Evening star., 1962-01-18
BUDGET
Approval of Postal Rise
Seen Financial Necessity
Continued From Page A.

Continued From Page Al
fense and space research. An.
other $400 million of the in
crease is attributable to higher
interest payments on the ma
tional debt.
Some Projects Stayed
Heightened requirements fol
national security, he said
forced him to apply "strict
standards of urgency" in re-
viewing proposals for monde.
fense spending. Many deSira.
BILE new projects and activities
are being deferred" Mr.. Ken.
nedy said.
Nonetheless, the 1925 billion
budget he proposed was the
highest in the Nations peace.
time history. exceeded only by
the wartime budgets of 1914
and 1945. This level of spend.
ing seemed certain to draw
criticism from Republicans anc
conservative Democrats who
mad called on the President tc
tlghten the belt" on domestic
programs.
Anticipating their arguments
Mr.. Kennedy said, 1T woulc
not be sensible to defer ex.
penditures which are of great
significance to the growth anc
strength of the Nation. This
budget therefore includes
some new proposals of high
prlority-such as Improvement.
In education and scientific re.
search, retraining the unem.
ployed and providing younc
people with greater employ.
ment opportunities, and aid tt
urban mass transit"
The budget detailed no new
programs in these fields, bu
referred to the legislative goal
Mr.. Kennedy had outlined il
the state-of-the- Union messagl
last week.
Called Not Inflationary
Budget Director David E. Bel
characterized the document a.
AN expansion and growth
budget, but not an inflationar,
one."
He called attention to tn,
forecast of a $4.4 billion surplu
IN a special version of tn,
budget called the national in
come accounts" that admin
1stration economists regard a.
a more valuable tool for eco
nomic analysis than tn,
conventional "adminfstrativ,
budget" This surplus, Mr.. Bel
said, indicated the budget
rather than fueling an infla.
tionary boom, would exert 6
mildly restraining" effect OF
the economy's current healthy
growth.
Asked if the forecast of s
surplus was a solid one, tht
budget director replied tina
anyone is entitled to say any.
thing he wants. We believe thi,
is not a phony or rigged budget
but an honest and accurate
one"
Rely on Mail Boost
The major assumptions OF
which the surplus prediction
rests are:
l. That Congress will pass tn,
$595 million postal rate increas,
bill, a prospect which Mr.. Bel
and most congressional observ
ers believe is mot unrealistic.
2. That it will again, as it ha!
yearly for the last decade, ex.
tend wartime corporate profi
and excise tax rates and saw,
the Treasury a revenue loss O
$2.8 billion. The tax reform
proposals recommended b.
the administration and pend
ing before the House Ways anc
Means Committee would not
If adopted, cause any signifi
cant gain or loss in revenue
Secretary of the Treasury Dill
Ion said.
3. That the economy viii
continue to move aheat
through mid-1963, boostinI
personal and corporate income
enough to increase tax receipt
$10.9 billion to $93 billion il
fiscal 1868. eff the economi
recovery Unexpectedly halts o
is reversed" the President SAID
revenues would fall below tn
current estimates and a defici
would inevitably result"
4. That Congress will pas
the administrations still-un
disclosed agriculture propos
ais and their adoption vii
cut farm subsidies b
$434 million. This assump
tion could be upset, not only b,
congressional politics, but b,
the ingenuity of the farmer
and the vagaries of weather
which have combined in som
past years to throw subsid,
estimates off by a billion dollar
or more.
5. That the military reserve
modified during the Berlil
crisis can be deactivated b
June 80 and that no new criSi
erupts in the next 18 month
which would require a suddel
and unexpected jump in de
tense spending.
Defense, Space Jump
AS laid out in today's budget
the biggest increases in fiscs