Evening star., 1953-02-12
The Test on Tax Reduction

Tne ground swell OF taX-cutting sentiment
which appears to be gathering momentum in
the House Of Representatives is threatening
to become major test of the strength of
President Eisenhower's leadership on Capitol
Hill.
The showdown is emerging from clear
cut dilemma that is facing the new ad-
ministration. It is on the record, through
pronouncements by General Eisenhower and
other party spokesmen, as favoring balanced
budget, restriction of Government spending
and reduction of the tax load-an over
tapping of objectives which contain a built-in
conflict. The order in which the President
preferred to approach this overall problem was
indicated in his state-of-the-Unio message
when he said: "A balanced budget is an es-
Sential first measure. :. Reduction Of taxes will
be justified only as we show we can succeed
in bringing the budget under control. :. Until
we determine the extent to which expenditures
can be reduced, it would not be wise to reduce
our revenues"
Appropriation legislation, which this year
might include some control over annual spend
ing from both new and unexpended funds, was
given place In the 11-point legislative, pro-
gram discussed by the President and congress
Sional leaders at the White House last Monday
tax measure did not appear on this list
although Senate Majority Leader Taft said one
would be added later. Both Senator Taft and
Speaker Martin, however, indicated their
preference for reviewing the budget and de-
termining the reduction in expenditures before
attempting to cut taxes. The Senator even
suggested extension Of the corporate excess
profits tax, due to expire on June 80, to Decem-
Der ST. the date on which individual income
tax rates are now due to drop.
The House proposal, sponsored by Chairman
Reed Of the Ways and Means Committee but
attracting support from both parties, is to have
both tax easements come on June 3O Further
more, Mr.. Reed wants the House to act quickly
without waiting for the budget review or
action on appropriations and expenditures
Treasury Department officials are reported to
have promised at an informal dinner conference
with Republican committee members that they
would neither support nor oppose this point
OF view as far as committee action is concerned
There remains, however, the question of
whether the President, and his Treasury lieu
tenants, might take a stronger position in the
House as whole-the legislation might be
held up by the Rules Committee-or on the
Senate side
:. The heart Of the conflict as noted, is in
the timing and the order in which objectives
are to be sought Both factions" favor reduc-
tion of the tax burden as well as balancing the
budget. One of the claims of proponents Of
the Reed bill is that reduction of revenues in
itself would provide the best leverage for
cutting expenditures, another way of approach
ing the budget balancing. It would, however
require a more drastic trimming of budget
estimates and more severe controls upon
Government spending-not necessarily bad In
themselves but more difficult to accomplish
There is no reason to believe that Mr.. Reed
Lit I~IIA
challenge to the Eisenhower leadership for
reasons other than an honest difference of
opinion. Nevertheless, the issue does present
test, and its outcome may have a significant
bearing on the Presidents ability to- exercise
.~aderShip in the future.