Evening star., 1961-10-08
u. 5. Deficit
Seen Close
10 ST Billion
BY LEE M. COIN
star staff Writer

VIII exceed So Dillon this f1S-
cal year, informed sources said
yesterday. Although estimates
have not been completed, there
are indicationes it will ap-
proach Z billion-up from s3.9
billion last fiscal year.
Such a deficit would 60 well
over President Kennedy's latest
official estimate Of $5.3 bill
lion. 1t also would exceed re-
cent public forecasts by Treas
ury Secretary Dillon, who put
the outside limit at $6 billion.
News of the rising deficit
is certain to aggravate fears Of
initiation, and revive conserva-
tive criticism of the admins
tration's spending policies.
Revised budget estimates are
tentatively scheduled for pub
lication by the Budget Bureau
late this month. They will
cover the current fiscal year
fiscal 1862. the year ending
next June 80.
Up-Date Estimates
These revisions will up-date
the bureaus estimates OF July
rs, which incorporated the
Presidents proposals tor a de-
tense buildup. The July esti-
mates figured on Federal ex-
penditures of $87.7 billion and
revenues of 1924 billion, for a
deficit of $5.3 billion.
The revenue estimates still
look about right, but spending
forecasts have been raised.
congress failed to raise postal
rates by about $500 million, as
the President had urged. The
postal deficit counts in the
budget as a net expenditure.
Defeat of the administrators
, broad aid-to-education bill and
several other measures recouped
!. only a relatively small part Of
the money lost on the postal
issue.
Defense Costs Rise
: Defense spending nov is ex-
pected to exceed the latest Of
fetal figure of $46.5 billion,
which included $3.6 billion Of
increases over the budget sub
nitted by the outgoing Eisen-
hover administration. Resump-
tion of nuclear testing accounts
for an important part of the !
new increases.
Outlays for farm price sup
ports and related programs also
are expected to rise above pre-
vious estimates, which allotted /
$6.3 billion for the Agriculture
department. The $6.3 billion |
estimate included $47s million
Of increases over the Eisen-
hover budget.
The July forecast Of a S5.3
billion deficit resulted from a
series of revisions of the Eisen-
hover budget, which provided
for $S2.3 billion of revenues
and $500 billion of expendi-
lures, for a surplus Of SIS
billion.
President Kennedy chal-
lenged the accuracy of his pre-
decessors estimates, contend I
ing that President Eisenhower
would have had a deficit If he
had stayed in office. Mr.. Ken
nedy said Mr.. Eisenhower un-
dereStimated spending and
failed to allow for revenue
losses caused by the recession.
. Boosted Spending
Beyond revising the Eisen-
hover estimates, the Kennedy
administration boosted spend
ing for defense and for pro-
gfamS designed to stimulate
the economy and to meet
urgent national needs" Mr..
Kennedy said the expenditures
Increased revenues.
/ Secretary Dillon and other
administration spokesmen de-
fend the deficit as reasonable
in view Of defense requirements
and the recent recession. They
note that the prospective de-
ficit is modest compared with
tane fiscal 1859 deficit Of $12.4
btllion, which was caused by a
recession.
Because there is large-scale
unemployment and under use
Of productive capacity. the ad-
Tainistration maintains that
this years deficit will not be
inflationary. The President has
pledged to balance next years
budget, even If he must pro-