Evening star. [volume] (Washington, D.C.) 1854-1972, 1959-09-25
BUDGET
BUDGET
| Federal Money Pinch Is On;
BudgetB oIonceM orginSIim
CONTINUED Prom First PAGE

ASContinued From First Page
sists. the Government must re-
duce its debt.
The Federal debt will total
S2e4.7 billion next June 30. the
same as a year earlier, accord
Inn to the Budget Bureau.
Psychological Political Effect
"A surplus Of only sos million
may have little economic effect.
But the Administrations pol
icy makers maintain a budget
In. the black would benefit the
economy at least psychological
ly. They assert balancing the
budget would help dissipate
fear Of imitation and would
bolster confidence In the sound
ness of the dollar.
In addition, economic policy
has become O major political
issue. Congress and the Presi-
dent have been feuding over
spending and other phases Of
the fight against imitation. Re-
publicans and Democrats are
claiming credit for holding
down expenditures.
Explaining the increased
estimate of Federal revenues,
Mr.. STAINS said economic re-
covery and expansion have
been greater than was ex-
pected."
Corporation Profits Rise
Corporation profits now are
expected to total Sass billion
during calendar 1859. up from
the January estimate Of SAT
billion. These higher profits are
expected to produce $22.5 bill
lion in taxes this fiscal year.
or nearly $1.1 billion more than
anticipated in January. Cor
poration taxes declined to $17.3
billion last fiscal year because
Of the recession.
Personal income now Is ex-
pected to total 1882 billion in
calendar 1859. up from the
January estimate Of $374 bill
lion. Individual income taxes
are estimated at SAL billion. up
$500 million from the original
forecast. The recession de-
pressed individual income taxes
to $36.7 billion last year.
Gross national product. an
overall measure of the econ
omy, now is estimated at $484
billion in calendar 1859, up from
the January estimate Of about
$470 billion. GIMP is the total
value Of all goods and services
produced.
Spending increases above the
January estimates will cancel
out most Of the revenue boost,
Mr.. STAINS said.
50 Billion Interest on Debt
The biggest increase in
spending is a rise of 81 bill
lion. to q total Of SO billion. in
interest payments on the Fed
eral debt. Interest rates have
been rising rapidly for the
Government and for private
borrowers.
Critics of the administration
blame tight money" policies.
The administration retorts that
the price of credit must rise
when the supply of money Is
inadequate 70 meet excessive
demands. Any efforts to low
er interest rates by expanding
the money supply excessively,
according to this argument.
would be inflationary.
Congress this year refused
to lift the AZ per cent interest
ceiling on long-term Govern
ment bonds. President Eisen-
hover intends to renew his de-
mand for removal of the CELL
ing next year. The ceiling bars
sale Of long.term bonds be-
cause market rates are above
~ per cent.
Agencies Spend More
The Post ONCE Departments
spending now is estimated at
1904 million. or $495 million
higher than the January FORE
cast. Congress refused to raise
postal rates by $3.50 million as
recommended by the President,
accounting for most of the in
creases In the Post Office's net
spending.
Other major increases above
January spending estimates in
clude $245 million for the De-
partment Of Health, Education
and Welfare for medical re-
search and other programs: