How to Cut the Budget

January 26, 1953

No one will take Mr. Truman’s budget for the fiscal year 1954 very seriously, and there is no reason why anyone should. It is, to begin with, a legal absurdity that an outgoing President should be required to frame and present a budget for a year in which he will not be in office and for which he cannot and should not assume any responsibility. Mr. Truman’s budget estimates even for years in which he was in office were hopelessly wide of the mark. He overestimated expenditures for the current fiscal year, according to his revised estimates, by some $11,000,000,000.

But the budget for 1954 is not irresponsible merely because Mr. Truman framed it. As I have pointed out repeatedly in this column, we have an irresponsible budget system. It will continue to be irresponsible as long as Congress insists on the right to increase appropriations, even beyond those the President asks for.

Meanwhile, promises of substantial budget cuts cannot be taken too seriously. The economizers have become timid even in their talk. The “economy extremists” among Republicans hardly dare mention a cut of more than $10,000,000,000. Yet if we take the Truman estimates at face value, we confront a deficit of $10,000,000,000 in the fiscal year 1954 even if we continue all present taxes. If we allow the excess-profits tax to expire on schedule this June 30 (and the termination of this tax is essential to the health of the economy) it might require a slash of $12,500,000,000 in proposed expenditures to balance this 1954 budget.

Contrary to most of what is now being written, it should not be at all difficult or dangerous to make such a slash. When General Eisenhower last June ventured the opinion that the Federal budget could be cut as much as $40,000,000,000 in the next few years, he was scolded even by Senator Taft. But is that goal really so extreme? After all, even in the fiscal year 1951 expenditures were $30,000,000,000 less than the estimate for the present fiscal year. In the fiscal year 1950 expenditures were $38,000,000,000 less than estimated expenditures for the fiscal year 1954.

Two main lines of argument are now put forward against serious economy efforts. One is the familiar device of treating every expenditure as sacred to which the label of “defense” can be plausibly attached. This is like a spoiled son’s argument that it is unreasonable to ask him to cut down his spending at the Twenty One Club or the Chambord Restaurant because a fellow has to eat. No one, it is true, could say prior to an investigation by experts just how much our military expenditures could now be safely cut. But what we do know is that almost every Congressional investigation of military expenditures in the last few years has revealed shocking lavishness and waste.

It is doubtful, moreover, whether whole allegedly sacrosanct categories of expenditures, such as the $7,800,000,000 budget for foreign economic and military aid, can be justified even in principle. The real argument put forward for the military aid is in fact not military but economic. It is the plea that European nations cannot afford to pay for their own defense. The evidence behind this plea has been far from convincing.

The second main line of argument against substantial budget cuts is that enormous sums have already been appropriated or “committed.” But Congress is not impotent. It can review unexpended appropriations, direct that some of them be used in lieu of new appropriations, or authorize the President to curtail expenditures by executive and administrative orders. The amounts that really have been morally and irrevocably committed by Congress are far smaller than most of the present estimates.

Space unfortunately does not permit me to discuss the various procedural reforms recommended by Senator Byrd, Representative Coudert, and Herbert J. Miller of the Tax Foundation, to make our Federal budget more responsible and controllable. But if the will to economy exists, the way is certainly not closed.