Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-11-12


Budget Director David E.
said Federal expenditures in
evitably will increase to 500
billion, and many observers
have expected spending to
reach that level in fiscal 1864,
the year starting next July /.
Less Than SIS Billion Rise
Many tentative decisions have
been reached on the fiscal 1864
budget, which President Ken
nedy will send to Congress next
January. The figures add UP
to a spending increase of less
than SIS billion over fiscal 1863,
officials said.
Revised estimates for fiscal
1868 put spending at a bit less
than $94 billion, up from the
Presidents forecast of 1925 bill
lion last January.
The biggest budget in Amer
lean history was 1888 billion,
in fiscal 1945, a war year. Cri-
tics of Federal spending con-
slider the prospect of a $500
billion peacetime budget a SYM
Dol of Government extrava-
gance and fiscal responsibility.
Mr.. Bell this week will re-
lease revised estimates for fiscal
1868. The new spending figures
will include 5000 million or less
traceable directly to the cost of
the Cuba crisis.
Expects Deficit
Federal revenues in fiscal
1868 now are expected to fall
substantially short of the orr
ginal 500 billion forecast, partly
because Congress trimmed the
Presidents tax. revision bill but
mostly because the economy has
been sluggish.
Instead of the 1853 million
surplus predicted by Mr.. Ken
nedy last January, the admin
iStration now expects a fiscal
1868 deficit of about Sc billion.
That would compare with de-
ficits Of $6.3 billion in fiscal
1852 and $50 billion in fiscal
1861.
The budget director usually
issues a printed pamphlet and
holds a news conference each
autumn when he releases revised
figures. This time, however, Mr..
Bell will issue a brief mimeo-
graphed press release and skip
the news conference.
A spokesman explained that
the "mid-year review" is so late
this year that the Budget Bu-
reau is too busy with fiscal
1864 plans to produce an Ella
borate review of fiscal 1868.
Although spending will in
crease in fiscal 1864, the Presi-
dent has rejected the advice of
economists who advocate a very
large budget deficit to stimu-
late business activity. Mr.. Ken !
nedy's budget will be "expan-
sionary," but not aggressively
so.
Space Spending to Rise
Expenditures for defense and
space will rise substantially
over fiscal 1868. But the Presi-
dent repeatedly is slashing
agency requests severely in
civilian areas.
Spending figures for fiscal
1864 are nearly firm. Budget
makers will not pin down their
revenue estimates for several
weeks.
Federal revenues depend on
the state of the economy, ris-
ing and falling with individual
and business income.
The most likely choice lies
between two of the four econo-
mic models" still under con-
Sideration-the model based on
a continued slow rise in econo-
mic activity with a level rate
of unemployment, and the one
contemplating a mild recession
with unemployment rising while
production and income remain
on a plateau.
One of the other models pro-
iectS a more severe recession,
with rising unemployment and
declining production and in
come. The most optimistic
model assumes progress toward
full employment.
Despite increased spending
and the Presidents plan to cut
taxes next year, officials
predict that the fiscal 1864 bud
get deficit will be little if any
larger than the deficit in fiscal
1858. They do not rule out the
possibility of a smaller deficit.
Policy-makers count on tax
reductions to stimulate the
economy enough to offset a
big part of the theoretical
revenue loss.
Aside from considerations
Of economic policy, Mr.. Ken
nedy has rejected proposals
for a very big budget deficit in
fiscal 1864 because the prospect
/