Evening star., 1955-02-14
1856 Deficit
Cut Attributed
ToAccountinq
Actual Cost $9.3
Billion More Than
Shown, Group Says
By Froncis P. DouqIos

py rtonCtS r. Dou9ioS
The actual cost of Govern
ment would be shown to be $9.3
billion higher for a six-year
period had not changes in Gov
ernment accounting and in
collections of corporation taxes
reduced the reported deficit"
This is the contention of q
report on the budget. applying
to fiscal years 1951-1956. pub
lished today by the National
Planning Association.
The report was drawn up by
Sidney G. Tickton, who served
in the Treasury from 1884 to
1853 and is now associated with
the Seventh Co., Inc, of New
York. The NPA is a nonpolitical
organization of agriculture, busi-
ness. labor and the professions.
According to the NPA report,
the Governments deficit for
1876 would have been $29.2
billion instead of $l9.9 billion
had not certain budget changes
been made. The $19,9 billion
figure is the total of the reported
deficit for fiscal 1951-'54 and the
forecasts for 1855 and 1856.
Change in Tax Payments.
The changes include the
changes in treatment, form and
method of reporting expendi-
lures" and the shift in the pay
ment of corporation taxes from
four equal quarterly payments
to payment of the bulk of the
taxes in the first half of the
calendar year.
Mr.. Tickton made another
analysis of the Governments
accounts on a consolidated cash
basis. The Government has
figured a net overall cash sur
plus of $400 million for the
195l-'56 fiscal years, including a
cash surplus this year of $558
million. Instead of surplus,
however, Mr.. Tickton insisted
that the six-year period should
show a deficit of $7.6 billion.
The changes referred to were
made by Congress-, the President.
the Budget director and ether
officials. and there was proper
authority" for them. according
to Mr. Tickton.
But. he said, the resulting dis
tortion of budget figures may be
large enough to influence de-
termination whether taxes should
be raised or lowered.
Spending Totals Cut.
The accounting changes have
reduced totals for expenditures
in the administrative budget in
the six years by $2.5 billion.
without reducing actual Govern
nent costs, according to the re-
port. In addition, the report
contended accounting totals Of
receipts have been increased by
$6.8 billion without changing the
liabilities of taxpayers.
This last is laid to the Rev.
enue Act of 1850. which speeded
up the collection of corporate
income taxes in each of the five
succeeding years. The result is
that this year the point was
reached at which corporations
taxes became payable in the first
six months instead of IL months
after the close of the corpora
tions' accounting years.
This shift toward larger pay
ments in the March and June
quarters meant a shift toward
payments in an earlier fiscal
year than formerly, making
larger payments than otherwise
in the Governments fiscal years
1876.
On the expenditures side, Mr..
Tickton called attention to the
handling of certain Government
loans outside the budget This
involves loans by the Commod-
ity Credit Corp, the old loans
of the reconstruction Finance
Corp. and the future purchase
OF home loans by the Federal
National Mortgage Association.
Effect Is the Same.
Mr.. Tickton said the met ef-
feet in each case has, been the
same-private money has been
borrowed to finance directly
certain loans which have been
or will be made by separate
Government agencies, thereby
reducing the amount of. money
reported to be required by the
Treasury itself" He listed these
results:
/. A shift of SIS billion Of
CCC expenditures from fiscal
1854 to fiscal 1865.
2. A reduction of SAT million
in RFC expenditures in the fis-
cal 1854 budget instead of re-
ductions in subsequent years
when loan repayments would
have been made.
8. Exclusion from the budget
of FNMA expenditures of 500
million for fiscal 1855 and SIS
million for fiscal 1856.
Mr., Tickton also estimates
that the Atomic Energy Com
mission budget would have had
to include 5000 million for
power plants over the six-year
period had it not arranged for
the construction of plants
through contracts guaranteeing
purchase of power.
Likewise. he found that $75
million more would have had
to be budgeted for Post Office
and other buildings in 1855 and
1856 had not the lease se-purchase
plan resulted in postponement Of
payments.
Mr.. TIckton also found other
changes which would reduce the
expenditures total.
Recreation Group TO Meet