Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-05-22

Rowland Hughes, budget direc-
tor, that a small surplus might
be achieved by June 80, 1856, but
only by careful control over ex-
penditures.
Mr.. Eisenhower recalled his
1853 campaign speech at Peoria
stating his goal as elimination of
the Federal deficit within four
years. He considered this a COM
mitment. He told the cabinet,
however, that balancing the
budget must not take priority
over national security or essen
tial government programs. If a
tax cut was proposed in 1856 at
The expense Of a balanced budget,
he would fight it. He hoped that
even a small surplus could be
realized to apply against the
national debt. He would like to
see tax cut. particularly for
theses with low incomes, he said,
but so long as he was President
there was not going to be one at
The expense Of a balanced budget.
Humphrey for Tax Cut
Secretary of the Treasury
Humphrey then stepped into the
discussion with view on taxes
that differed from the Presi-
dents. His thought was that in
creased economic activity held
the key to budget surplus, and
he believed that the stimulus
Of a tax cut would be necessary
to achieve this.
When the cabinet met on
August 5, 1855. after Eisen-
hower's return from the Geneva
heads-of-stat conference, fiscal
policy was not on the agenda
But the President brought it up
at the outset. Now the admins
tration was so close to a balanced
budget, he said, there should be
concerted effort to reach the
goal. Then he took out a written
statement and read it to the
cabinet. Following are excerpts
from 1t:
When this administration
was inaugurated. it was faced
with a planned deficit of 500
billions. We have cut that de-
felt by more than half. At
the same time we have abb
sorbed a $7.5 billion tax cut.
That is excellent progress.
Still Short of Goal
But we still haven't reached
our goal. even in this year Of
unparalleled prosperity. A de-
felt of Sis to SIT billion is
still likely for this fiscal year.
This amounts to only per
cent Of the Federal spending
planned for this year.
THAT per cent stands as
a challenge to every one of us.
Surely in this giant govern
ment there are still programs,
administrative costs or waste
full practices of one sort or an
other that We can root out
without damage to anything
truly essential
Il am directing the budget
director to deduct 3 per cent
of the expenditures planned
for this year. l am confident
that with determined effort
throughout our government we
will save at least this amount.
IF anyone finds, after earn
est application that cut of
this size is an impossibility, he
is to come to me as soon as
such imposslbility becomes APP
parent :"
Wilson Points to Difficulties
In the discussion that fol-
lowed, Mr.. Eisenhower made it
plain that this was in the nature
OF a spur to get the departments
to cut out waste and noneSsen-
tials rather than a hard-and-
fast order. Defense Secretary
Wilson pointed out the difficult
ties Of trimming the defense
budget.
The President replied that in
part 1t was defense spending
that made the country secure
and brought such peace as there
was. Secretary OF State Dulles
concurred, In spite OF the cor
diality at the Big Four Geneva
conference. Mr.. Dulles said, no
real concessions came from the
Soviet Union, Peace was not
assured. II the smiles and hand