Evening star., 1953-07-04
The Political Min
News Of Deficit Brings
New Economy Demand
Fight to Extend Profits, Tux
Is Almost as Good as Won
By Gould Lincoln

Is Almost as Good as Won
By Gould Lincoln
When the Federal Government
closed its books for the flscal year
1853 last Tuesday it showed q deficit
Of $9,389. .000, ,000-$3 billion more than
former President Truman estimated
last January. There is no cheer in
deficits. The huge deficit now de-
veloped for the last fiscal year, how.
ever, has demonstrated the wisdom
Of President Eisenhower when he re-
jected proposals for immediate tax
reduction. insisting that it was first
essential to have q balanced budget in
sight.
Republican congressional leaders
naturally are concerned over the def
cit. Their first consideration is to see
that during the next fiscal year-l954
"a far better record is made. They
contend-and with truth-that tie
g. O.P. administration did not in any
way contribute to the deficit; that
Government expenditures during the
fiscal year just closed were made in
accordance with Democratic appropria-
tion laws. They were not responsible
for the Truman estimate of revenues.
Indeed, they intend to investigate
closely to learn how and why the Tru-
man estimates of revenues were So
billion too high. They point out there
has been no business recession. On
the contrary. business has been good
and employment high, with wages
higher than ever.
Soldering Effect. .,>
The 1858 deficit is having q SOLDERING
effect on Capitol Hill. The demands
for economy are becoming stronger.
The advocates Of bigger appropriations
for the armed services, particularly
the Air Force, than those recommended
by President Eisenhower get no en-
couragement from the deficit figures.
II there was any doubt about the adj
ministration'S winning out in the fight
to retain the excess profits tax for the
next six months, it Is rapidly vanish-
ing, The Senate Is now expected to
support the Eisenhower defense pro-
gram, which President Eisenhower as
q military man has declared sufficient.
The Ways and Means Committee of
the House is expected to report out
an administration bill to retain the
excess profits tax, despite the op-
position OF Chairman Dan Reed, and
thus start the measure on its way to
enactment. Mr.. Reed insists. however,
that taxes have reached a point of
diminishing returns-and taxes must
be lowered.
From now on. the Republicans and
their administration will have charge
n h0 FHi -R
ment. They do not like debt, and 40
not hgure, as recent Democratic
President did Of the national debt, that
I'VE owe it to ourselves" They will
push for balanced budget and a re-
duction in taxes.
Review Is Likely.
They will have to review the whole
tax picture. The G. O.. p. has been able
to cut nightly Hnto the Truman
budget for 1854, looping something
between $40 billion and $13 billion of
the Truman estimates of appropria-
ton and authorization. It is believed
now that the big reduction made in
the appropriations for the armed
services, already voted by the House.
Will be sustained by the Senate. Chair
man Millikin of the Senate Finance
committee is by no means downhearted
over the financial outlook.
The administration plans have
called for an extension of the excess
profits tax until January /, and for
expiration Of the IL per cent across-the-
board tax on individual incomes on
the same date. The President asked.
TOO, Tor review of the regular corpora.
ton income tax. and the excise taxes.
IL is presumed that the IL per cent in.
crease on individual income rates will
be allowed to expire with the end of this
calendar year as now provided by law.
Certainly there will be tremendous
pressure to let it die. The administra-
ton has been on record in favor of
having it expire. With an election
coming up. the congressional elections
OF 1854, 1t would take q great deal
OF pressure and sound reasons to make
Congress extend that tax. The G. O.P.
leaders hope 1t will be unnecessary.
Much will depend on solution of the
war situation in Korea, on continuance
OF good business and high employment.
War. if it is extended, could throw all
calculations out of kilter. One thing
is certain, however. the Eisenhower adj
mlnlStration is dedicated to bringing
the budget into balance and the country
into a Sounder financial position. FL
nancial failure in this country would
be worth more to the Communists than
a victorious war.