Budget: 1934

Fiscal 1931 produced a Federal deficit of $903,000,000. Fiscal 1932 closed with the Treasury $2,472,000,000 in the hole. For current 1933 a deficit of $1,146,000,000 is indicated by June 30*. Last week President Hoover sent to Congress the 1934 Budget in which a fourth deficit of $307,000,000 was forecast. On such a showing President Hoover would have the unhappy distinction of being the first President to complete his term with his budgets continuously unbalanced.

But President Hoover was determined to make one last fighting stand against another deficit. Said he in his budget message :

"To meet this situation I recommend: 1) that the Federal tax on gasoline (1 per gal.) be continued until June 30. 1934, producing about $137,000,000 additional revenue; 2) that the manufacturers' excise taxes now imposed on certain 'articles be extended and in part replaced by a general uniform tax (excluding food). The annual yield of such a general tax at 2 1/4% would be approximately $355,000,000. The additional $492,000,000 of revenue produced in this way will avoid a further in crease in the public debt [i. e.--balance the budget]."

A general manufacturers' sales tax such as now proposed by the President was rejected by the House decisively last spring, and blocked by a Senate round-robin. A $6 per bbl. tax on real beer, as advanced by the Wets for the present session, and as ignored by the President in his message, would produce approximately as much budget-balancing revenue as the loudly hated general sales tax.

For months President Hoover and James Clawson Roop, his budget director, had been whittling and pruning at Federal expenses in an unsuccessful effort to level up outgo and income without resorting to new taxation. Director Roop, a large, round-faced man through whose tight lips pass nothing but a pipe stem, practices none of the noisy drama of the first occupant of his office (Charles Gates Dawes) or the publicized penny-pinching of the second (the late Herbert Mayhew Lord). Few U. S. officials see their President more often or more easily than Mr. Roop. Yet, utterly modest, he has no pride of author ship in his annual masterpiece on which not even his name appears.

Prime budget figures:

1933 Appropriations $4,800,731,979

1934 Estimates 4,403,178,032

Total Economy $397,553,947

But President Hoover had promised a cut of $700,000,000 in expenses. How was this to be obtained? The President offered Congress two legislative proposals to increase 1934 savings to $581,923,635.

1) In addition to continuing last year's forced furloughs, an 11% reduction on all Federal pay over $1,000 per year, to save about $55,000,000.

2) A complex overhauling of veterans' compensation, allowance, pensions, insurance and hospitalization to save about $127,000,000. Examples: No Federal income tax payer could draw a pension. Civil disability allowances would be granted only the totally and permanently disabled. Retired emergency officers in hospitals would have their pensions cut to $20 per month after 30 days treatment. Veterans now drawing $50 per month for arrested tuberculosis would lose their compensation. A system of periodic physical examinations would weed out malingerers.

This year $1,020,000,000 was appropriated for veterans. Unless the President's proposal is carried out, this figure will automatically rise to $1,060,000,000 in 1934, through an increase in the number of veterans becoming eligible for benefits.

President Hoover proposed an end to Federal aid for State roads (saving: $180,000,000) and emergency public building (saving: $148,000,000). Other important economies over 1933: Hoover Dam, $13,000,000; Farm Board, $40,000,000; rivers & harbors $20,000,000. Big increases: $21,000,000 for naval construction; $85,000,000 for interest on the enlarged public debt; $68,000,000 for tax refunds.

The Army took a budget cut of $18,361,716, the Navy $19,258,605.

* On Nov. 30 the deficit stood at $751,311,422. March and June income tax payments are counted on to hold it back.

This file is automatically generated by a robot program, so reader's discretion is required.