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Show Highway and Reclamation Cuts Urged Record-Breaking Peace Time National Defense De-fense Appropriation Requested; Business Recession Blamed For Budget Failure BY LYI.E C. WILSON Hulled Press Staff Correspondent WASHINGTON, Jan. 5 President Roosevelt reported report-ed to congress today that he had clamped brakes on spending ; in an unsuccessful effort to balance budgets disclocated by business recession. Mr. Roosevelt estimated the net deficit for this (1938) fiscal year at $1,088,129,600 and for the 1939 fiscal year at $949, 000,000 with the prospect that each will be greater. He proposed pork barrel economies which invite trouble on Capitol Hill. s - budgets back to normal pre-de-pres levels. 2. Cut appropriations for new river and harbors projects from $81,200,000 to 560,000.000; provide adequate flood control but for the time being limit rivers and harbors work substantially to maintaining existing channels and improvements. improve-ments. 3. Cut reclamation appropriations appropria-tions from $69,500,000 to $60,400.-00; $60,400.-00; defer authorization of additional addi-tional projects until projects now under construction are substantially substan-tially complete. Projects thus to be completed ultimately wi'll require re-quire future appropriations of $600,000,000. Economics Proposed 4. Cut public buildings appro-1 appro-1 piiations from $74,400-000 to $53,-! $53,-! 200,000 and except for federal : and district of Columbia construction, construc-tion, limit all building to projects where the capital investment will be returned, through savings in annual an-nual operating costs. The president presi-dent pointed out that many new buildings cost more to operate than fomerly was paid for rented quarters- These proposed economies, with a cut of $493,000,000 in unemployment unem-ployment relief spendWig next year and smaller slices generally rough the federal structure, are offset somewhat by increases, notably in national defense, crop loans and interest payments. In all deficit estimates, Mr. Roosevelt left a loophole for reduction re-duction by de-sterilization of gold. The treasury holds $1,227,690,805 wl'jh could be used for current expenses ex-penses or debt retirement at any time. In addition, the budget message reported approximately $91,331,000 in cash in its working balance. The hudget message made two legislative recommendations: 1. Legislation or a constitutional constitution-al amendment to permit the president presi-dent to veto selected items in any appropriation bill without vetoing the entire bill. Vetoed items would be returned to congress for further consideration. 2. Provide the Commodity Credit corporation with adequate capital and authorize it to raise its own funds by issuing bonds guaranteed by the United States. The Credit corporation now obtains its funds from the RFC. Impact of business recession on treasury revenue has reflected in Mr. Roosevelt's estimate that receipts re-ceipts in the 1939 fiscal year would be $5,919,437,000, down $401,000,000 from the $6,320,500,-000 $6,320,500,-000 expected this year and only slightly more than the $5,293,-800,000 $5,293,-800,000 colected in the 1937 fiscal year. Mr. Roosevelt budgeted 1939 fiscal year expenditures, exclusive of debt retirement at $0,869,043,-j 000 compared with $7,408,600,- j 000 estimated for this year audi $8,001,200,000 in the 1937 fiscal year. ! Although thl'3 budget estimated1 for diminishing revenue for thei first time since the fiscal yearl 1932, Mr. Roosevelt found much, satisfaction in the successive reduction re-duction of deficits from the $4,-360,600,000 $4,-360,600,000 of the fiscal year 1936, $2-707.400,000 in 1937, $1,088,100,-000 $1,088,100,-000 estimated for the current fiscal year to $950,000,000 estimated for the fiscal year 1939. "There was every reason to expect ex-pect the revenues for the fiscal year 1939 would be greater than the expected revenues for 1938 and that with a reduction in the cost of relief, the total expenditures expendi-tures for 1939 would greatly decline. de-cline. That was the basis for our expectation of a balanced budget for the fiscal year 1939. Revenue Rtlueed The president explained that re cession tremendously had reduced revenue and prevented budget balancing despite economies of. $397,000,000 so far this year and $539,000,000 in next year's outlay. He believes that business will i improve some but probably not I regain its 1937 levels in 1938. He based his budget on existing tax rates but recommended changes to relieve hardships. "I hope that there may be enacted en-acted at an early date," he informed in-formed congress, "such amendments amend-ments to the revenue law as will maintain the revenue producing power of the present tax sLruc- ture wbile correcting at the same time existing proven inequities." Ask Defense Appropriation He asked for a record-breaking peace-time national defense appropriation ap-propriation of more than $1,000,-000,000 $1,000,-000,000 and another $1,000,000,000 for work relief in the next fiscal year. He said the national debt would rise to $38,528,200,000 by June 30, 1939. In attributing failure to balance the budget to business recession, Mr. Roosevelt emphasized that the J938 and 1939 deficit figures are tentative and subject to considerable consider-able expansion with consequent further increase of the national debt, because: For new money the government govern-ment will borrow from itself by investing in special issues of government gov-ernment obligations, funds accruing accru-ing from the old age reserve account, ac-count, the railroad and government govern-ment employes, retirement funds and from the unemployment trust fund. Cut Highway Fund Dipping deeply into categories of expenditure cherished by congress, con-gress, Mr- Roosevelt proposed major economies as follows: 1- Cut the $280,000,000 highway fund in half and fix expenditure ultimately at about $100,000 000 annually. Request congress at thi-s session to cut appropriations accordingly; and urge state governments gov-ernments to bring their highway |