Balanced, but Big

In the 1,027 pages of the 4 lb. 4 oz. tome sent to Capitol Hill this week lay one of the major achievements of the Eisenhower Administration: a budget offering a small surplus (est. $70 million) for the fiscal year that begins next July 1. But almost overlooked in the light of that achievement was another fact: the fiscal 1960 budget, despite its balance, is also the largest in U.S. peacetime history.

The balanced budget, result of a determined, top-to-bottom Administration drive, calls for expenditures of $77 billion. That is $5.2 billion more than the amount that, in 1957, moved then-Secretary of the Treasury George M. Humphrey to warn of "a depression that will curl your hair." And it is $3.1 billion more than the President's original budget for the current fiscal year, in which the U.S. is running a gaudy $12.9 billion into the red. In its modest surplus, the 1960 budget picks up the pre-Sputnik, pre-recession trend of Eisenhower budgets:

Underlying the President's budget balance is an optimistic prediction that "a rapidly advancing economy" will produce a $9.1 billion increase in the Government's income. Insisting that his revenue forecast is "realistic," the President noted that after the 1953-54 recession, the jump in federal revenues ''was more than the increase estimated in this budget." He asked Congress to extend corporation and excise taxes at present rates for another year, also requested Congress to up the federal gasoline tax from 3-c- to 4 1/2-c- a gallon and slap a new 4 1/2-c- tax on jet fuels (to be paid by commercial airlines now entering the jet age). For the plain, suffering taxpayer, the President held out only the hope that his program would bring "tax reduction in the reasonably foreseeable future."

More for the Newest. On the other side of the ledger, the budget calls for an overall spending decrease of $3.8 billion. Some $300 million is trimmed from what budgeteers label "Major National Security" defense, atomic energy, stockpiling and foreign military aid, which together add up to $45.8 billion, 59% of the $77 billion total.

The defense budget comes to $40.9 billion, an increase of one-fourth of 1% over this year, not enough to cover price up-creep. A 12% boost in research and development funds is balanced by a 15% cut in military construction outlays. Procurement outgo stays about the same, $14 billion, with no money for Air Force interceptors or phased-out missiles such as the Navy's Regulus II, more money for newer missiles. The Air Force's missile-of-the-future, the solid-fuel Minuteman, is scheduled for a 40% increase to $270 million. Within the defense budget, the shares of the three services remain about the same, with the Air Force getting $18.6 billion, the Navy $11.6 billion, the Army $9.3 billion.

In the other departments of Major National Security, the budgetmakers raise atomic energy funds a lean 4% to $2.8 billion, trim strategic stockpiling funds, slice foreign military aid a surprising 20% to $1.8 billion.

Illusory Impression. At first glance it appeared that the Administration had cut non-defense spending by some $3.5 billion--but the impression was illusory. Actually the budgetmakers did hardly any real cutting at all in civilian programs; they merely let previously scheduled shrinkages take place.

Included in the current year's spending budget, for example, is nearly $1.4 billion to meet an increase in the U.S.'s International Monetary Fund quota; this outlay disappears in the 1960 budget. The Government will save hundreds of millions through the expiration of two temporary antirecession programs enacted last year: mortgage-purchasing and federal aid for extending unemployment payments. The previously scheduled death of the much-abused acreage reserve, part of Agriculture Secretary Ezra Benson's costly soil bank, will save another $700 million.

All told, such savings, not representing real cuts in permanent programs, add up to some $3.7 billion. But with them set aside, the budget, far from slashing non-defense spending, actually increases it by about $200 million. That fact goes to the heart of a Democratic political proposition: that the Eisenhower Administration has been niggardly about civilian spending, with rising defense costs alone responsible for the continuing increases in Eisenhower budgets. Instead, from fiscal 1955 to fiscal 1960, the increase in security spending comes to only 13%, and since 1954, President Eisenhower's first full fiscal year, security spending actually shows a 2% decrease:

But in the non-security sector--including interest on the national debt, veterans' benefits, farm subsidies, welfare outlays, etc.--spending has soared by a staggering 50% since 1954:

Part of this upsurge can be charged to rising interest rates, pushing the cost of carrying the national debt from $6.5 billion in 1954 to an estimated $8 billion in 1960. Even bigger has been the scandalous rise in farm-program outlays, the result of keeping Depression-era laws on the books in a time of technology-boosted agricultural productivity:

Since December, when President Eisenhower made known his determination to achieve a balanced budget, some members of the Democratic 86th Congress have been preparing for the worst. The budget that the President prepared for submission this week, cried Pennsylvania's Senator Joseph Clark, would necessarily be "inadequate" and "cheapskate." Warned Senate Majority Leader Lyndon Johnson: "We cannot afford to bankrupt the national conscience to serve the ends of political bookkeeping." On the basis of the actual budget sent by the President to the Congress, there was small chance of that.

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