Evening star., 1961-01-16
BUDGET
Smo|| Deficit Held Likely

Om0II L
Continued From First Pag,
optimistic about, the economy
and thus about the tax take.
On the spending side Of the
ledger, Mr.. Kennedy's advisers
propose to increase spending
for anti-recession programs
president Eisenhower, expect
ling an early economic upturn
opposes extra Federal spending
to prime the pump.
! Beyond the argument over
combating q recession, the Pres.
ident-elect intends to redeem
campaign pledges by increasing
spending above Mr.. Eisehhow'
er's estimates in such fields a'
housing and aid to education.
Although the President-elect
has more ambitious spending
plans than the Eisenhower ad-
ministration, he has indicated
that he viii exercise restraint
in an effort to keep the budgeI
deficit small. Mr.. Kennedy has
said he opposes deficits except
in periods Of national emer-
gency or high unemployment
He also has expressed con-
cern about erosion of conf
dence in the dollar when the
Government habitually runs
deficits. Confidence in the
dollar. he has said, is essential
to reducing the deficit in the
United States balance of pay
ments and slowing down the
loss Of gold from Government
stocks. .-.
Rely on Congress
President Eisenhower's bud
get estimates rely heavily on
congressional action in several
controversial fields.
He proposed in today's bud
get that Congress raise postal
rates effective next April /, to
yield an extra $3.50 million in
fiscal 1861 and $843 million
in fiscal 1862. Congress last
year refused to approve q
smaller postal rate increase,
and there Is no evidence Of q
change in sentiment on the
Hill.
Even If all other estimate.
in the budget are accurate, re.
lection of the postal rate in.
crease would result in a deficit
for fiscal 1861 and would cal
away more than half the
planned surplus for fiscal 1862
Prospects also are dim fol
Mr.. Eisenhower's proposals tc
increase the gasoline tax from
4 cents to AZ cents q gallon
instead Of letting it drop to
cents next July / as scheduled
and to keep automobile excise
taxes in the general budget
fund instead Of diverting them
to the highway trust fund. II
Congress rejects these pro.
posals, budget revenues will be
1910 million less than esti-
mated for fiscal 1862.
Mr.. Eisenhower also reite-
rated last years call for Con-
gress to impose an extra $100
million of taxes on aviation
gasoline and jet fuel.
Judging from past expert
ence, Congress will grant the
Presidents annual request to
extend temporary" corpora
ton tax rates and excise taxes,
instead Of allowing these levies
to decline or expire next July
/. The extensions would yield
$2.6 billion Of revenue in fiscal
1862.
Major spending increases
estimated for fiscal 1862 above
1861 levels include $1.4 bill
lion, to a new total Of $42.9
billion, for military functions
of the Defense Department;
$193 million, to $3.8 billion,
for veterans compensation and
pensions; $195 million, to $965
million, for space programs;
$184 million, to $728 million,
for the Housing and Home FL
nance Agency; $50 million, to
$425 million. for the Develop
ment Loan Fund.
Aside from the proposal tc
reduce spending for the postal
deficit, the main spending de.
crease between fiscal 1861 and
1862 is a $400 million cut. down
to $8.6 billion, for interest or
the public debt. Interest rates
generally have declined.
The budget provides for ap.
preparations and other new oh.
ligational authority-as distin-
guished from expenditures-oi
$500 billion in fiscal 1852, down
from 1921 billion this year. The
Government each year spends
money obligated during the
current and previous years.
Missed the Mark
President Eisenhower's budg.
ct for fiscal 1861, as submitted
to Congress last January, was
far wide of the mark. He pre-
dicted a surplus Of $40 billion
The margin Of revenues over
expenditures has melted down
to an estimated $79 million be-
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