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Show l fto Comment W , By: James W. Douthat ; WASHINGTON The Treasury's year-end financial report, plus Congressional economy action, clearly reveal the feasibility of much-needed tax reduction. Revenues of the Federal Government are growing with the expansion of the economy. Spending must be restrained therefore, in order to provide a surplus which would facilitate tax reduction. This position has been taken by many business groups. It is evident that such a tax reduction need not be a "nnp.shot" measure, for nue will continue to increase the growth of the economy increases. in-creases. The Treasury report for the fiscal fis-cal year ending June 30 shows a surplus of $1.5 billion the sec-ond sec-ond surplus under the Eisenhow-er Eisenhow-er Administration. The significant figures, however, how-ever, are buried deep in the Treasury report. They show that Treasury revenues as of June 30 were $4.7 billion more than estimated esti-mated when President Eisenhower Eisen-hower submlted his budget on Jan. 16, 1956. Thus, a "cushion" for tax reduction re-duction was provided by the growth of the economy. However, expenditure during this period exceeded estimates by $3.4 billion. bil-lion. CONGRESSIONAL ACTION In spite of charges of "phony" economy, it appears that Congress Con-gress may cut the Eisenhower $71.8 billion budget by more than $4 billion. The latest manifestation of the economy spirit in Congress was the agreement of the Senate-House Senate-House Conference Committee on the Department of Defense budget. I The amount agreed on was $33,758,850,000 for the present fiscal fis-cal year. This was a cut of $2.-308.150,000 $2.-308.150,000 under the Eisenhow-er Eisenhow-er budget. Only a few days before, the House had voted a foreign aid bill totalling $3,116,833,000 for the year. This was $747,000,000 under Mr. Eisenhower's formal request. But it was about $1.3 billion under the originally projected pro-jected foreign aid program. Since the House cut below the Seriate figure, It was possible that a compromise would place foreign aid spending somewhat above the House authorization. After the authorization bill Is passed, the actual appropriation must be voted. ADMINISTRATION PLANS Meanwhile, the Elsenhower Administration Ad-ministration appeared determined determin-ed to put Into effect some real economies In government. This attitude was, In effect, (1) a response to the nationwide demand de-mand for economy and (2) a belief be-lief that cut In government opcTiuirig was uesimule as ft brake on Inflation. The Bureau of the Budget, acting act-ing for the President, opened the administration economy drive by urging government departments to keep expenditures at last year's level where possible. Last year's level was about $2 billion under the Eisenhower budget. Secondly. Secretary of Defense Wilson, whose department spends more than half the federal feder-al budget, inaugurated economy moves. Included was a planned reduction of 100,000 in the armed forces. BRINGING GOVERNMENT BACK HOME Mr. Eisenhowar took another step in his campaign cam-paign to shift some responsibilities responsibili-ties from the Federal Government Govern-ment to state and local governments. govern-ments. . ' He named a committee of seven sev-en federal officers, including three Cabinet members, to cooperate coop-erate wUh a 10 member committee com-mittee of the Conference of Gov-ernors. Gov-ernors. The duty of this group is to canvass the multi-billion dollar Federal grand-in-aid program, and find ways to reduce it. Mr. Eisenhower made his proposal for a joint federal state commh i tee at the recent Governor's Conference. Con-ference. While the subject of federal grants-in-aid has been studied by Congressional committees, the Hoover Commission and the Commission on Intergovernmental Intergovernmen-tal Relations, Mr. Eisenhower believes be-lieves that further effort Is necessary. |