Black-Ink Budget

In the red and black terms of fiscal policy, it was a dramatic occasion. After a paring arid scraping, President Eisenhower had almost in hand, to present to the 86th Congress next month, a balanced budget with about $77 billion incoming against about $77 billion outgoing.

There was no magic revenue or cost breakthrough in the Eisenhower Administration's prospective balanced budget as Ike outlined it last week to Republican congressional leaders. It had come not by wave of the hand but by sweat of the brow. "There can be no real fiscal security in this country." said the President, "unless our fiscal policy is sound. Remember that." Items in the new budget:

Defense. The Defense Department, by methods such as turning a harder eye to duplicating missile programs and wringing out other items of military waste, has squeezed itself into a budget estimate of $40.8 billion, about the same as for the current fiscal year, despite fantastically rising costs of new technology and force requests that originally totaled a staggering $58 billion.

Welfare. The Eisenhower legislative program has eliminated all new social welfare legislation, water and reclamation project starts, etc.

Form Subsidies. These remain the Administration's biggest headache (see Agriculture), but the budget envisions a $600 million saving in nonrecurring expenses for the acreage reserve section of the soil bank program (which was not extended by the last Congress), as much as $179 million on rural electrification, and a big chunk of the $250 million being spent for agricultural conservation. Moreover, the Agriculture department's surplus estimates are based not on the balmy-weather bumper crops of 1958 but on the ornery-weather average of other years.

Federal Lending. All Government lending programs, from the Small Business Administration to college housing and urban renewal, are coming under a hard budgetary thumb.

New Income. Proposed hikes in the federal gasoline tax, aviation gas tax and postal rates (first-class mail to a flat 5-c-) will, if approved by Congress, help bring income into line with outgo.

If, by the end of the next fiscal year (June 30, 1960), the U.S. budget is in fact in balance, it will be a political miracle. Vice President Richard Nixon is among Republicans who fear that stout dedication to a balanced budget may type Republicans as rearguardists just when liberals are winning elections.

The Democratic 86th Congress is certain to buck violently against the Administration budget in such fields as reclamation and social welfare. But in that sense the mere presentation of a balanced budget puts the Administration in a favorable position: anyone who wants to spend more will have to unbalance it--and suffer the possible political consequences.

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