Where the Money Goes

"For the time being, and perhaps for a long time, we must sail a middle course in an uncertain sea," wrote the President of the U.S. to Congress last week. Harry Truman's middle course, as he went on to chart ft in his budget, lay somewhere between guns and tools on the starboard, and butter on the port. A year ago he had insisted on a "pay-as-you-go" tax program. Now it was clear that he was sailing directly--if regretfully--back into the perilous waters of deep-deficit financing.

The cost of running and protecting the U.S. will come to $85.4 billion for the twelve months beginning next July 1, he estimated. Under present tax laws, federal revenues will be about $71 billion. The probable deficit for the period will be about $14.4 billion, to bring the total public debt to some $275 billion. Truman mildly asked Congress to vote him the $5 billion which Congress chopped off his tax request in the last session (and got a bipartisan, election-year roar of rejection from Capitol Hill). Then, as if he did not really expect new taxes, he took comfort from the theory that an ever-expanding economy will more than compensate for mounting deficits.

Seventy-five percent of the $85.4 billion will go to fortify the many fronts of U.S. national defense. Items: P: For the U.S. armed services, $51.2 billion. Of this, the Air Force gets 37% for a start on a 143-wing Air Force; the Army gets 31% to build to 21 divisions; the Navy 24% for a fleet of 408 combatant ships, 16 carrier air groups and a three-division Marine Corps. But even these expenditures, the President implies, will not fully replenish the war reserves of the U.S. expended in Korea and arms aid to U.S. allies.

P:For military, economic and technical help overseas, $10.5 billion (an increase of $3.5 billion over this year), P: For atomic energy, $1.7billion (and, at a budget press conference, a presidential promise to ask for some $5 billion in new funds in a special message to come).

The non-defense sector of the budget, noted the President with pride, is nearly a billion dollars below non-defense expenditures in the current budget. But he wants, among other things, $1.4 billion for the farm support program (up 100% over 1951); $2.6 billion for Federal welfare and health programs; $624 million for federal aid to education; $4.1 billion for veterans' benefits (set by law and beyond presidential control); and $303 million to help the Bureau of Internal Revenue hire 7,000 new tax collectors.

Back in the small print sat the penalty for deficit financing: interest on the federal debt, $6.2 billion--six times fatter than in 1940.

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