Deficit Up

One reason that the outcry for tax cuts and massive antirecession Government spending programs died away so suddenly was that both responsible Republicans and Democrats suddenly became aware of a big new fact of economic-political life: without any more help at all, the U.S. already is heading for a massive budget deficit in fiscal 1959 (starting July 1).

Only five months ago President Eisenhower sent the 1959 budget to Congress, and it showed a slender surplus of $500 million. Last week Budget Director Maurice H. Stans guardedly forecast a 1959 deficit "in the general magnitude of $8 billion-$10 billion, according to present tentative estimates." But Washington skeptics see more realism in the red-ink estimate issued by the staff of the Congressional Joint Committee on Internal Revenue Taxation: a dizzying $11.1 billion. And even the Joint Committee's forecast may err on the cheerful side. It assumes:

Income of $66.9 billion, or $7.5 billion less than President Eisenhower's original estimate last January. But the Joint Committee took for granted a steady upturn in the economy's vigor during fiscal 1959, and not all economists are that hopeful.

Outgo of $78 billion, or $4.1 billion more than the President's January estimate. But Washington officials have conceded that 1959 spending might run as high as $80 billion. If it does, unless the economy perks up sharply during the twelve months ahead, the 1959 deficit could reach $13 billion or more.

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