Relief Ahead

A fortnight ago, Harry Truman admitted what others had suspected for weeks. Far from showing a $2.3 billion deficit, the Government would close its books on fiscal 1947 with a neat surplus. Unofficial guesses ran as high as a whopping $4 billion. Last week President Truman gave the Treasury's cautious estimate: $1 1/4 billion.

To Republicans, the information was encouraging. But it scarcely changed their plans as the Senate Finance Committee, headed by Colorado's Eugene Millikin, this week set to work on the House tax bill. The 1948 budget, they figured, could safely be cut by $5 1/4 billion, no more. Next year's revenues were expected to run $2 1/2 to $3 billion over former estimates. Allowing $1 billion for foreign commitments, $2 billion for debt reduction, taxes could safely be reduced by about $3 billion and still leave a comfortable cushion of cash against a possible recession or other eventualities. This would be nearly $1 billion less than the House's cut.

Though the overall pattern would remain, harassed taxpayers could expect some rejiggering of the cuts in the various tax brackets--set by the House at 30% on taxable incomes of less than $1,000, 20% on most others, 10 1/2% on incomes over $302,000. Chances were that the House provision making the cuts retroactive to Jan. 1 would be chopped. There was no sentiment for increasing individual exemptions. The Republicans were thriftily saving such potent political medicine for 1948.

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