Evening star., 1953-04-08
More Budget Troubles

current eSClmaCeS OF 0udgeC denclC q
half billion dollars higher than that projected
by former President Truman for the fiscal year
ending June 80 intensifies the money problems
now being suffered by the Eisenhower ad
ministration.
While MIR. Truman overeStimated the ex-
penditures in the present fiscal year by what
now looks like a half-billion dollars, the
troublesome error occurred in overestimating
tax revenues by approximately 81 billion. The
making Of such errors, if indeed they can
properly be called errors at all, is not unusual
In the forecasting of Government revenues and
expenditures The preparation of an annual
budget requires virtually full year and the
figures which Mr.. Truman presented to the
Congress last January were given their final
refinement in December, more than three
months ago and more than six months before
the end Of the present fiscal year Furthermore,
the more difdcult side of the ledger to figure
In advance is that dealing with revenues since
the bulk of Government income is reported and
received during the final fiscal quarter.
Actually Mr.. Truman allowed himself some
leeway on the expenditure side by pointing out
that disbursements have been rising during the
fiscal years 1852 and 1953-due primarily to the
long lead-time required in procurement of mill
tary equipment. 1t seems now that he over
estimated this accelerated pace of expenditures
but, more seriously for current budget balancing
efforts, he likewise overestimated the tax re-
turns. The revised revenue figures indicate
that the errors in this category were principally
In the area of corporate profits and the taxes
receivable from this source, both now appearing
to fall short Of the Truman expectations.
The Eisenhower administration already is
exercising some control over current expendi-
lures and is making a more determined effort
TO reduce expenditures in the next fiscal year.
There Is virtually nothing it can do, however,
to step up the revenues Of the current fiscal
year since most of such intake is based upon
profits, income and tax liability already fixed,
both for corporations and individuals.
There is, also the possibility that the errors
Of 1858 may be repeated in the Truman esti-
mates for the 1854 fiscal year-when he foresaw
q deficit of $9.9 billion as against $50 billion
for this year. This would mean an even greater
spread between income and expenditures. In
such case, the Eisenhower administration has
an even greater problem than previously
thought to bring the 1854 budget into balance.
II 30, 1t makes tax reductions in the near future
even more questionable increases the
urgency for cutting back on appropriations and
expenditures for the coming fiscal year.
The Committee for Economic Development,
q privately sponsored research organization,
takes a similar view, concluding in its most
, recent study that suff1cient cutback in fiscal
1854 expenditures to permit the scheduled tax
reductions is ian attainable goaI II defense
needs do not increase. It indorSes President
Eisenhower's philosophy, however, that 1T
would be unwise and unnecessary to make
decision about tax reductions until the results
Of the budget review now being conducted by
the administration are known"