Evening star., 1951-10-14
Renegotiation
|0f Contracts 10
Reduce Deficit
Moy Produce Billion;
Congress Presses to
Adjourn Saturday
By J. A. O'LeoY

Chairman George of the Senate
Finance Committee said yesterday
he thinks the Government may
pick up about 81 billion from re-
negotiation of defense contracts
to augment the $5.8 billion tax in
crease scheduled for final ap-
proval in Congress this week.
Meanwhile. Congressional lead
ers still were figuring on winding
up the session by next Saturday
if they can get the tax measure
and four remaining major appro-
,priation bills through.
Senate Majority Leader McFar-
land told reporters that once these
must" bills have been completed,
it will be difficult, if not impos-
sible, to keep a quorum here for
less urgent matters.
18 Tied Up in Conference.
There is a lot of work remain
ing to be DONE" the Senate leader
said, but the general sentiment
both in the Senate and the House
is to get out. Once members Of
Congress decide they want to get
through, we move awfully fast"
The only must" bills on his
list, Senator Mcfarland said, are
the Senate-House compromise on
the tax bill, and appropriations.
Aides TO Senator Mcfarland
told him that 18 bills now are
tied up in Senate House confer
ences. appointed to iron out diff
ferences.
He said he was anxious to see
some of them passed before Con-
gress quits, especially bills rais-
ing postal rates and providing
pay increases for Government
workers.
But Senator Mcfarland said
they would have to clear prompt
ly or would not be passed this
session. However. such measures
would not be dead. The second
session Of the 82d Congress, meet
ing in January, could take them
up where the first session left OF.
In Session 10 Months.
Senator McFarland's statement
indicated that President Truman's
requests for revision Of the Price
Control Act probably would be
put over until next year.
Congress has been in session
for nearly 10 months. If it quits
next week. it will be back on
January 3.
Senator George pointed out
that renegotiation of contracts,
under a law passed last spring.
will begin to function next month,
when corporations file excess prof.
its returns on which Congress
granted an extension Of time in
September.
He said that, while renegotiation
would cut down somewhat profits.
that otherwise would be taxable.
he believes it may produce for
the Treasury a net yield Of another
81 billion, based on the experience
in World War II. The exact
amount will depend on how closely
the contracts have been figured.
he said. The Senator also pointed
out that the renegotiation law
requires most Of the proceeds to
Igo back into the Treasury. where
as in World War II a greater part
Of the recovered money went into
revolving funds for further use
by the departments.
Would Decrease Deficit.
Even another 81 billion will not
balance the current budget. but
will lower the probable June 30
deficit. Not counting renegotia-
tion, experts have figured the Gov
lernment in this fiscal year will
spend between 1884 and $40 bill
lion, as against revenue collec-
tions of about $64 billion.
-Four Of the five members Of a
new Contract Renegotiation Board
were appointed recently, and con-
firmed by the Senate on October /.
The conferees on the tax bill will
meet tomorrow morning to take a
final look at the text of their
agreement, raising tax rates on in
divlduals and corporations. The
meeting is only to check the legal
phraseology Of the bill, however.
and no changes in substance are
expected.
Both houses are scheduled to
(See CONGRESS. Page A-50