Evening star., 1953-04-07
Economists Declare
Balanced Budget and
Tax Cut Are Possible
By Froncis P. DouqIos


Government spending can be
reduced enough to balance the
budget and to permit tax cuts
too, the Committee for Economic
Development said today.
The organization said it is
confident spending can be
trimmed by $4,4 billion so as to
bring the fiscal 1854 budget into
balance if present taxes are re-
tanned. It made this statement
with the proviso that the inter-
national situation would not take
a turn for the worse.
The CED is not so confident.
however, that spending can be
reduced enough to balance the
budget if revenue is also re-
duced by all the tax reductions
already scheduled. But the goal
could be reached. the group feels.
If some of these scheduled re-
ductions. notably the excess
profits tax, are made. The or
ganiZation said this goal is also
attainable if defense spending
does not have to be increased
and if the problem of cutting
expenditures is tackled with
maximum vigor."
Bridges Sees Eisenhower.
The peace" economy drive got
added support today from Re
publican Senators Bridges of
New Hampshire and Dirksen of
Illinois. Senator Bridges, chair
man of the Senate Appropria-
tions Committee, breakfasted
with President Eisenhower at the
White House, and reported later
that Federal spending "can be
cut all along the line-including
defense-without impairing eff !
cheney or national security"
Senator DirkSen, predicting
that Korean truce could bring
a substantial reduction in arms |
spending, said that, We're go
ing to be in a fix if we don't !
balance the budget, and we can't |
do it without cutting military
spending"
Burden on Defense.
Most of the spending trim can,
and must. come out of the De-
ferse Department budget, the
CED said. 1t pointed out that |
so per cent of total budgeted ex-
penditures for fiscal 1854 is for |
Defense programs, and added:
Numerous studies have shown
that increased efficiency could
yield great savings in the defense
program"
The scheduled tax reductions
which the committee mentioned
are these: The excess profits
tax, due to expire June 80; the
increase of about 10 per cent
in individual income taxes, eX-
piring next December 81; the
increase of about 10 per cent in |
corporation income taxes and |
the increase in various excise |
taxes, both due to expire next |
April /.
It is estimated that if these |
taxes are permitted to expire |
revenue would be reduced by |
$2.2 billion in 1854 and So bill |
lion in fiscal 1855.
Some of the tax reductions
should be postponed if a deficit !
would result, the CED warned. |
1t asserted: 1--WE should adhere |
to the principle that the budget |
should be balanced in times of |
prosperity"
Excess Profits Tax Hit.
The committee said that in
any tax REDUCTION first priority
should go to elimination of the
excess profits tax. It called this
tax a tax on growth, on efhci-
ency, on initiative, or risk taking
and on small business. It said
this tax and other high taxes
are harmful to the dynamic
qualities in the economy.
The committees computations
are made on the basis of the
$81.8 billion budget for fiscal
1854 which was submitted to
Congress last January by Presi-
dent Truman. The reduction
proposals by the Eisenhower ad-
ministration are not yet COM
plete and are not taken into
account.