Barrel No. 1

On the train ride home from his neighborly visit to Ottawa (see CANADA), Harry Truman paused for a look at Niagara Falls. He remarked thoughtfully: "I'd hate to go over 'em in a barrel."

Last week he was back in Washington on the edge of a political Niagara. Harry Truman studied the hoops and staves of two barrels which awaited him--the labor bill (see col. 2) and the Republicans' income-tax-cut bill.

The tax bill came first. If he signed it, he would reverse five months of Administration protests against income-tax cuts in 1947.

A veto, on the other hand, would require a decision fraught with all sorts of political possibilities; the bill was designed to give U.S. taxpayers $4 billion relief.

This week, Harry Truman climbed into the barrel. He vetoed the bill. The legislation, he wrote, "represents the wrong kind of tax reduction at the wrong time." His points:

P: Tax reduction now would be inflationary. Employment, national income, and department-store sales are all at record peacetime levels. There is "no convincing evidence" that a recession is imminent.

P: Tax reduction is not required for business expansion. "There is no shortage of funds for this purpose in any wide sector of our economy."

P: Tax relief is not the proper method of increasing consumer purchasing power. "Necessary adjustments in incomes, production, and prices should be made by . . . business and labor, not by hastily invoking the fiscal powers of Government."

P: The Government's expenses are still heavy, may become heavier. The nation is confronted with "great responsibilities for international relief and rehabilitation . . . many uncertainties."

P: Substantial payments should be made on the debt. "If the Government does not reduce the public debt during the most active and inflationary periods, there is little prospect of material reduction at any time."

P: The bill's tax-reduction formula--10.5% for the highest brackets, 20% for the middle, 30% for the lowest brackets --"fails to give relief where it ia needed most"--in the lowest brackets.

Unless, contrary to all expectations, Congress overrode the veto, a hope of tax relief was ended until some time in 1948.

This file is automatically generated by a robot program, so reader's discretion is required.