balanced
budget, and to siphon off excess purchasing
power. Congress must act accordingly The in
fation threat is too serious for dawdling The
effort to counter it, to preserve fiscal integ-
rity to maintain our internal economic strength
is different in kind but certainly not less i'm
portant and urgent than the effort to arm
against external aggression