The Budget & The Hill

The U. S. Government ran goo million dollars into the red in fiscal 1931. When April came this year it was 1,885 new millions in the red for fiscal 1932. When April went it was 448 more new millions behind (mostly Reconstruction Finance loans). All these millions--2,333 of them and more to come before June 30--will be lumped with the Public Debt for future generations to pay off.

Months ago President Hoover, obviously endorsed by public sentiment, and joined by even the ill-organized, quarrelsome House of Representatives in its famed standing vote of March 29, resolved that in fiscal 1933 the U. S. must spend no more than it takes in, that the Budget must balance. Three consecutive, mounting deficits would certainly impair the public credit.

Last week, a month after the House's famed rising vote, the prospect of the 1933 Budget being brought to balance by Congress was never more remote. Lobbyists had taken the place of leaders. An atmosphere of confusion and delay permeated the Capitol.

The House passed a new pension bill for War widows. Cost: $100,000,000 in five years.

The House passed a bill to inflate commodity prices by deflating the dollar (see p. 16).

The House finished with the President's economy bill. Out of proposed savings of $210,000,000 it agreed to only $30,000,000. "It goes to prove," said the defeated Democrat in charge of the bill (Alabama's McDuffie), "that . . . representative government is dead."

The Senate Finance Committee was still fumbling fruitlessly with the House's jumbled tax bill. After two weeks fumbling the Senators were dismayed to find their bill still 100 million shy of the mark.

"Will of the Country." Since Congress convened in December, President Hoover had made 20 public statements on Economy & Taxation. Suddenly, sharply he now sent up Capitol Hill a 21st pronouncement. Said he:

''Fear and alarm prevail because of events in Washington which have greatly disturbed the public mind. . . . Nothing is more necessary than balancing the Budget. Nothing will put more heart into the country than prompt and courageous and united action. . . . The details plainly require: 1) prompt enactment of a revenue bill ... to distribute the burdens equitably; 2) a drastic program of economy . . . $230,000,000 below the executive budget. . . .

"The Government cannot be dictated to by organized minorities. ... I know these actions do not reflect the will of the country and I refuse to believe that the country is unable to reflect its will in legislation."

Democrats, writhed and winced. Hotly they retorted that this message was the President's first campaign speech for reelection. Nevertheless, the outlook for Economy & Taxation suddenly cleared on Capitol Hill. Within a few hours the following took place:

The House, in committee, finally rejected all plans for paying off the Soldier Bonus in cash ($2,400,000,000 in addition to all other billions).

The Senate, in committee, met with Secretary Mills and in three hours whipped together a compromise tax bill which, he said, "should assure a balanced budget in the sense that there will be no additional borrowings during 1933."

For the moment, Capitol Hill seemed safe for Public Credit.

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