| Show ext ext of Message on Budget Sent Congress by bil President Roosevelt AsHINGTON Jan 5 UP ip text of President Roosevelt's l sage submitting the federal federalS S get for the fiscal year being beng be- be ing ng July 1 1938 0 OS the congress of the United te tes to provisions of law lawS S herewith the budget of S S United States government for fiscal year ending June 30 S J together with this message ch h is a part thereof The esti esti- Q es s have been developed after I lysis of the revenues obliga- obliga l and reasonable needs of the t and nd I recommend ap- ap for the purposes detailed herein simple fairness to the trea- trea i of the United States I am f dent that the congress and will bear in mind fundamentals relating to the theof I. I king king of the national budget She first step calls for the pres- pres bon before the of Sep Sep- ber by every department and 3 ncy ncy head of estimates of ap- ap for the fiscal year I 1 1 tinning inning nning the first day of the fol- fol fing ing ng July July July-in in other words at att j t nine months before the riding of the money can be be- These estimates carefully pared by the budget officers I other officials of each depart- depart pt n nt and agency are intended to Present resent what they consider the needs of the work as- as ned to them by law Outgo and Revenue led the director of the presents these totals to who without taking the thousands of separate is asks the secretary of the J ury for estimates of the to- to amount of tax x receipts which ee ee J government may obtain dur- dur the 12 months beginning nine later This estimate by J I secretary of the treasury is him by service civil-service ex- ex ts who have standing long-standing ex- ex ence with the whole subject forecasting economic conditions what may well be called the ret rete rete re- re t te future These experts prop- prop y YA call attention to the fact t they are asked to guess what a t economic status status and and there- there e e the tax receipts will receipts will be dur- dur Ithe the fiscal year beginning the st of the following July If the forecast of tax receipts ade by these experts who are t. t least of equal competence the experts of the largest anks and industrial corpora- corpora ions ns of the United States show at the departmental estimates if expenditures will ill exceed the d tax receipts the l lent nt instructs the director of h he h-e e budget to make every pos- pos ible effort as a result of his to pare the depart- depart estimates in order to ree rence re- re nce uce e the total the months of November and after the hears hear- hear s 5 have been held by the di- di tor of the budget he presents the president the total estites esti- esti ites tes with his recommendations Ethe I I Law Fixes Duties gain the president obtains m m In the treasury department a kup on n estimated revenue Z ng the year beginning the fol- fol ting ring first of July If the new i ort shows a probable falling faIling of of revenue he makes further before approving the theal theat at al II departmental and agency gets ge ts t t should hould be remembered that 1 laws provide that the de- de and agencies shall carout car- car rout out ut certain duties By these theses vs s a the president and arid the lo ot the budget are in effect from eliminating gov- gov ent functions or curtailing 1 to the point of ineffective- ineffective I ss S. S e result is that the president dl dJ the director of the budget five ye va at a figure for each depart- depart ant ent and agency which they bee beve be- be ve vl e to be the proper amount un- un which the functions required law can be carried out with efficiency During the final two vo weeks of ofIe ofie ofte ie te calendar year ear the president once more from the department its final of tax revenues dur- dur g the fiscal year which bes beM be- be s M more than six months t ter r. r i 3 nce the tax revenues from fromi i every major source ded deia de- de id ia d on business conditions dur- dur future fiscal year the figures of necessity on a prophecy of busis' busis busi- busi 35 s' s conditions beginning six hs later and ending 18 later I Little Flexibility Business concerns are more for for- ate te They also lay layout out proms pro- pro ims ms months and even a a. year yeara dja Ia a half in rn advance But their grams are flexible They are trolled currently by the con con- of business which permits the making of necessary changes from month to month and even from week to week The affairs of the government are not so flexible The budget reports are the administrations administration's fiscal plan and in the form adopted adopt adopt- ed by the congress during the winter and spring it becomes practically a fixed program of expenditure which cannot be changed for many months even though economic conditions radically radically rad rad- change the receipt side of the ledger While I reemphasize the difficulty difficulty culty of ot estimating the revenue of ot the federal government from six to 18 months before that revenue flows in there is satisfaction in knowing that during the past four years the estimates of tax receipts thus made far in advance advance ad ad- vance have been infinitely more accurate as proven by the final result than in the preceding years Estimates remain a prophecy y but our prophecies have been far better borne out by later events than prophecies of earlier years Fixed Charges Heavy It is also worth while to call can the attention n of the congress and the public to the fact that a very large proportion of our total expenditures represent f fix fixed I x e d charges which cannot be reduced by executive action T The These Ii e s e charges are obligatory on the president and the treasury and include interest on the public debt military and naval pensions contributions to retirement funds and to the old age reserve account account account ac ac- ac- ac count and many grants in aid to states Another class of expenditures which though subject to some measure of administrative control control control con con- does not afford opportunity for large reductions is made up of those which carry carryon on the normal normal normal nor nor- mal everyday operations of the government For example the major part of the appropriations for the state department is re required required required re- re to pay the reasonable salaries salaries salaries sal sal- aries of consuls diplomatic agents secretarial staffs and ministers who represent American Ameri Amen can interests in every part of the world The third type of expenditure is represented by the major ef effort effort effort ef- ef fort of the government to help the economic security of large groups of citizens in every part part of the country who for many reasons definitely require some form of government assistance This includes various kinds of aid to save farms and homes from foreclosure to furnish work relief for needy unemployed and to provide old age pensions unemployment insurance a and n d dother other assistance under the social security ity program Obligations such as these though large in amount can be reduced only by depriving a A very cry large proportion of our population population population tion of benefits which modern civilization insists on The final category includes items of public expenditure for capital improvements such improvements such as new highways new river and barbar harbor harbor har bar bor bar projects new flood control new public buildings new reclamation reclamation reclamation mation projects and other new works All of these items can an be contracted or expanded to conform with the contraction or expansion of government income This year ear I recommend that such items be curtailed First because because because be be- cause expected government Income in income income in- in come will Mill be less and second because it has been amply demonstrated demonstrated dem dem- that they do not provIde provide pro pro- vide vido as much work as do other methods of taking care of the unemployed For example we have appropriated appropriated as federal aid to new permanent state highways almost during the past five years and an equal sum has been spent during the same period for constructing repairing and Improving improving improving im im- Im- Im proving roads and streets by federal federal federal fed fed- eral agencies administering unemployment unemployment unemployment un un- un- un employment relief These vast expenditures have put our highway highway highway high high- way systems far in advance of ot what would have been normal expansion I do not propose eliminating elim elim- mating federal aid to highways but I do ask that such aid be re restored restored restored re- re stored to approximately the pre pre- depression figures Economy Urged We e have a great accumulation of matching authorizations authorizations au au- au- au for aid to states running running running run run- ning into the year 1910 but 1910 but the states also should be encouraged to bring their highway budgets back to a more normal figure Therefore I hope that the congress congress congress con con- gress will start at this session to cut down the actual appropriations used to match state funds fund For the 10 years up to June 30 1933 the federal government spent an average of a year for river and harbor improve improve- ments During the past five years we have spent an average of over a year Meanwhile Meanwhile Meanwhile Mean Mean- while a justified demand for greater protection against floods has developed Flood protection is is necessary and in this budget I Iam Iam Iam am am curtailing the estimates for new river and harbor Improvements Improvements Improve Improve- ments meats in order to provide more money for flood emergencies reclamation projects have been started which will call calI for future appropriations of nearly It seems Jeems obvious to me and andI I hope it will be to the congress that no further projects should be authorized until projects now under under under un un- un- un der construction have reached a substantial stage of completion During the past five years we have built more than 1100 new federal buildings buildings almost almost doubling doubling doub doub- ling the number of such buildings throughout the country To Curb U. U S. S Building It i Is i. true that this saves the renting of buildings but hut to offet offset off- off set et et that saving laving we are paying Inmany in inmany ran many cases far more for mainA main main- A of these new buildings than we formerly paid for leasing leasing leasing leas leas- ing private quarters Except for meeting the problem problem lem of adequate housing for government departments and agencies in the District of Columbia I am strongly of the opinion that the public building program should be restricted to the comparatively small number of projects where the capital in investment investment in- in vestment estment will be returned through savings saYings in annual operating operating oper open costs I EXPENDITURES The most important fact of this budget is the reduction of in the estimated expenditures for the fiscal year 1939 They amount to compared with estimated expenditures during the current fiscal year of 1938 of It is hoped that this fact will not be overlooked It is fair fair to say that this estimated reduction may by force of circumstances become smaller smaller- because of future events which today cannot defini definitely tely be foretold I refer specifically to the possibility possibility pos pos- that due to world con con- over which this nation has no control I may find it necessary to request additional appropriations for national de le- le Furthermore the economic situation situation situation sit sit- may not improve improve and and if it does not I expect the approval of congress and the public for additional additional ad ad- appropriations if they become necessary to save thousands thousands thousands thou thou- sands of American families from dire need REVENUES During REVENUES During the first 10 months of the calendar year 1937 business conditions improved materially and it was the consensus consensus consensus con con- of opinion in government and in business circles that the improvement would be maintained maintained main main- tamed in 1938 There was every reason to expect that the revenues revenues revenues rev rev- for the fiscal year 1939 would be greater than the expected expected expected ex ex- ex- ex revenues for 1938 and that with a reduction in the cost of relief the total expenditures for 1939 would greatly decline That was the basis for our expectation of a balanced budget for the fiscal year 1939 The recent recession in business business business busi busi- ness has changed that outlook Today it is necessary to revise the estimates of revenues They will be less than we had anti anti- They will wilI as far as we can tell remain below our estimated estimated estimated esti esti- mated necessary expenditures We Ve hope that the calendar year 1938 will bring an improvement in business conditions and therefore therefore therefore there there- fore in tax receipts The treasury treasury treasury trea trea- sury leaning to the conservative side predicts some improvement over the present level but does not assume in its figures that business in the calendar year 1938 will reach as high a l level vel as Inthe in inthe inthe the calendar year 1937 Deficit Estimated The present estimate of revenue for the fiscal year 1939 is compared with the present estimate of receipts for the fiscal fiscal fis fis- cal year 1938 of or in other words a falling off of BALANCE The BALANCE The net result of these estimates of expenditures and receipts shows for the fiscal fiscal fiscal fis fis- fis- fis cal year 1939 a net deficit of of bu but it is fair to state at the same time that this deficit will be less than the expected deficit in the the current fiscal year In other words for forthe forthe forthe the third year in succession we would continue to decrease the deficit It will be of interest to compare compare com corn pare the major classes of at receipts and expenditures for the fiscal years 1931 to 1939 as set forth in inthe inthe inthe the following tables Table A shows estimated and Table B actual receipts and expenditures of the government Classifications include expenditures expenditures ex ex- from both general and emergency emer emner- gency sency funds lunds RECOMMENDATIONS ll Appropriation Item Veto An important feature of the fiscal procedure in the majority of our states is the authority given to the executive to withhold approval of individual items in an appropriation appropriation appropriation bill and while approving approving approving ing the remainder of the bill biU to return such rejected items for the further consideration of the leg leg- This grant of power has been considered a consistent corollary corollary cor con of the power of the legislature legislature legislature legis legis- lature to withhold approval of items in the budget of the executive executive executive tive and the system meets with general approval in the many states which have adopted it A respectable difference of opinion exists exist as to whether a similar item veto eto power could be he given ghen to the president by legislation or whether a constitutional constitutional amendment would be necessary necessary I strongly recommend recommend recommend mend that the present congress adopt whichever course it may deem to be the correct one Commodity Credit Corporation At At present the funds for the operation of the Commodity Credit Cred Cred- it corporation are pro provided vi d e d through allocations from the Reconstruction Reconstruction Reconstruction Re Re- construction Finance corporation Such losses as the Commodity Credit corporation may sustain upon its commodity loans remain an indefinite charge |
