TAX REDUCTIONS NOT RECOMMENDED

Rotorua Morning Post, Issue 5301, 14 January 1947, Page 6

TAX REDUCTIONS NOT RECOMMENDED

{Press Assn.—

MR. TRUMAN'S BUDGET HIGHER POSTAL RATES TO MEET DEFICIT

-Rec. 9.30 p.m.)

WASHIN GTON, Jan. 12. Fresident Truman, following Tiis economic report on Thursday, sent.his Budget statement I to Congress for the fiscal ysar beginning July 1, showing an estimated expenditure of 37,500,000,000 .dollars and revenue of 37,700,000,000 dollars, leaving a surplus of 200,000,000 dollars. President Truman strongly recommended Congress to continue the war excise taxes. which would otherwise expire on June 30. He also rcccmmcnded an increase in the postal rates sufficiont to extinguish the postal (leficit, which threatens to be the largest in history. If such a recommendation were adopted the total expenditure would be reduced to 37,100,000,000 dollars, and the revenue increased to 38,900,000,000 dollars, yieiding a surplus of 1,800,000,000 dcllars. Mr. Truman reiterated that a tax reduction was now unjustified. He pointed out that revenue in the next fiscal year would be lower. Security and Economy In summarising expenditure in the fiscal year beginning July 1, Mr. Truman estimated that the interest on the national debt would be 5,000,000,000 dollars, taxation refunds 2,100,000.000 dollars, and dei'ence 11,200,000,000 dollars. M". Truman said this represented a proper fcalance between security and eccncmy. "Though we expect the United Nations to move successfully towards world security, any cut in the present estimate would immediately weaken our international position," he said. Expenditure on international aft'airs and finance was estimated to total 3,500,000,000 dollars, compared with 6,400,000,000 dcllars in the current year. The United States still had contractual commitments in connection with the loan to the TJnited Kingdom and the Export Import Bankj also occupation responsibilities in Europe and the Far East. War damage restoration in the Philippines must be prc-vided for and continued relief given to some other countries in urgent need. The United States must not fail to support the United Nations. Servicemen's Benefits Servicemen's services and benefits would cost 7,400,000,000 dollars. These five items — interest, tax refunds, defence, international affairs and servicemen — required 29,200,000,000 dollars, or four-fifths cf the to-tal Budget. The progranime for the regulation and improvement of the transport and communications systems and the development of natural resources would total 2,600,000,000 dollars. The largest single item of the latter was 443,000,000 dollars fcr the Atomic Energy Commission. "Our major efiort now must be to exploit the peacetime uses of this great discovery," he said. The merchant marine and other aids to transportation would abscrb nearly 1,000,000,000 dollars. The agricultural programme would cost 1,400,000,000 dollars, social welfare, health security and education 1,700,000.000 dollars, Federal housing 539,000,000 dollars. Federal Fay-Poll Heavily Cut The return of war dead from overseas, which was now beginning, was estimated to cost altogether 234,000,000 dollars. The number of Federal civilian employees had been reduced from the peak of 3,770,000 in June, 1945, to 2,300,000. The Budget for the fiscal year beginning July 1 envisaged further personnel reductions. Three Departments — the Post Office, the Treasury and the Servicemen's Administration — ncw had almost as manv employees as were employed by the whole Federal Government in 1939. Mr. Truman obviously does not expect the selective service draft law to be continued after the expiry date of March 31, as no estimate for it is included in the Budget.