Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-03-29
The Political Mill
The Political Mill
Failure of $40 Tax Slash
Is Eisenhower Victory
Now He Must Do Bottle
To Keep Down FederoI Pay
BY GOULD LINCOLN

President Eisenhower has scored
another victory in his effort to keep
the country's finances on an even keel.
The $40 tax slash in individual income
taxes, proposed and passed by the House
Democrats, is dead. At the same time.
the corporation and excise taxes which
were slated to die April / are being
extended. as recommended by the
President. The $40 income tax cuts
were contained in an amendment to
the bill giving new life to the corpora
ton and excise taxes. Chairman Harry
Flood Byrd of the Senate Finance
Committee came strongly to the aid
of the President in this fight over taxes
and so did Senator George Of Geor-
gia They carried with them enough
Democrats to strike the $40 income
tax cut-or any modified version-from
the tax bill when it was before the
Senate, and to force an agreement by
the House confereeS.
The $40 income tax cuts were rec
ognized from the start as political
move on the part of the Democrats
of the House. 1t is no secret the Dem
ocrats hope to gain with the voters
next year, even though they failed to
write the cuts into law. Their move
was made at this time to get in the
first lick at tax reduction. with the ex-
pectation that the Eisenhower admin
istration will propose some tax reduc-
ton when Congress meets again next
January.
Democrats Agree
Mr.. Eisenhower called the move on
the part of the Democrats "irrespon-
sible" in the extreme-and enough
Democrats in the Senate agreed with
him to make possible it's immediate
defeat. Had the $40 tax cuts been
finally included in the bill extending
the corporation and excise taxes. the
President could still have vetoed the
measure, and the result might have
been the same. For it is not conceivable
that the Democrats would have voted
down a new bill to extend the life Of
the corporation and excise taxes. That.
indeed, would have been responsibility
in the nth degree.
The President is engaged in another
contest in the interest of economy and
against increased expenditures by the
Federal Government. He is trying to
keep the pay increases proposed for
postal workers and for civil service en-
ployes down to the 7.6 per cent and 6
per cent, respectively, he was willing to
accept. The Senate has put the in
creaseS up to 10 per cent. Having
given themselves increases Of SO per
cent in their own pay checks. Senators
and Representatives have had tough
time turning a deaf ear to the organized
postal and civil service employees. The
Presidents only remaining weapon in
this fight, should the House go along
with the Senate is his veto-Which he
is expected to use If he does Repub-
lican leaders believe they will be able to
line up enough Republicans, and some
Democrats, to sustain the veto. In
that event, pay bills will be reintro-
duced SO as to give the postal service
and the civil service increases along the
line the President has agreed to. Mr..
Eisenhower has pointed out that since
1916 salaries of postal clerks and car
riers have been raised from $1,700 to
$4,000 90 per cent Unreasonable
for some of the top grades "a per cent
increase has been granted. For these
reasons he has been opposed to the 10
per cent increases now demanded. His
arguments in regard to the civil serv-
ice increases run along similar lines.
Also, the President is convinced that his
plan for civil service people and postal
people has been carefully worked out
and along just lines.
Major Problem
With a national political campaign
coming up. this matter of conserving
Government finances becomes a major
problem. Too many politicians hope to
win votes by cutting taxes on the one
hand, and by increasing salaries and
wages, and general spending, on the
other. Mr. Eisenhower has insisted
since he first took Office that Govern
ment expenditures must be curtailed,
and that tax cuts, while greatly desir-
able, must be made only when they do
not threaten the Governments fiscal
situation He successfully fought off
Republican demands on him when he
first took Office. for tax cuts in individ-
ual incomes His aim has been towards
a balanced budget. With deficits still
threatening for this fiscal year and for
the fiscal year 1856, he does not intend
to be driven from these goals of fiscal
responsibility. He will have the backing
of Secretary of the Treasury Humphrey
in such stand. Indeed, Mr. Humphrey
is convinced the President will not pro-
pose a tax decrease next year unless
conditions warrant tho matter how
strong the pressure from Republican
politicians may be.
Much will depend on what Con-
gress does about appropriations at this
session. The House, so far, has made
a good record of keeping below budget
estimates in the half dozen appropria-
ton bills it has handled