Parting Shot

Almost by definition, it is easier to write a budget than to keep it. This week President Eisenhower submitted a delicately balanced budget for fiscal 1962--and left it up to President-elect Kennedy to keep it that way. While calling for history's biggest peacetime expenditures--$80.9 billion, up $2 billion from fiscal '61--Ike's final budget was based on the expectation that the economy will speed up by the time the new fiscal year begins this July 1. That would boost income by some $3.3 billion, to a record $82.3 billion. Result: a surplus of almost $1.5 billion (v. $100 million this fiscal year) and a modest reduction in the nation's $284.9 billion debt.

Fully expecting the incoming Kennedy Administration to exceed his spending proposals, Ike could not resist taking a parting shot: "If we deliberately run the Government by credit cards, improvidently spending today at the expense of tomorrow, we will break faith with the American people and their children." Citing with pride his own record, he said: "Military strength and domestic advancement must be based on a sound economy." Items in the Eisenhower budget:

Defense: Increase spending by $1.4 billion, to a total $42.9 billion. While much of the increase reflects simple inflation, it also provides some millions more for Polaris submarines, solid-fuel Minuteman ICBMs, B70 supersonic bombers, as well as more airlift capacity, modernization of Army equipment, and the capability, if necessary, to mount a round-the-clock airborne alert.

Space: Lift outlays for the National Aeronautics and Space Administration by $195 million, to a total $965 million--more than twice the amount spent in fiscal 1960.

Mutual Security: Boost spending for foreign aid and military assistance by $250 million, to $3.6 billion.

Health, Education & Welfare: Raise the budgeting by $276 million, to $4.8 billion, with small setups for hospital construction and public assistance--including medical aid for the aged--and a $13 million increase for promotion of education, to $640 million.

Agriculture: Hike expenditures by $165 million to $5.1 billion, including $3.4 billion for price supports. Blame for the farm scandal, said Ike, can be laid to the Democratic Congress, for failing to change the "unrealistic" price-support laws.

The President also reiterated some of his longstanding legislative proposals: boost postal rates, increase gasoline taxes, lift the 4 1/4% ceiling on Treasury bonds to stretch out the debt, liberalize depreciation allowances to encourage capital investment. Though Democratic Congressmen have frustrated several such proposals in the past, John Kennedy may look more favorably upon them as means to increase federal income and spur the economy. But it was less likely that Kennedy would stay with Ike's spending proposals, or meet his challenge to balance the budget. Said incoming Treasury Secretary C. Douglas Dillon, in testifying before the Senate Finance Committee last week (see BUSINESS): "Everything leads me to believe in the possibility of a deficit in 1962."

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