Deficits Ahead

The Eisenhower Administration pointed with pride to its original 1958 budget as the third black-ink budget in a row. Then came the Russian Sputniks, signaling the dawn of the space age and stepped-up defense spending. And then came the full force of the recession.

Last week Treasury Secretary Robert B. Anderson told of the red-ink results--which spelled out in big figures why the Administration has resisted a deficit-increasing tax cut. Instead of a $1.8 billion surplus for fiscal 1958, ending June 30, the Federal Government will run up a deficit of more than $3 billion as it is. Total federal spending will be up from the estimated $71.8 billion to "well over" $73 billion. And revenues will be down from $73.6 billion to about $70 billion.

An even gaudier splash of red lies ahead for fiscal 1959 (TIME, March 24). Only three months ago, President Eisenhower, hopeful that the economy would soon perk up, predicted a skinny 1959 surplus of $500 million. But January's estimates are already obsolete. Anderson reported that the spending estimate has jumped $4 billion from programs already in the works, to a peacetime peak of $78 billion.

And, in what may have been the understatement of the week, Anderson saw a "likelihood" that 1959 income would fall short of January estimates. Privately, Treasury officials consider a shortfall inevitable, guesstimate it at $4 billion or more. Net result: a 1959 deficit of perhaps $8 billion.

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