The Cost of Security

In the new State Department building's softly lighted auditorium, which he had pre-empted for the occasion, Harry Truman presented his 1952 budget to the press. Mrs. Truman and Margaret, whom he had invited because they wanted to see where all the money went, sat in a back row thumbing a 265-page summary of the 1,089-page full-size edition. The ladies listened attentively to the President, occasionally peered at the documents.

So did the newsmen. In the two costliest years of World War II (1944 and 1945) the U.S. had spent $168.2 billion for men and armaments. The President was now telling the U.S. how much it would have to put upnot to fight World War III, but merely to mobilize for whatever might happen.

He lumped it all together under the single heading of "national security"the cost of rebuilding the nation's own military establishment, atomic development, civil defense, aid to U.S. allies abroad. The figure (for fiscal 1951 and 1952): $140 billion.

Where Is the Money? All other costs of the U.S. Government for the same two years would come to only $43 billion (see chart). And even that figure contained the enormous, still unliquidated costs of the wars of yesterdayinterest on the national debt, payments to veterans, a total of $22 billion. In other words, the crushing costs of wars past & present for the two years would be $162 billion, compared with $21 billion for the normal domestic expenses of the U.S. Government.

The cost could also be measured against what the President had asked exactly a year ago when the fiscal-1951 budget was first framed. Then Harry Truman, seven months after he had ordered the last of U.S. occupation troops out of Korea, thought that $19 billion would be enough for national security. "The new emphasis on military preparedness," said his budget message this week, "reflects the necessities of the world situation today."

Where was the money coming from? Mr. Truman explained. Not all of the $140 billion for national security would actually be spent in the two- year period. Some of it would be merely in the form of orders for armaments. The orders would have to be paid for some day, but not in 1952. He figured actual spending in fiscal 1951 at $47.2 billion (including $27 billion for security); for 1952, $71.6 billion ($52 billion for security). He reckoned that revenues from present taxes in both years would be $99.6 billion, which would leave a deficit of $19.2 billion for the 24 months between July 1950 and July 1952.

"Pay As You Go." To meet the deficit, the President had already prescribed "much higher taxes." Exactly how much higher and how they would be levied, he would explain in a subsequent message. He was determined, however, that national security should be put on a basis of "pay as you go."* In short, if Mr. Truman had his way, the money would have to come out of the pockets of U.S. citizens, without any addition to the national debt, now $256 billion.

This week, as the budget was presented to the public, some Congressmen warned that taxes heavy enough to cover the full cost of security would strangle the country's economy. Cried New York's Daniel Reed: "I think the President has gone hysterical." Some recalled the observation of North Carolina's Congressman "Muley" Doughton, when President Roosevelt in 1943 proposed a $10.5 billion increase in wartime taxes: "You can shear a sheep once a year; you can skin him only once."

Other Congressmen figured that the U.S. could still grow a lot of wool, even though there would be some bleats, and that it was better for the U.S. even to lose some skin than to lose its head.

* To meet the full tax bill for fiscal 1952 the U.S. would have to raise more than $70 billionmore than it had ever raised before in a single year (previous record: $46.4 in fiscal 1945) and more than the Government had collected during the 138 years between 1789 and 1927.

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