Up the Roller Coaster

The first reaction to the President's Budget for the fiscal year 1941-42 came as a reading clerk in the House of Representatives droned: ". . . will cost about 17.5 billions of dollars." A Congressman whistled. Speaker Sam Rayburn pounded his gavel. The clerk droned on.

Later, as members filed out of both Houses, they growled to reporters: "When you jump off a monument, the sensation is fine as long as you keep going" (Representative Richard Wigglesworth, Massachusetts); "The deficit . . . threatens the solvency of the U. S. The President still believes in spending Government money as if it were water" (Senator Robert Taft, Ohio); "... A minimum of what we ought to do . . ." (Senator Alben Barkley, Kentucky); "My digestion is not good enough to take it down at one gulp" (Senator Arthur Vandenberg, Michigan); "I'm for adequate national defense, if it takes our shirt" (Senator Tom Connally, Texas); "... a trick budget . . . juggling of figures . . . what we need today is to curtail drastically non-defense spending . . ." (Senator Harry Byrd, Virginia).

By next day editorial writers had at least leafed through the Budget's 1,208 pages of small type, were ready with some more carefully aimed conclusions.

A majority seemed to agree with the Senate's biggest apple-grower and economiser, peeling-paring pinchfist Mr. Byrd. Many went further than Senator Byrd. Furthest went the Washington Post, which asked in an editorial, "Where Is the Sacrifice?" Said the Post, pointing to the President's "failure" to cut non-defense expenditures: "This is a strange application of the President's thesis that sacrifices must be made by everyone in the interests of national security. ... He has recommended only petty economies. . . ." For the same reasons the New York Herald Tribune called the Budget "disheartening." To the New York Times, striving to be temperate, the President's proposed economies were "wholly unimpressive."

Budget-porers looked hard at such items as $90,000 for hothouses in the Washington Botanic Gardens; $849,700 for completion of the National Archives Building, which to the layman's eye has seemed completed since it was occupied in 1935; the addition of 335 new employes to the Railroad Retirement Board; addition of 1,469 new workers to the Veterans' Administration (the State Department got only 35 additional employes). Sniffing such apparent piecrust, citizens could well ask: Where is the sacrifice? The broad outlines of the Budget were simple, partly because the size of the figures made them incomprehensible. In the current fiscal year, ending June 30, 1941, the President was trying to spend $13,202,370,970; would try to spend $17,485,528,049 in the next fiscal year. Defense called for 28 billions of dollars from June 1940 through June 1942; with $6,463,923,900 to spend this fiscal year, $10,811,314,600 next. Aid to Britain would be entirely extra, over & above the 17.5 billions. Revenues coming in were up now to $7,012,930,000 this fiscal year; were estimated at $8,275,435,000 next.

Deficit: $6,289,440,970 this year, $9,310,093,049 next. Public debt, now about $45,000,000,000, would zoom over $49,000,000,000 by July 1, might top $58,000,000,000 by July 1, 1942. The President questioned the meaning of a legal debt limit, hinted that there should be no legal limit.

Total non-defense costs: $7,078,000,000 this fiscal year, $6,674,000,000 next. The cost of Social Security, National Youth Administration, debt interest to be increased; public works, relief, CCC, farm aid, to be decreased. Relief was slated to decrease only about $400,000,000 each year from its present $1,861,421,985.

The Government hopes that unemployment will slide down to about 4,000,000 men by the end of 1941, that WPA's 1,600,000 may be nearly all absorbed in industry by mid-1942. But Mr. Roosevelt said flatly that "even with what we call 'full employment,' there will remain a large number of persons who cannot be adjusted to our industrial life. For this group the Government must provide work opportunities." Thus the President confessed his belief that WPA is incurably permanent, a fixed part of U. S. life; that there will always be obsolete, unemployable men whom the Government must "employ." And a further footnote: an estimate of $1,034,139,700 for work relief in 1941-42 was a sign of the President's fear that even $17,500,000,000 would not really prime the U. S. pump.

The decrease in farm aid was slight --$45,000,000 -- and meant little to a Congress that may divide on anything else but always blindly unites to increase any farm appropriation. Persnickety minds could note with wry interest the President's item of $212,000,000 for farm parity payments. Last year, knowing that $212,000,000 would shoot the budget close to the legal limit of $45,000,000,000 --knowing also that Congress would appropriate that money anyway -- Mr. Roosevelt had left out the item.

Defense. Apple-Knocker Byrd's crack about "juggling" the books seemed a good crack to some people, even if his worries about the dim future seemed pretty dim. One worm Byrd pounced on: throughout normal peacetime years, Army & Navy were doled out about $700,000,000 annually. These normal expenditures were this year transferred to emergency defense by Mr. Roosevelt.

But the biggest hitch about defense spending was simply the problem of spending money fast enough. To keep up with the Budget, Government employes must spend $19,855 per minute, day & night, for the next 18 months. Last month, by herculean effort, defense spending reached $901,440,000 for December's 31 days. To hold the Roosevelt pace, defense spending must average nearly a billion per month from now on. And that figure would not include the spending for aid to Britain.

Seemingly the only way to spend fast enough would be through the use of absolute priorities, forcing non-defense plants to make military equipment.

Taxes. The President asked for more taxes, leaving types and amounts to Congress. But he left no doubt that he is utterly opposed to sales taxes or processing taxes which do not disturb profits, but soak the consumer. Ability to pay he fixed as the guiding principle. From these clues taxperts could guess the shape of the bill that will destroy next spring's beauty for many a citizen: stiffer excess-profits taxes* (not a straight-out increase in regular corporate income-tax rates); another increase in surtax rates on incomes, probably on those in the so-called "savings" brackets, between $15,000 and $500,000. In the making, taxperts guessed, was some bludgeon being tooled to club upstanding tax-exempt securities into an abject state of taxation.

Onward & Upward. Last July's Democratic platform made no mention of that fiscal dodo, that old museum piece: a balanced budget. Franklin Roosevelt held to precedent--he didn't mention it, either. In its place he substituted a picture of a fertile, high tableland of national income, its rare air oxygenated by Federally subsidized public works, after defense spending ends. He termed the U. S. tax burden "moderate" compared to other countries --somewhat as a doctor might advise a patient suffering from pneumonia in one lung that other people had double pneumonia.

Apparently gone were all hopes of a balanced budget in this generation. In a budget that was itself a great fact--biggest in peacetime, second biggest of all U. S. history--this great fact stood out like a large sore thumb. The budget was a "document full of human meaning," as the Newark News noted. Like the budgets of Mr. Average Citizen, it was full of unjustifiable errors of judgment, of expenses borne out of habit, of big installments still being paid on past mistakes. Like private budgets, too, was its patient, powerless, hopeful meaninglessness: there was no magic in it that would keep the U. S. within its income--just as a budgeted citizen looks over his checkbook and wonders what-the-George all those stubs marked "Cash" went for.

A national debt of 100 billion dollars almost certainly loomed ahead. Ahead too might be inflation, a credit expansion out of sight and beyond control, rationing, priorities, guns-before-butter, taxes to ruin every season in the year. The one thing anyone could be sure of was that the U. S. was humping dizzily up that first clanking climb of the roller coaster on the way to a screaming whoosh beyond. Maybe everything was quiet, pleasant and peaceful on the other side--but people guessed not.

* Now ranging from 25% on the first $20,000 of excess profits to 50% on excess profits above $500,000.

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