Evening star., 1955-01-18
Closer to q BUDGET Goal

lI0ser 20 q bud0ef 5o0I
President Eisenhower has submitted to
the Congress 1856 Federal budget that
foresees fifth consecutive year Of deficit
financing However, the projected deficit
of $24 billion, If that proves to be the correct
figure, would be the smallest shortage in
that fiye-year period, and the President
concluded his message of transmittal on a
hopeful note. "A growing prosperity" he
said, will result in increasing revenues and
should make possible both q balanced budg-
ct and lower tax rates in the near future"
The extent to which the administration
Is counting on this growing prosperity" was
indicated by Secretary Of Treasury HUM
phrey in discussing the bases for estimat-
ing 1856 receipts at $50 billion. up 81 billion
from currentI955 estimates. On a calendar
year basis, the Treasury head estimated
total personal income at $2866 billion in
1854 and at .$298.5 billion in 1955-ar in-
crease of about per cent. At these levels,
individual income taxes would yield $30.7
billion for the current fiscal year and $325
billion in fiscal 1856. Comparably, corpora
ton profits were estimated at about $36
billion in 1854 and at $385 billion In 1856
an increase of more than per cent. The
corporation income tax yield will amount
to about $18.5 billion this year but Is ex-
pected to drop because Of an allowed
change in the timing Of payments--to about
SIT billion in 1856. But by what he de-
scribed as an, optimistic but realistic guess,
Mr.. Humphrey said the Treasury expects
the above rates of increasing economic good
health to continue into 1856.
This 1856 budget reflects other risks.
however, than that Of attempting to foresee
the level of national economy 18 months in
advance. One Is an unusual, even II justin
able, gamble that expenditures by the De-
partment Of Defense may be reduced from
$3575 billion-tte total reached by adding
all the proposed prograns-to $34 billion.
In estimating overall budget expenditures
at $62.4 billion, the President used the lower
Defense Department figure Of $34 billion
with an explanation that Secretary Wilson
believes he will be able to effect the neces-
sary SITS billion In savings when the time
comes. About two-thirds of the projected
Defense Department expenditures, incident
ally, twill be devoted to air power and re-
lated programS-both offensive and defen-
Sive," described as the largest expenditures
in these categories In our peacetime history.
And for emajor national security" programs
Defense Department needs plus develop
ment of atomic energy, stockpiling and
military aid abrnad-prop expenditures
total $40.5 billion, 65 per cent Of the budget
sum. An additional $13 billion was allotted
to international AFFAIRS" including eco
noric aid abroad. No breakdown on an
aid-to-Asis program, either military or eco-
nonic, was given.
Another Of the risk elements involved
in the estimates applies to the tax problem.
Revenue estimates are based on keeping the
corporate income tax rate at 50 per cent
and on maintaining present excise tax rates.
Both are due to- drop on April and legis-
lation will be necessary to prevent this.
About So billion In revenue is involved In
the first and about 81 billion In the excise,
category.
Despite questions and doubts which may
be raised about this budget picture, It also
has its encouraging aspects Estimated ex-
penditures continue their downward trend
of the past two fiscal years and the ex-
pected deficit is smaller than for fiscal 1854
or 1855. The consolidated cash estimate
for 1956-including trust fund receipts and
expenditures shows surplus of $3.50 mill
lion. Infiationary pressures are corresponds
ingly decreased by these trends. Hope is
expressed for further tax reductions next
year, even though an exact balancing of the
budget may not be attainable that soon.
AS the President said, the adjustment from
war to peace has been made without se-f
rious economic disturbances" and the new
budget offers promise Of continuing fiscal
stability.