Evening star. [volume] (Washington, D.C.) 1854-1972, 1961-02-10
Bush Questions
Cut in Taxes 10
End Recession

NOLlHcCLlCuL, UOQay QueSClOIleQ
the usefulness Of a temporary
tax cut to combat the recession
by boosting purchasing power.
But Representative Patman,
Democrat of Texas, announced
his intention to introduce a bill
that would give the President
standby power to raise or lower
corporations and individual in
come taxes by 10 per cent as
economic conditions might die
tate.
Discussion Of proposals to
cut taxes temporarily came up
during the second day Of hear
ings by the Senate House
Economic Committee on the
economic outlook. President
Kennedy is considering the idea
of reducing taxes temporarily
If the economy shows no signs
Of pulling out Of the recession
by April.
Bush Doubts Plan
Senator Bush said propon-
ents Of the tax reduction device
have failed to demonstrate
that 1t would do much good.
He suggested that those bene-
fitting from the reduction might
save much Of the money in
stead Of spending it.
Senator Bush said 1t would be
more useful to siphon money TO
unemployed workers than to
cut taxes for those who have
jobs-presumably through lib
eralization of unemployment
compensation benefits. as the
President has proposed.
Herbert Stein, research direc-
tor of the Committee for Eco
nomic Development. warned in
his testimony that a temporary
tax cut could be potentially
dangerous" as well as "poten-
TALLY useful"
But he disputed Senator
Bush's contention that q tar
cut later in the recession would
he of very limited value. He
said tax reduction would stimu.
late the economy faster thar
an equal increase in Govern.
J ment spending.
Mr.. Stein told the COMMITTEES
one danger involved in tenn
porary tax reduction would be
the reluctance Of Congress to
rescind the cut after the recess
sion ended. There might be q
reduction to become perma.
J nent, he said.
Fears Initiation
In addition, he said, tax cut
might intensity inflationar,
pressures, If the cut were re-
scinded suddenly, he added. thu
shock might cause an economic
decline after the recovery be-
3 gan.
Mr.. Stein also said the Essen
| hover administration made ;
mistake last year in squeezing
] out a surplus in the Fedora
3 budget. The surplus, he sug'
J gested, contributed to stop
| ping the recovery from thu
1878 recession that wa
under way in 1889"
Another witness, w. E
Hamilton of the American
Farm Bureau Federation, dis
sented from the prevailing view
among economists that thu
| Federal budget should run {
Z deficit now to combat the recess
: sion.
He said the budget shoulc
be kept in balance under cur
rent conditions, and addec
= that his organization opposes
! increasing Federal spending
. for "pump-priming" purposes
? Discounts Recession
z Mr.. Hamilton said at woule
! be premature to conclude tina
we are in a serious recession
D He added that initiation vii
/ continue to be q serious prob
z lem in the years immediatel!
~ ahead"
Q Farmers have been hur
!, economically more by risinl
J costs than by falling prices
n he said, arguing against thu
Presidents proposal to rails
= the minimum wage.
b. Angus Mcdonald of the Ma
l. tional Farmers Union calle,
a. the outlook for agriculture ant
l. employment grim" but he ex
ID pressed hope that the Ken
nedy administration will hell
e the situation by reversing
l. 18th century" policies Of tn
I'd Eisenhower administration
rs Mr.. Mcdonald laid heavy EN-
I'd phasis on enforcement of anti
L. trust laws to keep farmers