Evening star., 1953-08-30
We Have Good News

In the light of the Budget Bureaus current
conclusion that the Federal Government has
reached "the essential turning point toward
balanced budget" Secretary of the Treasury
Humphrey was indeed justified in opening his
Thursday press conference with the announce
ment that I'VE have good news today" For, If
it can be accomplished without endangering the
national security or seriously curtailing essen
tial Government activities, the achievement of
a balanced budget would have broad and deep
value to the national economy. An end to
deficit spending would remove the greatest
force for imitation. A control of expenditures,
within the limits of safety and to point where
they would be in balance with revenues, would
offer promise within the foreseeable future of
net reduction in the record tax load that has
been burdening individuals and business alike
The Budget Bureau has arrived at its en-
couraging conclusion by two steps. One is that
latest estimates of expenditures in the fiscal
year ending next June 80 have been reduced,
primarily because of the end of the shooting in
Korea and through application of various
economies, from $786 billion to $721 billion
Concurrently estimates of revenues have been
shaded from $6S7 billion to $6S.3 billion leaving
a deficit margin of only $3.8 billion as against
the $9.9 billion calculated last January and
the $5.8 billion foreseen three months ago.
With this improvement forecast for this fiscal
year, the bureau estimates that new obliga-
tional authority for the current year will be
down to 1882 billion lower than either ex-
penditures or receipts and promising down.
ward trend in disbursements in the years
Immediately ahead 1t is this relationship
between obligational authority and the projec
tion of expenditures and receipts which the
bureau interprets as 'the essential turning
point toward balanced budget" That it has
been achieved is, quite reasonably, being cited
by administration Spokesmen as a measure of
how determined "team work" toward the OBJ
jective of effecting economies can produce
results.
In making his own good news" comment
on these findings, Secretary Humphrey ex-
pressed appropriate caution. Estimates of fiscal
1854 receipts are based on existing tax laws and
allow for losses resulting from reduction of in
dividual income tax rates and expiration of the
excess profits tax on December 81 and the
reduction of certain excise taxes next March
81. The total estimated loss during the re-
mainder of this current fiscal year is $22 billion
but September Is quarterly tax collection
deadline may force a revision of the revenue
figures.
The more serious problem, as far as re-
year 1855 when the tax reliefs listed above and
a scheduled reduction of S per cent in the
regular corporate tax rate are estimated as
costing So billion in annual revenue. 1t is
largely to overcome this loss that the Treasury
Department and the House Ways and Means
Committee are studying new possibilities for
raising revenue.
Mr.. Humphrey also stressed that, despite
efforts to economic, world developments or
even unforeseen domestic spending demands
might reverse the downward trend in expendi-
lures or even cause additional losses in revenue
Meanwhile, the problem of the debt ceiling
and the head room" it leaves for current op-
erationS continues to be of at least Short-term
concern. The public debt stands today at
approximately $272.5 billion with the limit now
fixed at $275 billion. The estimate of a $38-
billion deficit for this year would leave the debt
still below the present ceiling, but interim re-
quirements, and the possibility that the Sep
tember IS collections might fall short of
expectations, leave relatively small margin for
An administration request that
the ceiling be raised to $500 billion was rejected
by the Senate this summer but the September
returns may tell whether President Eisenhower
will ask Congress to return in special session
this fall to reconsider the matter. Later events
may determine whether the problem will still be
a pressing one after the turn of the year.
In accepting this latest overall analysis
as good news" the accompanying reservations
must not be overlooked. The job of balancing
the budget and setting the Federal fiscal house
firmly in order has not been completed The
efforts by Congress and the executive branch
in the past six months, however, have begun
to show concrete result. 1t represents genuine
toward solving the number one do
meStic problem.