Spending Can Be Cut More

June 1, 1953

President Eisenhower’s radio talk of May 19 on the budget, and his tax message to Congress the next day, once more illustrated his deep honesty and earnestness in grappling with our major national problems. Yet his announced decisions, on net balance, must be set down as disappointing.

He is planning expenditures for the coming fiscal year of more than $74,000,000,000. This would be higher than was spent in any fiscal year under Truman. It would leave an estimated deficit under present tax laws of $6,600,000,000. Even if Mr. Eisenhower gets all the tax extensions he is recommending (and most of which are unwise), his proposed expenditures would still leave an estimated deficit of $5,600,000,000.

Do expenditures of more than $74,000,000,000 in 1954 in fact represent an irreducible minimum? Mr. Eisenhower himself has some admirable words to say in this connection: “Words like ‘essential’ and ‘indispensable’ and ‘absolute minimum’ . . . are spent with wild abandon.” Yet his actual spending budget is made up in large part of “absolute minimums” that turn out on examination to be very dubiously minimum. He seems to accept the whole $81,000,000,000 of unspent appropriations from the Truman Administration as irreducible and noncancelable, and his own budget apparently contemplates carrying forward some $70,000,000,000 of unspent authorizations into 1955.

Suppose we disregard the evidence of shocking waste in military expenditures uncovered in the last few years by Congressional committees, and accept all the military-spending estimates as irreducible. The budget still includes expenditures with worse than no economic justification. One need merely point for illustration to the billions spent and to be spent on farm-price supports which make food dearer for the American consumer.

The arguments for expenditure on a major item—the $5,800,000,000 being asked as an additional appropriation for foreign aid—are still rhetorical rather than factual. This is illustrated by General Ridgway’s testimony before the Senate Foreign Relations Committee on May 19. He treated concern for economy with some contempt: “I don’t believe the civil authorities would want me to change my professional judgment as to the minimum requirements I believe necessary just because someone says it costs too much. . . . Money values assume somewhat different importance when all you hold dear is at stake.”

This perhaps misses the point that what we hold most dear may depend for protection just as much on our long-term economic strength as on our immediate military expenditures. The $5,800,000,000 that the President and General Ridgway are asking for foreign aid in 1954 is about the size of the inflationary deficit we are planning for that year. It is fair to point out, therefore, that if this amount were not spent for foreign aid in 1954 we could either avoid the deficit entirely, or avoid the tax prolongations that Mr. Eisenhower himself admits to be unsound. (His judgment on the excess-profits tax is that it “actually penalizes thrift and efficiency and hampers business expansion.”)

The huge foreign-aid program is now costly to our own economic health. And it rests on the very dubious contention that Europe cannot afford to pay for its own defense. This is primarily an economic, not a military, contention; and General Ridgway is not a final authority on its soundness.

It is impossible, of course, to consider the budget without considering the wisdom of specific government policies and attempted functions. Even where it is agreed that the taxpayer’s money should be spent in a given direction, there is always the further question, how much? The present budget quandary once more suggests the need for drastic procedural reforms. Certainly a minimum first step would be the adoption of something like the Coudert resolution (see this column of May 4). We still have a budget system under which responsibility cannot be clearly fixed.