For 1936

The 17,300,000 votes for the New Deal, cast by U. S. citizens on Nov. 6, gave Franklin Roosevelt a mountain' of political prestige. Last week he used it all when he presented Congress with his 1936 budget. Without ostentation he dropped one pregnant sentence into his message: "I recommend that $4,000,000,000 be appropriated by the Congress in one sum, subject to allocation by the Executive principally for giving work to those unemployed on the relief rolls."

For a President to ask his fellow citizens to give him such a sum for disposal as he saw fit was without precedent. To most citizens, however, it did not come as a shock. Most of them would undoubtedly prefer to trust him, rather than Congress, with $4,000,000,000. What made that one casually sensational sentence historic was that, if Congress gives the President what he wants, the centre of authority in the U. S. will shift far from the point where it has reposed for a century and a half. In the long range picture no other part of the budget message had a tithe of the significance of that one sentence. Yet, in immediate import, other budget points cut a far wider swath in the news.

No balance. Said President Roosevelt last week: "In the budget message of last year I said, speaking of the fiscal year 1936, that we should plan to have a definitely balanced budget for the third year of recovery. . . . 'We have not yet reached a point at which a complete balance of the budget can be obtained."

The President followed that conclusion with a momentous statement: "I am, however, submitting a budget for the fiscal year 1936, which balances except for expenditures to give work to the unemployed. If this budget receives the approval of the Congress, the country will henceforth have the assurance that, with the single exception of this item, every current expenditure of whatever nature will be fully covered by our estimates of current receipts. Such deficit as occurs will be due solely to this cause, and it may be expected to decline as rapidly as private industry is able to re-employ those who now are without work."

More disturbing to those who hunger for a balanced budget was the fact that in this year's budget message, unlike last year's, the President set no date, however remote, for balancing the budget, proposed no means, however vague, for doing so. Instead, he left the question of ending recurring deficits to such time as private industry may re-employ the unemployed. And his work relief plans meant that the per capita cost of maintaining the unemployed would continue on a scale greater than ever before.

Taxes. "I do not," said President Roosevelt, "consider it advisable at this time to propose any new or additional taxes." The object of his budget-unbalancing would, in fact, be impaired by new taxes because the inflationary effect of huge government spendings would be offset by the deflationary effect of higher taxes. Nonetheless he made his desire plain: the nuisance taxes which automatically expire next summer must be re-enacted, the 3-c- rate for non-local first class mail must be continued.

Economy. Another word of caution did the President speak lest Congress, emboldened by his big spending plans, end all economy measures. He asked that such Depression economies as still survive be continued. Comparatively trivial, they include reduced fees for jurors and witnesses in Federal courts, reduced travel allowances for postal employes, no re-enlistment bonuses for Army and Navy, enforced retirement of government employes after 30 years' service, as well as $6,000 less a year for Vice President Garner's official automobile. Nor did he want the 5% pay cut to which Federal employes are still subject restored before July 1.

Public debt. At the end of fiscal 1933, four months after Franklin Roosevelt took office, the U. S. Public Debt was $22,538,000,000. A year later, at the end of fiscal 1934, the public debt was $27,053,000,000. If his forecast made in his budget message a year ago came true, the public debt next June at the end of fiscal 1935 would be $31,834,000,000. Last week he revised that estimate because New Deal spending had gone more slowly than he expected, set it at $31,000,000,000. For the close of fiscal 1936 he set a new high figure: over $34,239,000,000.

Bookkeeping. One conservative sign observers noted in this year's budget message--a tendency to treat figures more as they were treated under Coolidge and Hoover. The budget for fiscal 1936 calls for expenditures of $1,622,000,000 for the Government's running expenses, an increase of nearly 50% over fiscal 1934. One part of this increase is caused by the restoration of Government pay cuts, by vastly more Government employment under the New Deal, by larger appropriations for the Navy. Another part is caused by more realistic bookkeeping. Example: $200,000,000 is added to the ordinary budget by treating some public works as ordinary, not extraordinary expenditures.

Comparison, Most instructive example of the course of New Deal spending was offered by the comparative figures of what the U. S. actually spent and received in fiscal 1934, and the same figures estimated for fiscal 1935 and 1936:

(000,000--omitted)

Expenditures 1934 1935 1936

Running expenses $1,086 $1,235 $1,622

Veterans' pensions 556 610 740

Interest on debt 757 835 875

Tax refunds 63 68 65

AAA 290 788 472

Emergency expenses 3,993 4,472 4,110

Total outlay*6,745 8.008 7,884

Total Revenue /-3,116 3.711 3,992

Annual deficit 3,629 4,297 3,892

*Exclusive of amounts required by law for debt retirement, /-Including processing taxes.

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