In the Sweet By and By

November 6, 1961

Let me repeat so there will be no mistake: The President intends to submit to Congress next January a balanced budget for fiscal 1963.

Secretary of the Treasury

Douglas Dillon, Oct. 17.

This pledge is reassuring. Yet the record of the past makes it less reassuring than it could have been. In January President Eisenhower estimated a surplus for the fiscal year 1962 of $1.5 billion. In March Mr. Kennedy said that, instead, there would be a deficit of $2.8 billion. Then the official estimate was raised to a deficit of $3.7 billion. In July it was raised again to $5.3 billion. On Oct. 29, the Budget Bureau estimated the deficit would be $6.9 billion.

If the estimated budget deficit even for the current fiscal year is to be raised by another billion dollars or so every couple of months, what real assurance can we have that the President will present a balanced budget estimate next January and that, come June 30, 1963, such a balance will in fact be realized?

It is argued that the estimated budget deficit has had to be unexpectedly raised in recent months because of the Berlin crisis and the need to increase defense spending. But even if we accept every dollar of our military spending as absolutely necessary, most of our annual Federal expenditures—more than $50 billion, if we include social security—are for civilian purposes.

NON-DEFENSE BUDGET

This includes all the dubious billions spent on foreign aid or farm price supports. It includes all the new billions recommended in the 50 or so messages that President Kennedy has so far sent to Congress. When a prudent individual finds that he has to spend more on some unexpected emergency, such as illness in his family, he normally cuts down his spending on something else. But the Kennedy Administration, instead of reducing its civilian spending plans when faced with a bigger defense budget, keeps adding to them.

Making a scapegoat of defense spending has, in fact, become a shopworn device. On Jan. 4, 1940, President Roosevelt said: “For several years we have been compelled to strengthen our own national defense. This has created a very large portion of our Treasury deficits.”

If it is possible to balance the budget, why must we wait until fiscal year 1963? Why not try it in the current fiscal year, which still has eight months to run? Why can the budget never be balanced this year but only in some sweet by-and-by?

NEVER THIS YEAR

I raised this question in a Newsweek column (Nov. 2, 1953) and cited the sad record of three Administrations. Space permits only a few elliptic quotations:

Franklin D. Roosevelt: “I give you assurance that . . . within a year the income of the government will be sufficient to cover the expenditures of the government”—March 10, 1933. “We approach a balance of the national budget”—Jan. 3, 1936. “If [the national income] keeps on rising at the present rate, as I am confident it will, the receipts [of the government] . . . within a year or two, will be sufficient . . . to balance the annual budget”—Oct. 1, 1936. (The budget was never balanced in any of the twelve years that FDR was in office.)

Harry S. Truman: “The budget for the fiscal year 1949 . . . will balanced . . . and provide $4.8 billion which should be used to reduce the public debt”—Jan. 12, 1948. (There was actually a deficit of $1.8 billion.)

Dwight D. Eisenhower: “The first order of business is the elimination of the annual deficit”—Feb. 2, 1953. (There was a deficit for fiscal 1953, fiscal 1954, and fiscal 1955.)

In the last 31 years there have been 25 deficits. As I concluded my column of eight years ago: “Each President began with pious promises of a budget balance, but there were always reasons why this could be done only in some indefinite future and not now. Meanwhile, the national debt keeps mounting and the purchasing power of the dollar keeps shrinking and a Republican budget director is warning against ‘the disturbing effects on the economy’ of spending cuts that are ‘too abrupt’.” Isn’t this where we came in?