Evening star., 1953-05-21
The Political Mill
The Political Mill
Delayed Tex Reduction
CunAid Administration
Prediction Relief Will =
Give Political Advantage
By Gould Lincoln

Give Political Advantage
By Gould Lincoln
II the Eisenhower administration.
with the efaid of Congress. makes good
q balanced budget and accompanying
tax reductions by July /, 1954-the be-
ginning Of fiscal year 1955-four months
before the congressional elections, the
politics of the situation should definitely
favor the Republicans. President Eisen.
hover. in his address to the Nation.
made no specific promises. His address.
however. showed how these ends may
be accomplished. And very definite
was promise that the administration
would bend every effort to bring about
both balanced budget and tax cuts.
The failure of the President to recon-
mend immediate tax reductions or to
promise an earlier balanced budget Is
disappointing to many Republicans
some Of them in House and Senate who
come up for reelection next year. At
the same time, Democrats are chortling.
The latter comment that the Republic
cans are falling down on campaign
pledges and that the voters will flock
away from the G. o. p. in next years
elections. This is an immediate reac-
ton. But if the budget is balanced
and tax cuts come in the session Of
Congress that begins January 8, 1854,
the last chortle is likely to be with
the Republicans.
Defense Is Reason.
The impelling reason given by Presi-
dent Eisenhower for the continuation
of the present high taxes on individuals
and business is national defense. The
Chief Executive sees no reason to be-
lieve, up to this moment, that Soviet
Russia has abandoned its announced
purpose, "the destruction of freedom
everywhere" Because of the inter-
national situation, huge expenditures
must be made for military purposes.
This. the President believes, the Ameri-
can people will understand. Even If the
fighting is concluded in Korea. these.
expenditures must continue. There will
be no assurance fighting will not break
out in other parts Of Asia. Europe or
the Middle East.
President Eisenhower. ever since he
entered the White House, has en-
phasized the need of balancing the
budget, to prevent further imitation
and further devaluation of the dollar
and finally disastrous imitation.
He is still sticking to this procedure,
and he will have the support of most
of the Republicans and many of the
Democrats From 1917 until 1853.
SO years-the Federal budget has been
in balance IA years. It has been un-
balanced-with the Treasury in the
red-24 years. A Republican admin
istration sat in Washington II Of the
years the budget was in balance, and
a Republican Congress was responsible
for two of the years in which the budget
was balanced. In only one year. 1947.
was Democratic administration in
control with a balanced budget. Re-
publican administrations controlled in
only three of the unbalanced budget
years. War and depression knocked
the Federal budget out of balance. TIE
wars have been fought with the Deo?c-
Gratis in control of the Government.
The, depression struck during Re-
publican administration. The national
debt-brought about by excess SPEND
ing over revenueS-haS risen to nearly
$265 billion. The American people are
paying taxes so high that earlier gen.
erations would have considered them
impossible. The value of the dollar
has been deprecated many times. "a. :.
..~. One Promise Kept.
One promise the Republicans made
during the 1852 campaign-to cut gov
ernmental expenditures-the admins.
tration and Congress are keeping. The
Truman budget for the fiscal year 1854
is being reduced by approximately $8.5
billion, and the reductions may go
still further These reductions in SPEND
ing will make the prospective deficit
for 1854 lower than estimated by Presi-
dent Truman. The factor which is
making it impossible to balance the
budget for 1854 is the $80-billion
hangover of unexpended appropriations
and authorizations, which have been
almost entirely allocated and con-
tracted for, coming over from the Tru-
man administration.
President Eisenhower, in his recon-
mendations for continuation Of tho
present high taxes. has taken the cou-
rageous way. Had he yielded to the
pleas for immediate tax reduction.
popular acclaim might have followed.
But he would almost certainly
have brought the budget more out Of
balance with larger deficits. It is
argued by some that the reduction OF
taxes would have increased incentives
and put spending money in the pockets
of millions and SO increased the reve-
nues. That, however. is speculation.
The Eisenhower leadership is now
at stake in big way. The President
has asked for legislation continuing the
excess-profits tax, due to expire June
80. Strong and bitter opposition to
this tax extension has developed inn
mediately. However. the Republican
leaders in both houses Of Congress have
rallied to the Presidents support. He
can count. too. on some Democratic
support. Much will depend upon the
reaction of the people to the Presidents
program. His popularity throughout
the country, which gave him election
by huge majority last November. has
continued, the polls show-and even
increased. If the public rallies to him,
Congress win go along.