Evening star. [volume], January 16, 1957, Page A-13, Image 13

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
Humphrey Calls Budget
Too Big,OpposesTaxCut
Secretary of Treasury Hum
phrey thinks the newly an
nounced budget for fiscal 1958
is too big, but he Is offering no
suggestions about where it could
be cut.
And regardless of what he
thinks about the size of the new
budget, the Treasury chief is
dead set against cutting taxes at
this time.
These points were made by Mr
Humphrey at a budget seminar
for newsmen yesterday. He told
reporters he supports the budget
but “I think there are a lot of
places in this budget that can
be cut." He did not specify any
cuts, however.
About taxes. Mr. Humphrey
said, “The Treasury will fight
any and all tax reductions that
will mean a substantial loss of
revenue,” and added that this
opposition would apply also to
BUDGET
Continued From First Page
attained only with “prudent”
management of the Govern
ment’s fiscal affairs, seeking to
alleviate rather than aggravate
"inflationary pressures."
Explaining what this means in
regard to taxes, the President
said:
“Taxes must be retained at the
present rates so that receipts will
exceed budget expenditures and
the public debt can be further
reduced. The prospective budget
surplus in the fiscal year 1958
will reinforce the restraining ef
fect of present credit monetaiv
policies. . . .
“It is my firm belief that tax
rates are still too high and that
we should look forward to fur
ther tax reductions as soon as
they can be accomplished within
a sound budget policy. . . . How
ever. the reduction of tax rates
must give way under present,
circumstances to the cost of
meeting our urgent national re
sponsibilities.”
He urged extension for an
other year of present corporation
income tax rates and excise
taxes on tobacco, liquor and
automobiles, due to drop under
present law on April 1.
Forsaking custom, he included
several other recommendations
for legislative action in today’s
budget message instead of in the
state-of-the-Union message he
read to Congress last Thursday.
Most of these renewed proposals
that failed to pet through Con
gress last year.
Backs IT. S. School Aid
Among other things the Presi
dent called again for a special
Federal aid program for school
building, telescoped into four
instead of five years: statehood
for Hawaii and part of Alaska,
postal rate increases, and for
legislation to free natural gass
producers from public utility
type regulation—similar to a
bill he vetoed last year because
of what he considered shameful
lobbying pressure at the time.
He described his budget gen
erally as "well adapted to the
needs of the present and future";
—carefully balanced “in its *
choice of programs” as well as in
figures.
As distinct from estimated ex
penditures. he asked Congress for
approoriations and other new
cbligational authority totalling
$73.3 billion—some of the money
to be spent in later fiscal years.
This is an increase of $2.8 billion
over fiscal 1957 appropriations
and of nearly $lO billion over
fiscal 1956.
The increase for 1958 over 1957
was nearly the same for both
appropriations and estimated ex
penditures.
Most of Increase for Defense
In both accountings, the
President said about seven
tenths of the increase Is for the
military, “reflecting the higher
costs of producing, operating
and maintaining the complex
new weapons and equipment be
ing delivered to our defense es
tablishment."
Adding such things as foreign
aid to direct military costs. Mr.
Eisenhower figured "protection”
will cost the country $45.3 bil
lion in fiscal 1958, or 63 per cent
of the total budget. Civil bene
fits account for 24 per cent, in
terest on the national debt for
10 per cent, and civil operations
and administration for only 3
per cent.
In the civil benefits field, the'
President said: “We must move
forward in some areas of in
vestment while we hold back in
others. For example, the needs
for schools, highways and
homes are so urgent that I am
proposing to move ahead with
programs to help our States,
cities and people undertake such
construction at a prudent rate.”
The highway program did not
figure in the budget as such, be
cause, under the 1956 law au
thorizing it, it is being financed
from proceeds of certain excise
CIVILIAN SPENDING
KEEPS RISING IN
LATEST BUDGET
By the Anocleted Pres,
Federal spending for non
defense Government opera
tions has increased in each
of the four budgets sent to
Congress by President Ei
senhower.
The new budget for the
fiscal year 1958 beginning
next July 1 calls for outlays
of $26.5 billion for purposes
other than the $45.3 billion
earmarked for "protection.”
The new non-defense sum
thus is S4OO million higher
than the revised estimate of
such spending in the current
1957 fiscal year. It also is
$2.4 billion more than actual
non-defense spending in
fiscal 1956 and $4.6 billion
above such expenditures in
fiscal 1955.
The last budget prepared
by former President Truman
and administered by Mr. Ei
senhower included $21.25 bll- 1
lion in non-security spend
ing—ss.2s bl'lion below the
latest figure.
-IPresident Eisenhower’s sugges
. tion of tax relief for small busi
- s'ness.
I Rather than dole out piece
-5 i meal cuts, Mr. Humphrey said,
i the Government should wait
until the budget can afford a
e general reduction applying to
f individuals as well,
s Tax reductions, he said, might
t come a year from now if pro
posed higher expenditures in the
• new budget could be trimmed.
r Like Budget Director Percival
i Brundage, who also had a seml
t nar yesterday. Mr. Humphrey
f I bore down heavily on getting the
1 Post Office on a black-ink basis.
/ The administration, Mr. Hum
phrey said, “will put all the
f pressure we can on Congress to
t raise postal rates and put the
t postal service on a pay-as-you
f| go basis.” Mr. Brundage said at
s'his conference that a 5-cent
3 letter mail rate would be sought.
taxes on motor fuels, tires and
vehicles. The receipts are de
r posited in a special trust fund
’ and expenditures made from
- that instead of being made a
j part of the general budget.
; Mr. Eisenhower reported that
1958 fiscal year expenditures on
I the highway program are esti
t mated at $1.7 billion, with the
i trust fund receipts estimated at
-1 52.2 billion. With a balance of
• $390 million on hand, the high
‘ way trust fund is expected to
f:have a balance of $770 million
t'at the close of the fiscal year.
• Budget Bureau Director Per
■ cival Brundage explained that
' the special trust fund was created
because if the earmarked high
£ way receipts were included in;
t the general budget they would
• raise the surplus to give a false
5 picture since they could not be
i used for other purposes.
Under the 13-year program,
5 expenditures on highway build
t ings are expected to rise grad
s ually to nearly $3 billion an
■ nually. Thus the early surplus
in the trust fund will be used
■later.
II His Third Balanced Budget
• This was the third balanced
I budget in a row for Mr. Eisen
’ hower. His first budget, for the
1955 fiscal year, wound up $4.2
1 billion in the red. But since
> then they have been in the black
> by gradually rising figures of,
■ $1 6 billion, $1.7 billion and $1.8:
! billion.
.j The fiscal 1956 surplus of $1.6
; billion was used to reduce the
• public debt. His message today
provided for a continuation of
This practice, and he estimated
That the debt, which was $272.8
j billion at the close of the 1956
fiscal year, will be down' to $269.2
1 billion at the end of fiscal 1958.
' Despite the "modest” debt
1 reductions, it is expected to cost
the taxpayers $7.4 billion in in
' terest for fiscal 1958. a SIOO
1 million increase. The President
explained that the rise in in
i terest charges is due to higher
■ rates the Treasury has to pay
■ in refinancing securities that
are maturing.
He urged upward revision of
interest rates charged on several
types of Government loans to
the public to reflect the current
“tight money” conditions.
Budget Director Brundage said
he does not anticipate “any sub- j
•;stantlal further tightening” of
credit.
For the Government. Mr.
Eisenhower insisted that thel
present economic situation "re
, quires that less pressing ex
; penditure programs must be held
• back and some meritorious pro
posals postponed," although the
■ budget "must also reflect the
general responsibilities of a Gov
; ernment which will be serving
172 million people in the fiscal
(year 1958.”
Details of his increased de
fense budget are presented else
■ where in today’s The Star. A
! summary of some of his major
• proposals in other fields follows:
INTERNATIONAL
“As a simple matter of self-'
. preservation,” the President said,
“we must maintain our own
! strength and promote world
, stability by helping to build up
the strength of friendly nations.” I
For the mutual security or
foreign aid program, he pro
posed a $250 million increase in
expenditures to $4.35 billion in
fiscal 1958. He urged a bigger
i jump in appropriations to $4.4
: billion, compared with $3.8 bil
lion actually enacted for the
current year. A year ago he
: recommended appropriations of
$4.8 billion, from which Congress
; cut $1 billion.
Military assistance expendi
tures under the mutual security
i program were figured at $2.6 bil
i|lion. the same is in the current
, year. Economic aid estimates
i went up to $1.75 billion from $1.5
' billion.
Mr. Eisenhower said he would
send Congress a special message
■ later, on details of the mutual
1 security program.
38 Nations Get Aid
In the meantime, he pointed
out that 38 countries now are re
ceiving military equipment and
training through its military aid
provisions. A large part of the
1958 funds for military aid will
go for new types of weapons for
air defence, he said.
The President urged greater,
flexibility in aproprlating foreign'
aid funds, allowing greater dis
cretion in ther use instead of
ear marking al lthe funds for
specific purposes. He noted that
the $4.4 billion appropriation
request includes ‘s2oo million for
I “discretionary use in the Middle
East” in line with his recent
special message to Congress on
the Communist threat in that
area.
Asserting that the “intensified
world-wide ideological conflict"
emphasizes need for exchange of
Information and ideas, he urged
a $25 million increase to $l2B
million in United States Infor
maton Agency expenditures.
Provisions to strengthen the
State Department staff and fa
cilities raised estimated expendi
tures for the conduct of foreign
affairs S4O million to $194 million
ATOMIC
Continued expansion of "our
! nuclear arsenal” until the Soviet
EISENHOWER URGES
OFFICIAL RESIDENCE
’ FOR VICE PRESIDENT
President Eisenhower fa
vors an official residence for
the Vice President of the
United States.
In a brief but definite
recommendation, he told
Congress in his budget
, message that among items
to which “special attention
should be directed” was one
for “acquisition and mainte
nance of an official resi
dence for the Vice Presi
dent.”
While no information on
this proposal was forth
coming from the office of
Vice President Nixon, it was
learned there is no recom
mendation for funds in the
j budget message.
Instead of outright pur
chase, however, it was
hinted that someone might
offer such a residence as a
j gift.
Union agrees to effective con
trol of armaments was promised
by the President. He also em
i phasized “increased effort on
power reactor development” and
other peaceful' uses of atomic
/energy.
[ "More resources will be ap
. plied," he said, "to the longer
■ term effort to develop thermo
; nuclear (hydrogen) power re
! actors.”
He budgeted Atomic Energy
, Commission expenditures for the
1958 fiscal year at $2,34 billion, a
S4OO million increase over the
current year. There was no
breakdown* of this figure as be
tween weapons and power devel
opment.
In the weapons field. Mr.
Eisenhower said "emphasis will
be placed on weapons for tacti
cal purposes and weapons re
duced radioactive fallout.”
Power Experiments Urged
| Trying to find ways to produce
i atomic power at competitive
prices, the President said the
budget provides for increased
AEC effort “to explore new power
reactor concepts, to farbricate
and operate reactor experiments,
and to develop the basic reactor
technology essential to the Na
tion’s progress and leadership in
the field.”
He proposed no funds for Gov
ernment construction of large
r scale commercial atomic power
plants, but said he would do so
if a number of new proposals
from non-Federal interests for
such construction do not materi
alize “within a reasonable time.”
j To facilitate private industry’s
investment in atomic plants, he
again urged legislation to au
thorize the Government to sup
plement commercially available
insurance against liability aris
ing from possible nuclear ac
cidents.
He also urged prompt action
by Congress to authorize full
United States participation in
the International Atomic Energy
Agency as part of “our atoms
for-peace program.”
SCHOOLS
Congress was asked to ap
propriate $451 million for the
first year of the four-year school
building aid program recom
mended by the President. He
estimated 1958 fiscal year ex
penditures under the program at
$lB5 million.
Mrs. Eisenhower reported that
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States and communities have
lmade greater efforts on their
'own during ttie past year to
| overcome classroom shortages.
'He said 69,000 classrooms, 10
per cent more than last year,
are expected to be built in the
1956-57 school year.
"Despite these gains.” he said,
“growing enrollments are strain
ing the financial capacities of
school districts in many areas
of the country.”
SMALL BUSINESS
The President’s stand against
any substantial tax cuts ruled
out administration support for
a proposal to help small busi
ness by cutting the tax rate on
the flr3t $25,000 of corporation
income to 20 per cent from 30
per cent.
This one-third cut was among,
recommendations of the Presi-i
dent’s Cabinet Committee on;
Small Business, to which he 1
promised “favorable considera
tion” last August.
In his message today, Mr.
Eisenhower suggested “early con
sideration” by Congress to giv
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1 ing small business some lax re
' lief ’with a minimum loss of
i revenue,” but said any changes
involving “substantial loss of
1 revenue” should be saved until
later. Mr. Brundage said he
assumed the one-third cut In
rates on the first $25,000 of cor
poration income would not be
recommended.
The President urged extension
’ of the Small Business Act and
said his forthcoming Economic
Report would discuss other
; means of aiding small business.
> HOUSING
The President asked for legis
' lation to provide “more realistic”
interest rates on Government
j loans for all types of housing,
including so-called' “Gl” loans.
He did not spell out specific
. interest rate increases contem
plated. Budget Bureau Director
Brundage explained that the
administration wanted greater
flexibility to set interest charges
. in conformity with current con
ditions and types of loans. He
described it as “unwise” to try to
set specific rates In legislation.
For slum clearance, Mr. El
senhower asked new obligational
authority of $250 million a year
for two years. He estimated ex
penditures under this program
for fiscal 1958 at $47 million and
said they will gradually increase
in later years.
He also asked authority for the
Federal National Mortgage As
sociation to borrow an additional
S7OO million from the Treasury.
POSTAL
To get the Post Office De
partment out of the red, the
President again urged an in
crease in postal rates— this time;
to provide $654 million addi
tional revenue.
His budget message did not
spell out the proposed postage
increases. Mr. Brundage said the
Post Office Department is dis
cussing an Increase In the first
class letter rate from 3 cents to
5 cents, and various other pro
posals.
If Congress approves the $654
million rate rise, the President
THE EVENING STAR, Washington. D C.
WEDNESDAY. KXt AXY In. I<IR7
said he then would propose a
supplemental appropriation of
about S7O million to permit in
vestment In equipment and
facilities necessary for more ef
ficient handling of the ever-in
creasing volume of mail.
If the rate increase is not ap
proved, he said the Post Oifice
Department would run $642 mil
lion in the red.
FARM
The President recommended
only comparatively minor new
legislation to aid farmers, count
ing on the soil bank and other
existing programs to help boost
their income.
He did urge extension of the
surplus disposal act, due to ex
pire June 30, and ’.cgislatio.i to'
authorize baiter of surplus farm
products to Eastern European
countries.
He budgeted soil bank ex
penditures for the 1958 fiscal
year at $1.3 billion, about $45
million more than in the current
year. Net price support expendi
tures of the Commodity Credit
Corporation were estimated at
$1.9 billion, about the same aa
this year.
All expenditures in the agri
cultural resources field, including
such things a farm loan opera
such things as a farm loan op
erations and research, were esti
mated at $4.9 billion for the new
fiscal year, an increase of more
than S2OO million.
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A-13