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(2) Whether or not candidates for President and Vice President should be nominated by national political conventions, as at present, and, if so, recommendations which should be made to the parties for improving the convention process, and, if not, a method which would be preferable.

(3) Whether or not provision should be made for the case where before the election of presidential electors, or after such time but before the election of President and Vice President, a candidate for the Presidency or for the Vice Presidency dies, declines to run, or is found ineligible to take office if elected.

(4) Whether or not provision should be made for the case of the death of any of the individuals from whom the House of Representatives may choose a President whenever the right of choice shall have devolved upon it, and for the case of the death of any of the persons from whom the Senate may choose a Vice President whenever the right of choice shall have devolved upon it.

(5) Whether or not a constitutional amendment should be proposed under which failure of candidates for President and Vice President to receive a majority of the electoral votes shall be resolved by popular vote rather than by the House of Representatives.

(6) How it shall be determined whether the President, or individual acting as President, is unable to execute the powers and duties of the office, and how the duration of such inability shall be determined.

(7) Whether or not provision should be made for an individual to execute the office of President in case of removal, death, resignation, or inability, both of the President and Vice President, where by reason of removal, death, resignation, or inability there is no individual upon whom the powers and duties of such of fice would otherwise automatically devolve.

(8) Whether there are, or should be any differences between the status, powers, duties, and privileges of an elected President and of any other individual executing the office of President.

(9) Whether or not the term of the Vice President or other individual succeeding to the Presidency should be limited to a duration of approximately 2 years, a new presidential election to coincide with election of Members of the House of Representatives where such in. dividual succeeds to the Presidency during the first or second year of the term for which the President was elected.

Sec. 3. The joint committee shall report to the Senate and House of Representatives the results of its study and investigation together with its recommendations, including drafts of any legislation recommended and of any proposed constitutional amendments considered necessary or desirable. The joint committee shall submit its final report to the Senate and House of Representatives not later than June 30, 1953, and thereupon the existence of the joint committee shall terminate.

SEC. 4. For the purposes of this concurrent resolution, the joint committee,

or any duly authorized subcommittee thereof, is authorized to hold such hearings, to sit and act at such times and places during the sessions, recesses, and adjourned periods of the Congress, to employ counsel, clerical and other assistants, to require by subpena or otherwise the attendance of such witnesses and the production of such correspondence, books, papers, and documents, to administer such oaths, to take such testimony, and to make such expenditures, as it deems advisable. The cost of stenographic services to report such hearings shall not be in excess of 25 cents per hundred words. The expenses of the joint committee, which shall not exceed $10,000, shall be paid one-half from the contingent fund of the Senate and one-half from the contingent fund of the House of Representatives, upon vouchers approved by the chairman of the joint committee. Disbursements to pay such expenses shall be made by the Secretary of the Senate out of the contingent fund of the Senate, such contingent fund to be reimbursed from the contingent fund of the House of Representatives in the amount of one-half of the disbursements so made.

STUDY OF ANTTTRUST LAWS Mr. MCCARRAN submitted the following resolution (S. Res. 14); which was referred to the Committee on the Judiciary:

Resolved, That the Committee on the Judiciary, or any duly authorized subcommittee thereof, is authorized and directed to make a comprehensive study of the antitrust laws of the United States and their administration, interpretation and effect, to determine the nature and extent of any legislation which may be necessary or desirable to

(a) clarify existing statutory enactments, and eliminate any conflicts which may exist among the several statutes comprising such laws;

(b) rectify any misapplications and misinterpretations of such laws which may have developed in the administration thereof;

(c) supplement such statutes to provide any additional substantive, procedural, or organizational legislation which may be needed for the attainment of the fundamental objects of such statutes; and

(d) improve the administration and enforcement of such statutes. SEC. 2. For the purposes of this resolution, the committee, or any duly authorized subcommittee thereof, is authorized during the sessions, recesses, and adjourned periods of the Eightythird Congress to employ upon a temporary basis such technical, clerical, and other assistants as it deems advisable and, with the consent of the head of the department or agency concerned, to utilize the services, information, facilities, and personnel of all agencies in the executive branch of the Government. The expenses of the committee under this resolution, which shall not exceed $, shall be paid from the contingent fund of the Senate upon vouchers ap

proved by the chairman of the com-
mittee.
PROCEDURES IN TAKING CUSTODY OF BOOKS,

PAPERS, OR RECORDS AND PERSONS FOR
COMMITTEES

Mr. MCCARRAN submitted the followlowing resolution (S. Res. 15); which was referred to the Committee on Rules and Administration:

Resolved, That upon certification by the chairman or the acting chairman of a standing committee of the Senate that two-thirds of the members of the committee have voted to require the production of specified or identified books, papers, or records in the custody of an officer of the Government of the United States, the President of the Senate shall issue his warrant, returnable at a time when the Senate is meeting, commanding the Sergeant at Arms to obtain the books, papers, or records specified by the chairman or the acting chairman, and in the event of the refusal of the officer of the Government of the United States having custody thereof, to deliver the required books, papers, or records, to take the said officer into bodily custody forthwith, and bring him before the bar of the Senate, then and there to answer questions as to his refusal. LOYALTY CHECKS ON SENATE EMPLOYEES

Mr. MCCARRAN submitted the following resolution (S. Res. 16); which was referred to the Committee on Rules and Administration:

Resolved, That hereafter when any person is appointed as an employee of any committee of the Senate, or any Senator, or of any office of the Senate, the committee, Senator, or officer having authority to make such appointment shall transmit the name of such person to the Committee on Un-American Activities of the House of Representatives, to the Federal Bureau of Investigation, and to the Central Intelligence Agency, together with a request that such committee, Senator, or officer be informed as to any derogatory information in the possession of such agency concerning the loyalty of such person, and in any case in which such derogatory information is revealed such committee, Senator, or officer shall make or cause to be made such further investigation as shall have been considered necessary to determine the loyalty of such person.

Every such committee, Senator, and officer shall promptly transmit to the Committee on Un-American Activities of the House of Representatives, to the Federal Bureau of Investigation, and to the Central Intelligence Agency a list of the names of the incumbent employees of such committee, Senator, or officer, together with a request that such committee, Senator, or officer be informed of any derogatory information contained in the files of such agency concerning the loyalty of such employee. PREPARATION AND PRINTING REVISED RULES

AND MANUAL Mr. JENNER submitted the following resolution (S. Res. 17); which was referred to the Committee on Rules and Administration:

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fare) and inserting in lieu thereof "fifteen'';

(13) by striking out “thirteen” in subsection (m) (relating to the Committee on Interior and Insular Affairs) and inserting in lieu thereof "eleven”;

(14) by striking out “thirteen" in subsection (n) (relating to the Committee on Public Works) and inserting in lieu thereof “eleven”; and

(15) by striking out “thirteen" in subsection (0) (relating to the Committee on Rules and Administration) and inserting in lieu thereof

"eleven." SEC. 2. Section (4) of rule XXV of the Standing Rules of the Senate is amended to read as follows:

(4) Each Senator shall serve on two standing committees and no more; except that not to exceed eighteen Senators of the majority party, and not to exceed three Senators of the minority party, who are members of the Committee on the District of Columbia, the Committee on Government Operations, or the Committee on Post Office and Civil Service may serve on three standing committees and no more."

Resolved, That the Committee on Rules and Administration be, and it is hereby, directed to prepare a revised edition of the Senate Rules and Manual for the use of the Eighty-third Congress, and that 1,500 additional copies shall be printed and bound, of which 1,000 copies shall be for the Senate, 200 copies for the use of the Committee on Rules and Administration, and the remaining 300 copies shall be bound in full morocco and tagged as to contents and delivered as may be directed by the committee. PROPOSED CHANGES IN NUMBER OF MEMBERS

ON CERTAIN STANDING COMMITTEES Mr. CASE submitted the following resolution (S. Res. 18), which was referred to the Committee on Rules and Administration:

Resolved, That section (1) of rule XXV of the Standing Rules of the Senate (relating to standing committees) is amended

(1) by striking out “thirteen” in subsection (a) (relating to the Committee on Agriculture and Forestry) and inserting in lieu thereof "fifteen”;

(2) by striking out "twenty-one" in subsection (b) (relating to the Committee on Appropriations) and inserting in lieu thereof "twentythree";

(3) by striking out “thirteen” in subsection (c) (relating to the Committee on Armed Services) and inserting in lieu thereof "fifteen";

(4) by striking out "thirteen” in subsection (d) (relating to the Committee on Banking and Currency) and inserting in lieu thereof "fifteen”;

(5) by striking out “thirteen” in subsection (e) (relating to the Committee on Post Office and Civil Seryice) and inserting in lieu thereof “eleven";

(6) by striking out “thirteen” in subsection (f) (relating to the Committee on the District of Columbia) and inserting in lieu thereof "eleven";

(7) by striking out “thirteen” in subsection (g) (1) (relating to the Committee on Government Operations) and inserting in lieu thereof "eleven";

(8) by striking out “thirteen" in subsection (h) (relating to the Committee on Finance) and inserting in lieu thereof “fifteen";

(9) by striking out “thirteen” in subsection (i) (relating to the Committee on Foreign Relations) and inserting in lieu thereof "fifteen";

(10) by striking out “thirteen" in subsection (j) (relating to the Committee on Interstate and Foreign Commerce) and inserting in lieu thereof "fifteen";

(11) by striking out "thirteen" in subsection (k) (relating to the Committee on the Judiciary) and inserting in lieu thereof "fifteen”;

(12) by striking out “thirteen” in subsection (1) (relating to the Committee on Labor and Public Wel

GOVERNMENT POSITIONS NOT UNDER CIVIL

SERVICE Mr. CARLSON submitted the following resolution (S. Res. 19); which was referred to the Committee on Post Office and Civil Service:

Resolved, That the Civil Service Commission be, and it is hereby, directed to furnish the Senate with a full and complete list of all offices, positions, places, and employments, listing the same by departments, bureaus, boards, commissions, and independent establishments, including the government of the District of Columbia, unofficial observers, special attorneys or special agents, and Federal employments of all kinds, with the amount of salaries of each attached, under the Government of the United States and not under civil-service rules and regulations. AMENDMENT OF STANDING RULE RELATING

TO CLOTURE Mr. JENNER submitted the following resolution (S. Res. 20); which was referred to the Committee on Rules and Administration:

Resolved, That subsection 2 of rule XXII of the Standing Rules of the Senate (relating to cloture) is amended by inserting before the word "following” the word "fifth"; and by striking out "by two-thirds of the Senators duly chosen and sworn" and inserting in lieu thereof "by two-thirds of the Senators present and voting.” SPECIAL ASSISTANT TO MINORITY MEMBERS

OF SENATE Mr. BRIDGES submitted the following resolution (S. Res. 21), which was referred to the Committee on Rules and Administration:

Resolved, That the minority Members of the Senate are authorized to appoint a special assistant to the minority who shall perform such duties as may be pre

scribed by such minority Members and who shall receive compensation to be fixed by them at a basic rate of not less than $7,320 or more than $8,000 per annum to be paid out of the contingent fund of the Senate. CONTINUATION OF STUDY OF ORGANIZATION

AND OPERATION OF INTERSTATE COMMERCE COMMISSION

Mr. TOBEY submitted the following resolution (S. Res. 22), which was referred to the Committee on Interstate and Foreign Commerce:

Resolved, That the time within which the Committee on Interstate and Foreign Commerce may complete the investigation authorized by Senate Resolution 332, agreed to June 26, 1952, hereby is extended to June 30, 1953. CONTINUATION OF INVESTIGATION OF CER

TAIN TRANSPORTATION AND COMMUNICA-
TIONS PROBLEMS

Mr. TOBEY submitted the following resolution (S. Res. 23); which was referred to the Committee on Interstate and Foreign Commerce:

Resolved, That the time within which the Committee on Interstate and Foreign Commerce may complete the investigation authorized by Senate Resolution 50, Eighty-first Congress, agreed to April 11, 1949, as continued by Senate Resolution 308, Eighty-first Congress, agreed to July 27, 1950, Senate Resolution 55, Eightysecond Congress, agreed to February 19, 1951, Senate Resolution 154, Eightysecond Congress, agreed to June 29, 1951, and Senate Resolution 258, Eightysecond Congress, agreed to January 24, 1952, hereby is extended to June 30, 1953. PROPOSED STANDING COMMITTEE ON

VETERANS' AFFAIRS Mr. FERGUSON submitted the fol. lowing resolution (S. Res. 24); which was referred to the Committee on Rules and Administration:

Resolved. That commencing with the Eighty-fourth Congress, rule XXV of the Standing Rules of the Senate (relating to standing committees) is amended by

(1) striking out subparagraphs 10 through 13 in paragraph (h) of section 1;

(2) striking out subparagraph 16 through 19 in paragraph (1) of section 1;

(3) inserting in section 1, after paragraph (0), the following new paragraph:

“(p) Committee on Veterans' Affairs, to consist of 13 Senators, to which committee shall be referred all propose legislation, messages, petitions, memorials, and other matters relating to the following subjects:

“1. Veterans' measures, generally.

“2. Pensions of all wars of the United States, general and special.

"3. Life insurance issued by the Government on account of service in the Armed Forces.

“4. Compensation of veterans.

“5. Vocational rehabilitation and education of veterans.

“6. Veterans' hospitals, medical care, and treatment of veterans.

7. Soldiers and sailors' civil relief.

“8. Readjustment of servicemen to civil life.";

(4) striking out section 4 and inserting in lieu thereof the following:

(4) Each Senator shall serve on 2 standing committees and no more; except that 18 Senators of the majority party, and 6 Senators of the minority party, who are members of the Committee on the District of Columbia, the Committee on Expenditures in the Executive Departments, or the Committee on Post Office and Civil Service, shall serve on 3 standing committees and no more. During any period in which the minority party has a total membership of 15 Senators or less, such 6 Senators of such party who shall be members of 3 committees may be members of any 3 standing committees."

EXPANDING FOREIGN INVESTMENTS Mr. CAPEHART (for himself and Mr. MAYBANK) submitted the following resolution (S. Res. 25); which was referred to the Committee on Banking and Currency:

Resolved, That the Committee on Banking and Currency, or any duly authorized subcommittee thereof, is authorized and directed to make a thorough study of means and methods for increasing and expanding our international trade, through the operations of the Export-Import Bank, the International Bank for Reconstruction and Development, and such other agencies and devices as would facilitate increasing American investment abroad and expanding international trade. The committee shall report to the Senate at the earliest practicable date the results of its study, together with such recommendations as it may deem advisable.

RULES OF THE SENATE The Senate resumed the consideration of the motion of Mr. ANDERSON (for himself and others) that the Senate take up for adoption rules of the Senate for the Eighty-third Congress.

Pending debate,

On motion by Mr. TAFT to lay the motion on the table,

Mr. TAFT raised a question as to the presence of a quorum;

Whereupon

The VICE PRESIDENT directed the roll to be called;

When

Ninety-two Senators answered to their
names, as follows:
Aiken
Eastland

Jenner
Anderson
Ellender

Johnson, Colo. Barrett

Ferguson Johnson, Tex. Beall Flanders

Johnston, S. C. Bennett Frear

Kennedy
Bricker

Fulbright Kerr
Bridges
George

Kilgore
Bush
Gillette

Knowland
Butler, Md. Goldwater Kuchel
Butler, Nebr. Gore

Langer
Byrd
Green

Lehman
Capehart Hayden

Long Carlson

Hendrickson Magnuson
Case

Hennings Malone
Clements Hickenlooper Mansfield
Cooper
Hill

Martin
Cordon
Hoey

Maybank
Daniel
Holland

McCarran
Dirksen Humphrey McCarthy
Douglas
Hunt

McClellan
Duff
Ives

Millikin
Dworshak Jackson

Monroney 26100—83—83-1-3

Morse
Russell

Taft
Mundt

Saltonstall Thye Murray

Smathers Tobey Neely

Smith, Maine Watkins Pastore

Smith, N. J. Welker Payne

Smith, N.C. Wiley
Potter

Sparkman Williams
Purtell
Stennis

Young
Robertson Symington

A quorum being present,

The question being taken on agreeing to Mr. TAFT's motion,

It was determined in Yeas.-- 70 the affirmative--- Nays.----- 21

On motion by Mr. IVES, The yeas and nays being desired by one-fifth of the Senators present.

Senators who voted in the affirmative areAiken

Fulbright Millikin
Barrett
George

Monroney
Beall
Gillette

Mundt
Bennett

Goldwater Payne
Bricker
Gore

Potter
Bridges
Hayden

Purtell
Bush

Hickenlooper Robertson Butler, Md. Hill

Russell
Butler, Nebr. Hoey

Saltonstall
Byrd
Holland

Smathers
Capehart Jenner

Smith, Maine Carlson

Johnson, Colo. Smith, N. J.
Case

Johnson, Tex. Smith, N.C.
Clements Johnston, S.C. Sparkman
Cooper
Kerr

Stennis
Cordon

Knowland Taft
Daniel
Langer

Thye
Dirksen
Long

Watkins
Dworshak Malone

Welker
Eastland
Martin

Wiley
Ellender

Maybank Williams
Ferguson McCarran Young
Flanders McCarthy
Frear

McClellan
Senators who voted in the negative
are-
Anderson Hunt

Mansfield
Douglas
Ives

Morse
Duff
Jackson

Murray
Green

Kennedy Neely Hendrickson Kilgore

Pastore Hennings Kuchel

Symington Humphrey Lehman

Tobey So the motion of Mr. ANDERSON (for himself and others) was laid on the table.

The Journal of the proceedings of Wednesday, January 7, 1953, was approved.

THE BUDGET The PRESIDENT pro tempore laid before the Senate the following message from the President of the United States; which was read and, with the accompanying document, referred to the Committee on Appropriations and ordered to be printed: To the Congress of the United States:

I am transmitting with this message the budget of the United States Government for the fiscal year ending June 30, 1954.

This budget represents my judgment as to the amount of funds needed to carry forward our programs for the security and welfare of our people and for world peace. It is based, like all those I have transmitted in previous years, on the policy that the Government should undertake to do only what is essential for the safety and well-being of the Nation, and that what must be done should be done in the most efficient manner.

This budget has been prepared under unique circumstances. It is the first budget since the adoption of the twentieth amendment to the Constitution to be presented to the Congress by a President who will leave office a few days after its transmission. My successor will be inaugurated as President on January 20. His will be the Executive responsibility during the time when this budget is being considered by the Congress, and his will be the responsibility for the administration of Federal programs for the period of time covered by this budget. I have done all in my power to ease the problems of transition to the new administration, including informing the President-elect, through a representative of his choice, of the background and considerations which have entered into the preparation of this budget. However, I wish to make it clear that neither my successor in office nor any of his staff has participated in the decisions herein represented. The President-elect has no responsibility for the amounts included in this budget, and will be entirely free, of course, to propose changes in them.

Because of the particular circumstances, there is one significance difference between this budget and others I have transmitted. In previous years, the budget estimates have included the cost of new legislation which I recommended to the Congress. Such a practice is a sound rule for Federal budgeting. This year, however, I am not transmitting specific proposals for new legislation. Accordingly, the usual estimates of the fiscal effects of such legislation are not included. For example, neither estimated expenditures for aid to medical education nor estimated receipts from increased postal rates are included. I still support these and certain other legislative proposals as strongly as ever, but since I will not be in office during the fiscal year 1954, I do not think it proper

PROPOSED CHANGES IN NUMBER OF MEMBERS

ON CERTAIN STANDING COMMITTEES Mr. JENNER, by unanimous consent, from the Committee on Rules and Administration, to whom was referred the resolution (S. Res. 18) proposing changes in the number of members on certain standing committees, reported it with an amendment and submitted a report (No. 1) thereon.

Ordered, That the resolution lie on the table.

RECESS On motion by Mr. TAFT, at 5 o'clock and 26 minutes p. m.,

The Senate took a recess until 12 o'clock m. on Friday next.

FRIDAY, JANUARY 9, 1953 (Legislative day of Tuesday, January 6,

1953) The PRESIDENT pro tempore called the Senate to order at 12 o'clock m., and the Chaplain offered prayer.

THE JOURNAL On motion by Mr. TAFT, and by unanimous consent,

for me to transmit specific new legislative proposals or to budget for them. However, funds are included in this budget to carry forward certain activities already under way which will require renewed legislative authority to continue into the next fiscal year, such as the programs under the Mutual Security Act and the Defense Production Act.

In this budget, I am recommending that the Congress enact 72.9 billion dollars in new authority to incur financial obligations during the fiscal year 1954. Total expenditures, from these funds and from balances of authorizations previously enacted, are estimated at 78.6 billion dollars. Receipts under present tax laws, which provide for the expiration of some of the post-Korean tax increases, are estimated at 68.7 billion dollars. On this basis, the deficit is estimated at 9.9 billion dollars. The following table shows the budget totals for the five fiscal years 1950 through 1954:

Budget totals (Fiscal years.

In billions)

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after contracts are let. Because of this long lead time, most items of military equipment are not usually delivered and completely paid for until 2 or sometimes 3 years after they are ordered.

Each year from 1951 through 1953, new obligational authority has exceeded expenditures, because new obligational authority represented for the most part orders being placed, and expenditures represented for the most part payments for goods being delivered. In the fiscal year 1954, fewer orders will be placed, but more goods will be delivered. As a result, expenditures are expected to exceed new obligational authority for the first time since before Korea.

Under our present defense program, military expenditures are expected to reach their peak in the fiscal year 1954 and to start declining in subsequent years. If our Armed Forces are stabilized at their presently approved goals and if no new aggressions occur, new obligational authority and expenditures may be expected to level off in future years at the amounts necessary to maintain these forces and to replace current equipment with new and better items as they are developed. It is difficult to forecast with any precision the amount by which total Federal expenditures may be expected to drop in future years under these assumptions, but it may be in the neighborhood of 15 billion dollars. In my judgment, however, a drop of this magnitude cannot be expected for at least 2 or 3 years.

BUDGET EXPENDITURES This budget is dominated, as the last three have been, by the cost of national security. About 73 percent of all budget expenditures in the fiscal year 1954 will be for six major national security programs-military services, international security and foreign relations, the development of atomic energy, the promotion of defense production and economic stabilization civil defense, and merchant marine activities. In the fiscal year 1954 these programs will cost approximately 57.3 billion dollars.

An additional 14 percent of budget expenditures in 1954 will be for interest and for veterans' services and benefits. These expenditures, which will amount to approximately 11 billion dollars, represent for the most part a continuing cost of World War II; in addition, they include the costs of services and benefits for the growing number of veterans of the fighting in Korea.

The remaining 13 percent, or 10.3 billion dollars, will be for all other activities of the Government. Some of these activities—such as the port security program of the Coast Guard and the internal security program of the Federal Bureau of Investigation-have a direct bearing on our national security. Others—such as our programs for agriculture, housing and community development, education and general research, labor, social se urity, welfare, and health-help to assure our continued social and economic progress and to strengthen the Nation for the long, hard period of world tension that lies ahead

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These figures show very clearly the budgetary impact of the defense mobilization program on which we embarked after the Communist aggression in Korea in June 1950. This program required, among other things, that we increase our active military forces by about 2 million men and women, equip those larger forces with new and improved weapons, and maintain them for an indefinite period. These were steps judged necessary not only to carry out the commitment we undertook in Korea, but also to increase our defense preparedness in the light of the continuing possibility of fighting on a much larger scale. We are now well along in this program. Our Armed Forces have long since reached the level of 3.6 million; the initial equipment to outfit them has been ordered, and much of it has been delivered.

New obligational authority, primarily to finance the purchase of military weapons and equipment, rose sharply after the attack on Korea and reached a peak of 92.9 billion dollars in the fiscal year 1952. Since then, new obligational authority has been declining. The amount recommended for the fiscal year 1954 is 20 billion dollars less than the amount enacted for 1952.

Although new obligational authority is declining, expenditures are still rising. This is due the long lead time involved in the procurement of military equipment-the time required to design, produce, test, and deliver such complex items as planes, tanks, ships, and guns,

In the preparation of this budget, every Government program—including those directly concerned with national security-has been reviewed in the light of the current outlook for international developments, in the light of the heavy tax burden, and in the light of the longterm needs of the Nation. The recommended estimates reflect our constant effort to adjust expenditure programs to make sure they are at the minimum level consistent with our national objectives. Proposals for military procurement, for example, reflect our policy of relying, wherever possible, on a continuing flow of weapons and equipment from production lines, rather than on the accumulation of large inventories of reserve stocks.

Increased funds have been included in this budget only for those programs where, in my judgment, a clear and definite need exists that cannot be longer deferred without impairing the public interest. In the case of several regulatory agencies, such as the Interstate Commerce Commission, the Federal Trade Commission, the Securities and Exchange Commission, and the Federal Communications Commission, earlier cut-backs were so severe that steps have been taken in this budget to restore some of them. Even in these instances, however, the policies have been strict. Funds have been provided for handling increased workloads or backlogs of unfinished work only when failure to do so would result in delays which would have to be made up later at an even greater expense, or in a serious impairment of an agency's ability to carry out the responsibilities assigned to it by law. It would be shortsighted to do less.

Because of the overriding requirements of the national security programs, many important Government services to businessmen, farmers, and the public at large have been held, in recent years, to levels below those justified by our growing population and expanding economy.

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Rising prices have also increased the cost of Government and have reduced the actual service to the public per dollar spent just as they have reduced the purchasing power of private individuals and firms. When defense spending has declined, we must bring these services to levels consistent with the long-range development of the Nation and its resources.

The recommended appropriations anticipate increases in efficiency resulting from reorganizations, improved management procedures, and better programing of the work to be done. Substantial progress has been made in strengthening Federal management in the last few years so as to get more work done at less cost. This progress is reflected in this budget, and will continue to be a factor in future budgets.

Government organization and procedures are not static. They must be continually reviewed and modernized in order to adapt the machinery of Government to its current tasks. An examination of needed actions to improve Government organization and management is now a regular and continuing part of the process of preparing and administering the Federal budget. Reorganization plans transmitted under the Reorganization Act of 1949 have made a number of far-reaching improvements in providing officials of the executive branch with more effective organization and more adequate authority to do their jobs. I believe it will be found to be most desirable to extend the authority in that act, which expires April 1, 1953, as one of the steps needed to assure continued progress in increasing the efficiency with which the executive branch is managed.

scheduled to expire on June 30, 1953. Under the Revenue Act of 1951, the rate increases on individuals' income will terminate on December 31, 1953, and the increases in normal rates on corporations' income will expire on March 31, 1954. Virtually all of the excise-tax rate increases under this act will also expire on March 31, 1954. The purpose of the Congress in setting termination dates was to assure early review of the tax increases enacted after Korea. Responsibility for this review falls on this session of the Congress.

If the increases are allowed to expire as scheduled, the Government will lose about 2 billion dollars in revenue in the fiscal year 1954. The full effect of the expirations will be an annual revenue loss of approximately four times this amount.

The continuing increase in expenditures for national security and the prospect of a substantial deficit in the fiscal year 1954 pose an immediate and serious problem in tax policy. While I do not wish to make any specific recommendations, I do wish to make it clear that in my judgment it would not be wise to plan for a large budget deficit during a period when business activity, civilian employment, and national income are reaching unprecedented heights. The course of prudence and wisdom would be to continue to strive for a balanced budget and a pay-as-we-go policy in our rearmament program.

In its consideration of the level of tax rates, I hope the Congress will also give serious consideration to improving the equity of the tax system. The injustices and loss of revenue arising out of loopholes in the tax laws should be eliminated. Confidence in the equity of tax laws is essential in a democracy.

BORROWING AND THE PUBLIC DEBT On the basis of the present fiscal outlook and existing tax laws, the public debt is expected to increase from 259 billion dollars at the beginning of the current fiscal year to about 264 billion dollars by June 30, 1953, and 274 billion dollars by June 30, 1954.

Last spring substantial revisions both from the standpoint of increased rate and increased intermediate yields were announced in the savings bond program, designed to put these widely held issues on a basis more nearly comparable with alternative investments. Holders of almost three-quarters of the maturing savings bonds are taking advantage of the new arrangements under which interest continues to accrue on bonds not presented for cash redemption at maturity. EXPENDITURES AND AUTHORIZATIONS BY MAJOR

FUNCTION The following table shows estimated expenditures and recommended new obligational authority for the fiscal year 1954, classified by major function. It also compares estimated expenditures in the fiscal year 1954 with revised estimates for the current fiscal year and with actual expenditures in 1952. A more detailed breakdown of expenditures and new obligational authority by major function is contained in special analysis B, in part IV of this document. Expenditures and authorizations by major

functions
(Fiscal years. In millions)

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TAX POLICY

BUDGET RECEIPTS

The following table shows the source of estimated budget receipts for the fiscal year 1954, compared to revised estimates of receipts for the current fiscal year and actual receipts for the fiscal year 1952. The estimates for 1954 are based on present tax laws.

Budget receipts
(Fiscal years. In millions)

252

Military services.. $39, 727 $14. 380 $46, 296 $11, 535 International security

and foreign relations.. 5, 268 6,035 7, 861 Finance, commerce,

8,011 and industry.

241 458 275 88 Transportation and communication.

1, 923 2,056 2,016 2,061 Natural resources

2, 948
3,370

4,097 Agriculture and agri.

3, 459 cultural resources.. 1, 045 1. 943 1, 827 1, 455 Labor

243

268 278 Housing and community development_

7351 757 509 691 Education and general research.

171 272 288 177 Social security, welfare, and health.

2, 491 2, 594 2, 579 2, 563 Veterans' services and benefits..

4,863 4, 546 4, 564 4, 617 General government.. 1, 411

1,385 1, 547

1, 478 Interest.

5,934
6, 520 6, 420

6, 420 Reserve for contingencies.

25 40

50 Adjustment to daily

Treasury statement... -855

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I have always held that the Government's fiscal policy should aim at promoting the stable growth of our economy. This means that normally in times of high employment and rising national income the Federal Government should operate with a balanced budget.

In the years following the end of World War II, when the economy was operating at a full-employment level, my budget messages called for balanced budgets and debt reduction. During the four fiscal years 1947 through 1950, the Government had an over-all net surplus of 4.3 billion dollars.

After the outbreak of hostilities in Korea, I recommended that we finance our rearmament effort on a pay-as-we-go basis. In res nse to my recommendations, the Congress raised tax rates in 1950 and again in 1951. These tax increases were substantial. They helped produce a budget surplus in the fiscal year 1951, but they have not met our subsequent revenue requirements. The fiscal year 1952 ended with a deficit of 4 billion dollars. A deficit of 5.9 billion dollars is now estimated for the current fiscal year. An even larger deficit, 9.9 billion dollars, is estimated for the fiscal year 1954.

Under present law, a number of the tax increases enacted in 1950 and 1951 will terminate in 1953 and 1954. The excess-profits tax on corporations is

1954 estimated

$33, 394

940

23, 300 9, 869

590

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4, 298

Direct taxes on individuals:

Individual income taxes. $29, 880 $33, 551 Estate and gift taxes

833

895 Direct taxes on corporations:

Income and excess profits taxes.

21, 467 23, 700 Excises.

8,893 9, 795 Customs

550 590 Employment taxes: Federal Insurance Contributions Act

3, 569 4,000 Federal Unemployment Tax Act

259 271 Railroad Retirement Tax Act

735 650 Railroad Unemployment Insurance Act

10

11 Miscellaneous receipts..

1, 803 1, 745 Deduct: Appropriation to Federal

old-age and survivors in-
surance trust fund.

-3, 569 -4,000 Refunds of receipts.. -2, 302-2, 511 Budget receipts..

62, 128 68, 697

280

660

11 2,180

The estimates for 1954 include several hundreds of millions of dollars of receipts, authorizations, and expenditures relating to foreign credits and currencies for which no comparable figures appear in the 1952 and 1953 totals.

Until now foreign credits and currencies have been available to certain agencies without the normal processes of budgeting. Recent legislation requires that foreign credits be budgeted and reported in the same manner as regular

-- 4, 298 -2, 559

68, 665

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