Budget v. Politics

By longstanding custom, the President of the U.S. makes no public pronouncement about his new budget until after he presents it to the newly convened Congress. Last week Dwight Eisenhower deliberately breached the custom by announcing that the budget for fiscal 1960 (beginning next July 1) "will be a balanced budget." Convinced that he is duty bound to combat both price inflation and governmental bloat, the President decided to risk the course urged by Treasury Secretary Robert B. Anderson: take a stand on fiscal responsibility, and let the political chips fall where they will.

Urge v. Surge. Income and outgo, the President announced, will run "in the general area" of $77 billion (TIME, Dec. 29) --an outgo some $2 billion below this year's spending level of $79.2 billion. The Defense Department will actually get an unspecified bit more than the $40.8 billion it is spending this year. "Reductions in total spending," said the President hopefully, "will be achieved in part by reason of the ending of temporary programs in agriculture, unemployment insurance and housing."

But with this year's income estimated at $68 billion, where would next year's $77 billion come from? The President was planning to ask Congress to boost the federal gasoline tax and up the postage on first-class letters from 4-c- to 5-c-, but for most of the added $9 billion, he was counting on the surging economy to increase the income-tax take.

Thrift v. Drift. Capitol Hill Democrats saw quickly that if they started a spending spree they would be opening themselves up to the charge that they had thrown the budget out of kilter. "Dishonest" and "political," cried Tennessee's Senator Estes Kefauver (see PEOPLE). Pennsylvania's Fair-Dealing Senator Joseph Clark accused Administration leaders of the decade's most difficult athletic feat: "hiding their heads in the sand and running away from the facts." Various other Democrats labeled the budget figures "unrealistic," "dangerous," "phony," "disingenuous," "wishful thinking" and "a bookkeeping exercise."

Charges that the new budget was "political" made scant sense in view of the strenuous arguments by some of the President's own Cabinet members that, in the mood of the times, taking a stand on a balanced budget is politically unprofitable (see Republicans). More to the point were the charges by New-Dealish Democrats that, in pushing for a balanced budget, the President was neglecting home-front welfare jobs that needed doing. But implicit in such complaints was an assumption that Dwight Eisenhower explicitly rejects: the assumption that it is the Federal Government's duty to take care of all problems, provide for everybody's welfare.

The drift of both opinion and practice in the 20th century is indeed toward the centralized welfare state, but moving with the drift is not necessarily the fitting role for a nation's leaders. And continued deficit financing, with its burdensome interest charges and its push toward inflation, can only weaken the fiscal underpinnings of an economic system that has done better by more people than any planned economy ever dreamed of.

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