| Show President Says Recession i Prevented Budget Balance Balanc f Curtailed Expenses s Set Up as Go Goal l f r rin in Message i By LYLE C. C WILSON T WASHINGTON Jan 5 5 UP President Roosevelt reported report d to congress today that he had clamped brakes on spending In inan in inan an unsuccessful effort to b bal balance lance lance l- l ance budgets dislocated by bus business r iness mess recession Air Mr Roosevelt estimated the net deficit for this 1938 fiscal ye year r at and for the 1939 fiscal year ear at with with the prospect that each e ch will wj be greater He proposed pork barrel economies economies economies econ econ- which invite trouble on Capitol Cap itol hill hilI The president explained that re recession recession re- re cession tremendously had reduced Text of Message on Page C Z T I-T- revenue and prevented budget bal balancing despite economies economics of so las fat this year year- and in next years year's outlay y Urges Tax Revisions He believes that business will wn im im- improve improve prove prove- some put hut p probably bably not regain re regain re gain its 19 1937 7 levels in 1938 He based his budget on existing tax rates but recommended changes to relieve hardships I hope that there may be enacted enacted enacted en en- acted at an early date he informed congress such amendments to the revenue law as will maintain the revenue producing power of the present tax structure while correcting correcting correcting correct correct- ing at the same time existing proven He asked for a record-breaking record peacetime national defense of more than and another for work relief in the next fiscal year He said the national debt would rise I Ito to by June 30 1939 Budget Balance Fails In attributing failure to balance the budget to business recession Mr Roosevelt emphasized that the 1938 and 1939 deficit figures are tentative and subject to considerable considerable consider consider- able expansion with consequent further increase of the national debt because 1 I r may find it necessary to request additional appropriations appropriations' for national defense 2 The economic situation m y not improve improve and and if it does not I expect the approval of of congress congress congress con con- gress and the public for additional additional addi add funds if they become necessary necessary necessary sary to save thousands of American American American Amer Amer- ican families from dire need The alternative to greater deficits under those circumstances would be increased taxes To Reduce Spending The 1939 budget proposed to re reduce reduce reduce re- re duce spending by which Mr Roosevelt regards as the most important fact in the bulky volume This is achieved largely by cutting items dear to congress such as highways new public buildings new reclamation and rivers and projects Those recommendations head Mr Roosevelt toward a battle with con congress gress which last autumn refused Continued on Page Pale Two i Column Four your ft Federal Economy Asked In M Message s age on Budget Continued from Page One even to consider the highway fund reduction which he proposed again today Skyrocketing national debt has created its own tremendous overhead overhead overhead over over- head so that this budget carries an item of for Interest payments the third largest appropriation appropriation appropriation in the budget exceeded only by national defense and work re re- re lief liet Interest on the public debt has risen from in 1932 To Cease Borrowing Mr Roosevelt announced also that the government would cease after June 30 1938 borrowing additional funds in the open market Its offer offer- capital and authorize it to raise its own funds by issuing bonds guaranteed by the United States The Credit corporation now obtains obtains' obtains obtains obtains' ob ob- its funds from the R F C. C The impact of ot business recession on treasury revenue was reflected in Mr Roosevelt's estimate that receipts receipts receipts re re- re- re in iii the 1939 fiscal year would be down from the expected this year and only slightly more than the collected in the 1937 fiscal year C Chops ops Expenditures Mr Roosevelt budgeted 1939 fiscal fiscal fiscal fis fis- fis- fis cal year expenditures exclusive of debt retirement at compared with estimated estimated estimated esti esti- mated for this year and in the 1937 fiscal year Although this budget estimated for diminishing revenue for the first time since the fiscal year 1932 Mr Roosevelt found much satisfaction in the successive reductions of ot deficits deficits deficits def def- from the of the fiscal year 1936 to 2707 in 1937 and 1 O estimated estimated for forth forthe forthe th the cUrr current nt fiscal year to estimated for the fis fiscal al year 1939 ings to banks private investors and others will be limited to refinancing operations exclusively For new money the government will borrow from itself by investing in special issues of government obligations obligations obligations funds accruing from the theold theold theold old age reserve account the railroad railroad railroad rail rail- road and government re retirements retirements retirements re- re funds and from the unemployment unemployment unemployment trust rondo rand As a result of these investment operations Mr Roosevelt said The treasury financing for the fiscal fiscal fiscal fis fis- fis- fis cal year 1939 would be confined to refunding maturing obligations Invest in Own Funds By June 30 SO 1939 Mr Roosevelt expects the public the federal re reserve reserve reserve re- re serve system government agencies and government trust funds to hold of national debt bonds while special issues held by the old age reserve account unemployment veterans' veterans railroad retirement em em- retirement and end other ac- ac accounts or funds will hold of the bonds which the government government government gov gov- in effect will owe itself Dipping deeply into categories of ot expenditure cherished by congress Mr Roosevelt proposed major economies economies economies econ econ- as follows 1 Cut the highway fund in m half and fix expenditure ultimately at all about annually Request congress at this session to cut appropriations accordingly and urge state governments governments governments gov gov- to bring their highway budgets back baek to normal pre depression de- de levels To Cut Appropriations 2 Cut appropriations for new rivers and harbors projects from to provide adequate flood control but for the time being limit rivers and harbors harbors harbors har har- bors work substantially to maintaining maintaining maintaining main main- existing channels and improvements Im im- 3 Cut reclamation appropriations appropriations appropriations from to defer authorization of f additional additional additional addi addi- projects until projects now under construction are substantially substantially substantially complete Projects thus to tobe tobe tobe be completed ultimately will re require require require re- re quire future appropriations of e 4 4 Cut public buildings appropriations appropriations appropriations from to 53 and except for federal and District of Columbia construction construction construction tion limit all building to projects where the capital Investment will willbe willbe be returned return d through savings in annual operating costs The president president president dent pointed out that many new buildings cost more to operate than formerly was paid for rented Economies Offset These proposed economies with witha a cut of ot in unemployment ment relief spending next year and smaller slices generally through the the federal structure are offset somewhat by increases notably in national defense crop loans and interest interest interest in in- terest payments In all deficit estimates Mr Roosevelt Roosevelt Roosevelt Roose Roose- velt left a loophole for tor reduction by of ot gold The treasury treasury treasury treas treas- ury holds which could be us used d for current expenses or debt retirement at any time In addition addition addition addi addi- tion the budget message reported approximately in cash in its working balance Mr Roosevelt did not reveal whether he would ask a deficiency appropriation this winter to carry the unemployment burden which may reach a peak load of In February Two Recommendations 1 Legislation or a constitutional constitutional constitutional amendment to permit the president to veto selected items in any appropriation bill without vetoing the entire bill Vetoed items would be returned to congress congress congress con con- gress for further consideration 2 Provide the Commodity Credit corporation with adequate |
