Twin Sub jects of Spending and Budget
Flash Off and On Like Neon Lights
By James Marlow
Associated Press News Analyst
WASHINGTON UPI —- Tempers
and guesses — on the twin sub
jects of spending and budget de
ficits — flash on and off like the
lights on a pinball machine.
This annual rumpus is getting
routine for, as time marches on,
there are fewer and few'er people
left to recall wistfully those good
old days when budgets used to be
balanced every year.
The government has just finished
another year in the red. It will
almost certainly land in the red
again this year, too. That’s no sur
prise.
In those past 32 years the gov
ernment has wound up in the black
—with revenue greater than ex
penses — only six times. And the
end of deficit spending isn’t in
sight, despite President Kennedy’s j
high hopes.
On June 30 the government !
closed out its 1962 fiscal year with
expenses estimated at $88 billion
and income at $81 billion — A $7
billion deficit.
This was the second biggest post
war deficit. The biggest was in
fiscal 1959 when the government, !
under President Eisenhower, went
in the red for $12.5 billion.
Last January Kennedy sent
Congress his budget — his esti- j
mate of what it would cost to run [
the government another 12 months
—for the fiscal year starting last 1
July 1.
He figured spending at $92.5 bil- I
lion but revenues at about $93 i
billion. This was hopeful. Too
hopeful.
If it came true, it would put the
government in the black for the
first time since 1960 with revenue
greater than spending by about
$500 million. It sounded dreamy
then, sounds more dreamy now,
and for several reasons:
1. Last week, under an old au
thority granted by Congress, he
gave business a $1.5 billion tax
break which by itself, if his Janu
ary estimates were correct, would
put the country back in the red
with a deficit of $1 billion.
The tax cut for business was in
the form of more liberal allow
ances, than business has now, for
charging off depreciation on its
machinery and equipment.
2. There’s a rising screech from
business and labor — from the
U.S. Chamber of Commerce and
the AFL-CIO for income tax cuts.
These cuts have been estimated at
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all the way from $5 billion to $10
billion.
3. A stumbling national economy
which, translated into bread-and
butter terms, means: If business
doesn’t make more money this
year, it will have to pay less tax
on its profits, thus reducing gov
ernment revenue.
The idea behind those tax cut
proposals is that if people have to
pay less in taxes, they’ll have more
to spend on things they want, and
and in this way fatten business
profits, thus boosting the economy
all around.
Kennedy is still trying to make
up his mind on this one.
After the war the country, un
der President Truman, wound up
in the black three times. It was
also in the black three times under
Eisenhower. The big deficit of
fiscal 1959 resulted from the 1958
recession.
But those six budget surplus
years under Truman and Eisen
hower wrerc the only times since
1930 that the country has been in
the black.
From fiscal 1920 through fiscal
1930 the nation was in the black.
But the depression set in and, after
that, World War II.
That was the last time the coun
try got out of the red until 1947
under Truman.
C21 VISITORS
July 6 — Mrs. E. Johansen,
Nome.
July 7 — ‘Alaska Day at Fair',
Mrs. C C. Croeus, Mrs. Edna H.
Lomen, Retta and Roger McNees,
Marie S. Allasson, Phoebe West,
Mrs. Ernest B. Boulanger, Myra
and Bill Kelsey, D. Brown, Martha
M. Larson, Marie L. Morton, Mrs.
Ed Hanson, Barney Rolando, Mr.
and Mrs. P. J. Denhart, Mrs. Rich
ard Sackett, Nellie McDonald, Bes
sie L. Fowler, Ellen L. Smith, Min
nie Strickland, Wm. Bourgault,
and Gus Masik all of Nome.
Angeline Thach, Esther Schau
bel, Rachel and David Craig, Mr.
and Mrs. George Morlander, Helen
and Chester Seveck all of Kotze
bue.
Bella Julian, Thelma Glazou
now. Aimer Rydeen, Candle; Clara
M. Richards formerly of Nome,
now in Seattle; Jeanie Rothacker,
Anchorage and Nome; Amanda
Nelson, Flat.
VATICAN BOMBED
VATICAN CITY t/P — Vatican
officials investigated today a bomb
explosion in St. Peter's Basilica
but said they attach no political
significance to the blast. They said
it appeared the work of someone
mentally deranged.
The tiny bomb went off Satur
day night after the Basilica had
closed. Damage was slight and no
one was injured.
Mat-Mil.f A.Vi S»? X! ( » OF
CAfilNF F HRINO.S PKI SSI RF
FROM OPPOSI i i< )\ !.l ADFRS
LONDON 'A* — Pri.T.t Minister
j MacMillan’s wholesale shakeup of
his cabinet brought new pressure
| from opposition lecher Saturday
for an immediate national election.
Labor party leader Hugh Gait-;
I skell called MacMillan's firing of
| seven of the 21 Conservative min
isters Friday night “a political
massacre which can only be inter
preted as a gigantic admission of
failure.”
“Instead of getting rid of his <
colleagues, the Prime Minister |
should resign and let the people !
elect a new government,” Gait- j
skell added.
MacMillan's Conservatives have I
a mandate to serve until the fall 1
of 1964. The Prime Minister can !
call a general election any time!
before then, but he is not expo -ted
to do so before the fall of 1963.
Conservative candidates have
taken a thrashing from opposi
tion Laborites and resurgent
Liberals in 12 recent special elec
tions. By the infusion of new blood
into the cabinet, MacMillan hopes |
to restore the battered image of j
his government before it goes to
the polls.
Much of this image apparently j
centers around Richard A. (Raid
Butler, 60, who was officially de
signated Deputy Prime Minister.
The move heightened speculation
that MacMillan, 67. would step
aside for the former Home Sec
retary in the next election.
Perre Returns From Brazil
NEW YORK UP) — Pierre Salin
ger, President Kennedy’s press j
secretary, returned today from
Brazil. He had talks with officials
of the Brazilian government about
the president’s postponement of a
visit to that country until Nov. 12.
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SAIOON. South Viet Nam vP -
Thr< <• aii era .he: 2 1 ho;as iti
South Viet Naurs u< r, din -.ifV.■- ‘
cd .jungle.- today loft 2fj dead, in
cluding four .American ervicemen.
Five more Amor.ran wore miss
ing in the air crashes, and anothei
was killed in an ambush Saturday
m one of the bloodiest weekend.
in recent months.
The confirmed deaths brought to
27 the number of U S. servicemen
killed in Viet Nam, 10 of them in
combat since the United States be
gan its stepped up assistance here
last December.
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LONDON •? Prime Minister
MacMillan tonight announced the
■enation of nine more ministers
,11 tiie . iff inf i phase fit hi sweep
ing r :oin< * recor; -ruction
Ki-vc n back . ■ :ii member : of
Parliament. moe *•»: tl.-rn young,
•.vere brought into ‘or government..
Tin y included Hugh Fraser, 44.
A:r Minister: .Julian Amery, Mu- -
Millan's son-in-law. Minister of
Civil Aviation, an-: Niall MacPher
.o-n, 53, Minister of Pensions and
National Insurance.
In what va'i. regarded a an at
tempt to r- vitalize the O-nserva
tive party, MacMillan dismi ed
even senior cal inet mini ter last
week. Tiie Conservative: have
been : martins ft-m a series: of
special election defeats.
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