Red-Ink Disappointment?

Heading home from Washington for the holiday recess, New Jersey's freshman Senator Harrison Williams echoed the cry of many another Capitol Hill Democrat about President Eisenhower's proposals for a balanced budget in fiscal 1960. The whole notion, said "Pete" Williams, was "mythical." At about the same time last week, Pete Williams & Co. got some studied support for their argument: a staff report from the Joint Congressional Committee on Internal Revenue Taxation flatly predicted that the Eisenhower Administration's hopes for a balanced budget are doomed to red-ink disappointment. Federal income in 1960, said the report, will come to $75.8 billion instead of the $77.1 billion predicted in the President's 1960 budget. If so, a deficit of at least $1.2 billion is inescapable even if Congress votes not a nickel more for outgo than the $77 billion that Ike requested. Actual 1960 spending, the report continued, is likely to reach $80 billion--and that would mean a $4.2 billion deficit.

Firing back, Administration officials said they were "amazed" at the report, insisted that they still expect a 1960 budget balance. Evidence so far this year, announced the Treasury Department, indicates that the income estimates in the President's budget are "sound and well justified."

Whether the Federal Government will wind up in the red in fiscal 1960 also depends on what Congress does about the President's special request for $1.4 billion to meet U.S. International Monetary Fund obligations. Ike wants that $1.4 billion charged to the hopelessly unbalanced 1959 budget, some $13 billion in the red. Many Capitol Hill Democrats, led by Arkansas' Senator William Fulbright, want to list the IMF money in the 1960 budget, which would tilt it heavily out of balance. In predicting a $4.2 billion deficit in 1960, the joint committee report assumed that Fulbright & Fellows would win the argument. Last fortnight the Senate voted 58 to 25 to give Fulbright his way. But last week the House voted 86 to 36 to go along with Ike. That left the decision up to a Senate-House conference committee to settle after the spring recess.

Since the International Monetary Fund outlay will represent $1.4 billion in appropriations whether it is charged to 1959 or 1960, the issue might seem an empty quibble. But it is empty only if the idea of a balanced budget is itself meaningless. The President holds that a 1960 budget balance would be a highly valuable symbol of fiscal soundness, one that could shape the whole U.S. economy. If Congress shifts the IMF appropriation to 1960, it will wreck any hope of a 1960 budget balance--and will destroy the symbol.

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