Indianapolis Times, Indianapolis, Marion County, 8 January 1941 — Page 7
| ‘WEDNESDAY, JAN. 8,
|
' WASHINGTON, Jan. 8 (U. P.).—The text of Presitlent Roosevelt's budget message. To the Congress of the United |Btates: The budget of the United States Government, for the fiscal year endling June 30, 1942, which I transmit | herewith, is a reflection of a world rat war. | Carrying out the mandate of the | people, the Government has em- | barked on a program for the total defense of our democracy. [| This means warships, freighters, | tanks, planes and guns to protect | us against aggression; and jobs, | health and security to strengthen | the bulwarks of democracy. Our | problem in the coming year is to | combine these two objectives so as | to protect our democracy against | external pressure and internal | slackness. | The threatening world situation | . forces us to build up land, sea and | air forces able to meet and master | any contingency. It is dangerous to { prepare for a little defense. 1It is cafe only to prepare for total defense. ' Total, defense means more than weapons. It means an ‘Industrial ca- | pacity stepped up to produce all the | materiel for defense with the great-
est possible speed. It means people
1941
ne {
. Text of Presiden
.The Army 4unds provide for the training and maintenance of a irom 1940, to 1,400,000 £iipped with the most evices of motorized and
force of men 280,000 in June; in 1942, modern mechanical warfare.
increasing
The Navy estimates continue the construction of our, over-all Navy and contemplate the doubling of There is provision for a great increase in the number
naval personnel.
of Army and Navy planes anc for
training pilots, . technicians anc’
ground crews.
Behind the lines a whole new defense industry is being built with
the financial support of the Federal Government. -One hundred
and twenty-five new plants are
under contract; more are planned. In submitting these recommeénda-
tions, I have not covered the full
requirements of the civilian train-
ing program. At present, surveys are underway which will provide a basis for transmitting an estimate of funds needed for the extension
of this essential defense activity.
In the current fiscal year cover a inin the various programs vocational training’ in trade schools and engineering colleges, work-experience
million men and women are cluded of apprentice training,
shops, and pilot training.
Expenditures under the defense program during the last six months amount to 7150 million dollars. This the
of health and stamina, conscious of [amount spent for national defense
is two and one-half times
1
t Rooseve
|reservoir of post-defense projects 1 lh help absorb labor that later will, e released by defense industry. i With this in mind, I am recon; mending reductions for rivers and harbors and |flood-control work. Where possible, without placing t. fe projects or the water users there of in jeopardy, reductions are propo id in the expenditures for reclamati¢ in projects. I have requested that fu:ther contracts for the constructiin of public buildings outside the Di3trict of Columbia be held in abelrance for the present. On the other hand, I have recommended funis for power anc other projects cohsidered essential to national defen e. Projects uncer construction, or jn which bids hzve been solicited will go forward to completion. Throughout, the Federal service other prijiects are being deferred until a mére appropriate time. However, surv ys and the planning of new projetts will go forward so that construct pn can be resumed without delay. This will produce (a long list of pu flic work projects, apart from defeiase construction, arranged sccosing to priorities. Stich a list-could be sjibmitted to a future Congress for the appropriation; of funds to put it jhto operation. if Il
CITES EPLOYMENT GAIN
WORKS PROJECT ADMINISTRATION.— The defense progiam has already resulted in a subsjan-
be affected to a larger extent; but the full impact will not be felt before the fiscal year 1943. The revenue for the fiscal year 1942 is expected to be 9 billion dollars. It will exceed the revenue collected in the fiscal year 1940—the last .year before the start of the present defense program—by 3 billion dollars. One-half of this in-
crease will come from the defense
taxes already enacted by the Congress, the other half from the increase in national income. The revenue expected for 1942 will be 1.6 billions larger than the | total of all non-defense expenditures. This 1.6 billions is greater than the annual expenditure on defense be= fore the present program started, but les# than will be necessary for maintaining the Army and Navy at the new level.
Estimates of receipts for 1942 and 1941 are "oh a below: : Estima
Receipts Progressive taxes on individuals and estates
Profit and capital taxes on corporations .
It's Budget Message
make any abnormal net profit out of national defense, I am not satis-. fled that existing laws are ‘in this respect adequate. I hope that action toward these ends will be taken at this session of Congress. 1 see many ways in which our tax system can be.improved without resort to restrictive tax levies. By adjustments in the existing tax laws the present rates of progressive taxation could be made ‘fully effeciive, as I believe the Congress intended. We must face the fact that the continued maintenance of an expanded and Navy and the interest on our defense debt will call for large Federal expenditures in ‘the years ahead. Our tax System must be made ready to meet thess Yequirements,
ted in Pct. Millions of Dollars Change 1942. 1941 $1979 $1571 2839 1745
X26 X63
Customs, excise, stamp, and miscellaneous
taxes
2657 X4
Employment taxes for Federal old-age
and survivors insurance
Other employment taxes .......... veeevnee
Miscellaneous receipts. (including back income taxes
668 230
x9 X6
422 x2
Total receipts (excluding returns from
Government corporations)
7293 x23
“If the Congress, subsequent to the establishment of a statutory debt limit, makes appropriations and |w authorizations which - require borrowing’ in excess of that limit, it has, in. effect, rendered tHat prior limit null and void. In the first 130 years of our national life, the Congress controlled the debt successfully without requiring such a limit. In view of these facts, I question the significance of a statutory debt limit, SXcept as it serves as & fiscal monito: The fiscal Bd outlined here would be in accord with our objective of financing the defense pro-
gram in an equitable manner, facili-
tating full use of our national resources, and avoiding inflationary policies which would aggravate the problems of pesixdefense adjustment.
h THE ' DEBT PROBLEM. — For
more than 25 years the world has been in a state of political turmoil
and its economies have been out of balance. This world condition is reflected in unbalanced budgets in all countries. Here, the first World War, the war against the depression, the presént defense program, all resulted in large additions to the Federal debt. I understand the concern of those who are disturbed by the growth of the Federal debt. © Yet the main fiscal problem is not the rise of the
to Congress
nation . of competitive armaments will become possible. Only iri such a world can economic stably be re-
If a high level of occnonth activity can be maintained during the defense period and—what will be a more difficult task—maintained in the post-defense period, then the fiscal needs can be readily met.
presents our national program. It is a preview of our work plan, a forecast of things to come. It charts the course of the nation. "The necessity for loading the present budget with armament expenditures is regretted by every American. ‘A wry turn of fate places this burden of defense on the backs of a peace-loving people. We can meet the demands of armament because we are a people with the will to defend and the means to defend. The bpundaries of our productive capacity have never been set. The whole program set! forth in this budget has been prepared at a time when no man could see all the signposts ahead. One marker stands out all down the road. That marker carries not so much'an admonition as a command to defend dur demo-
" The budget of the United States
cratic way of life.
PITT]
BETTER TIRE | GUARANTEES PRICES I ® USED TIRES ’ ® CHANGE-OVER Tires 2° TIRE CO 838 N. Delaware St.
LOWER ® RENEWED TIRES Ca EN T.N | PLY
‘TRY A WANT AD IN THE TIMES.
¢
Deduct net appropriation for Federal old-age and survivors insurance trust fund - Net receipts (excluding returns from
their democratic rights and respon- in the same period of the fiscal siblities. It means an economic and year 1940. social system functioning smoothly However, these expenditurss un-
tial increase in production, employ-
onl wad Instional income, gal: 640 x 9 |debt, but the rise of debt charges in
’ relation to the development of our
and geared to high-speed performance. The defense budget, therefore, must go beyond the needs of
¥ ilé Army and Navy.
It is not enough to defend our national existence. Democracy as a way of life is equally at stake. The ghility of the democracies to employ their full resources 8f manpower end skill and plant has been chal- .. lenged. We meet this challenge by maximum utilization of plant and manpow=r and by maintdining governmental services, social security. and aid to those suffering through no fault of their own. Only by maintaining all of these activities can we claim the effective use of resources which our democra- ~ tic system is expected to yield, and thus justify the expenditures required for its defense.
The National Program
In this budget I am presenting a program for 1942, carefully worked ‘ out to combine these objectives. This _ program, including defense and non"defense activities, will cost about \. $17,500,000,000. For the same period, “ we expect the largest national income for the nation as a whole and also the largest tax receipts. In addition to, but essentially and rightly as a complement to this pro- - gram, the time has come for immediate consideration of assuring the continuation of the flow of vitally _ necessary munitions to those nations which are defending themselves against attack and against the irnposition of new forms of government upon them. Such a complementary program would call for appropriations and contract authorizations over and above this budget. The sum of all these defense efforts should be geared to the productive capacity of this nation expanded to literally its utmost efforts.
The Defense Program and Defense Expenditures
Sixty-two per cent of the expen- <= ditures proposed in this budget are for national defense. No one can predict the ultimate cost of a program that is still in development, for no one can define the future. When we recall the staggering changes in the world situation in the last six months, we realize how tentative all present estimates must be. These expenditures must be seen as -a part of a defense program stretching over several years, On the basis of the appropriations and authorizations enacted for national defense from June, 1940, up to the present time, plus the recommendations for supplementary appropriations and authorizations for 1941 and the recommendations contained in this budget for 1942, we have a program of 28 billion dollars. This is a vast sum, difficult to visualize in terms of work actually to be done. If we can prove that we are able to organize and execute such a gigantic program in a democratic way, we shall have made a positive contribution in a world in which the workability of democracy is challenged. This defense program marized below: Apprepriations, Authorizatiohs and Rec-
ommendations (June, 1940, 1941, 1943) in Millions of Dollars a
is sum-
Efpansion of Industrial Plant. er Defense Activities.......... 28.480
Tofal ........oovreinnvsnennnte "$23,480
COLDS:
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20 years ago a Buffalo druggist created an ointment for relief from the itching and smarting of Piles. It + brought such quick cooling, soothing, astringent relief that its fame . spread throughout the country, and . made Peterson’s Ointment a favorite, in thousands of homes. Ask your druggist for a 35¢c box ui Peterson's Ointment today, or 60c tube with applicator. Money back if you are not delighted with the relief.
You “Get Up Nights ~HowAre Your Kidneys?
t people never think of Cy Kidne; Sn these vital organs contain about 9
acids, poisons lood. Because they never get a real rest fs easy to see that you grow older the Kidneys may yee tired and slow down. These excess acids. and : ie may accumulate and poison your + system because of functional rather than - organic or systemic Kidney ad troubles. 8o if you have to get up nights, or suffer from burning, scanty or frequent pas- . sages, backaches an due to non-organic and non-systemlo. Kidney or + Bladder weakness, you'll make no mistake in : trying the prescription called Over ‘ten million packa; of Cystex have besh sold in 73 a nd have RaT8 siyen 3 Suth
p Joyous, bie thal it . fre aad un ar Fy Anh of money on bi Rin
i
derstate the progress already macle. In six months,
ditures will Be greatly accelerated.
1942. W, more tha fense within a 3-year period.
¢o-operate to the utmost.
Non-Defense Expenditures
tures permit a substantial reduc-
particularly for those
improved economic conditioris; | Obligations such as interest, and insurance benefits are fixed. Almost as fixed are the appro-
has already made legislative commitments—security grants to the states, Federal aid for highways,
surpluses, and similar itemis,
legislative action I have been able to reduce expenditures by (00 million dollars or 15 per cent. reduction and its relation to total expenditures are shown below:
Per
ExXvenditns res Cent
Expenditures n Million
’ Defense Program .
Fixed Comm tments , Other Activities ..
Total (excluding returns from GovSHument corporaon
$10, a 3,196 3,478
$i 154 ot 2.054 ‘7 4,004 23
——— ——
$17,483 81:},542 2, 29
carrying out the established poli-
in the regular operating government. budget message last year, the operating costs of the .reguldr departments are already down to the bedrock of the activities and functions ordered by the Congress. In spife of the defense pressurg, oj many of these regular programs. | expenditures will be kept below the level of the current year.
Social, Economic Programs
It is our policy to retain the ideals and objectives of our social and gconomic programs in the [ace of war changes. The costs of those programs affected by econarnic activity are flexible. Because of the defense effort some of these programs can be carried on at a lower cost. In other cases, no curtailment is possible without sacrificing our objectives. Lod We should realize, however, that even with a fully functioning defense effort there will remain special areas of need and that social security, agricultural bznefits, and work relief contribute f7o total defense in terms of thé health and morale of our people.
SOCIAL-SECURITY PROGRAMS.—I recommerici the continuance in full measure of the socialsecurity programs. This includes not only the payment of Cld-age benefits as required by law but also aid to youth and continued payments toward the state aid 07 old persons not covered by the insurance benefits; aids to children and to physically handicapped. Ii. total, these services will require, approximately the same expenditurés as in the current fiscal year, expept for some increase in grants tg the states as required by law. Furthermore, I deen it vital that the Congress give colisideration to the inclusion in the old-age and survivors insurance gsystem and the unemployment: gompeérisation system of workers not now covered. AGRICULTURAL PROGRAMS.— The increased domestic market for farm products, resulting from defense expenditure, will improve the income position of many . farmers. At the same time the curtailment of foreign markets, particularly in cotton, wheat and | tobacco, leave large numbers of these farmers in a serious plight without the continuance of the farm programs. After weighing both of these factors, I estimate reduction of 45 million dollars in the agricultural programs. We are definitely maintaining the principles of parity and soil conservation. PUBLIC WORKS. — During this
seems appropriate i defer construction of projects that interfere with the defense prograin by: diverting manpower and materials. Further, it is very wise for us to establish a
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contracts and |orders for 10 billion dollars have been placed. This means that in addia to present defense production, all over the country more factories, large and small, are getting ready rapidly to increase production. Or ice these ‘preparations have beeri completed actual deliveries and expen-
I expect actual expenditures to be stepped up to four and threequarter billion dollars in the six months ending June, 1941, and to almost 11 billion in the fiscal year shall - actually expend 25 billion dollars for de[This can be accomplished, but only if management, labor and cotisumers
The “increased military expendi- | tion in non-defense expenditures,
, activities which are made less necessary by
pensions
priations for which the Congress
the 30 per cent of tariff revenue set aside for reducing agricultural
Together, these fixed itenis' make up nearly half of the non-defense expenditures I am proposing for the fiscalsyear 1942. For the items subject to administrative rather than
This
of Dolla; h " 0 aC ange
Certain reductions are possible in
cies relating to public work/and relief, but little change can be made costs of As I indicated in my
though industrial production is fnow running 20 per cent above the| average level of 1929, there are [still many persons unemployed, or femployed as erinergency workers, of incapable of steady employment. The deferise program will le da to further re-¢mployment, and alfo to
and to a &hift from part- ~tim} full-time or over-time emplo [ert ent. But even under the full deiense program wé cannot expect full absorption of| the labor force bejiause some people just cannot be fitted into the picture. There will besome localities with a labor shortage at the same time that others hive a labor surplus. There will be ghortages of particular skills and [laptitudes at tiie same time that finers are in surplus. 1 recommend an spproprist 995 million dollars for work |relief for the full fiscal year. This [is 400 {million dollars less than the a hount required for the present fiscal| year. It will no’ be necessary to use this full amount if the defense : gram
on of
should result in a more genejal reemployment than is presently indicated. Tlie expenditure can §flso be reduced if employers will coniiribute by hiring unskilled or semi{skilled or older workers for thos jobs where special skills are not reguired. We must face the fact init even with wha{ we call “full employment” there wil! remain a large jiumber of persor's who cannot be afijusted to our industrial life. For this] group, the Government must mt work opportunities.
Financing the Nationd| Program |
ESTIMATES OF EXP ENDITURES | AND REVENUE| COMPARE.— The defense Progra dominates not only the expendifure side of the budget, but influerces also the expected revenue. Eco pmic activities 4nd national incomg| are rising to record heights. Fro | a higher naticnal income a greajler revenue wil! flow, although in lithe case of mos) taxes there is, of [rourse, a time Jaz. The revenue for [the fiscal year 1% 141 will reflect sonje of the increase in defense activities; the revenus for ing fiscal yea 11942 will
a further increase in the labor Gores
would | .
period of national ' emergency it 1
I
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a jol
er!
powe
3 fine gasolines priced to p—Red Crown,
pum
premium quality « « «
tel:
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6653 x24
Under present tax laws, deficits of 6.2 billion dollars in 1941 and 9.2 hillion dollars in 1942 may be expected. The calculations follow:
v Summary Expenditures Receipts
Excess of expenditures over receipts
‘Estimated in Millions of Dollars 1942 1941 $13,542 6653 6889
Less return of surplus funds from Government
corporations Deficit
In presenting the above calculations, I am assuming that the Congress will accept the recommendation of the Secretary of the Treasury that the earmarking of taxes for retirement of defense obligations be repealed; and the proposal of the Postmaster General that the 3-cent rate on.first-class postage be continued. . TAX POLICY—There is no agreement on how much of such an ex+ traordinary defense program should be financed on a pay-as-you-go basis and how much by borrowing. Only very drastic and restrictive taxation which curtails consumption would finance defense wholly on a pay-as-you-go basis. I fear that such taxation would interfere with the full use of our productive capacities. We have a choice between restrictive tax measures applied to the present national income and a higher tax yield from increased . national income under less restrictive tax measures. I suggest, therefore, a financial policy aimed at collecting progressive takes
out of a higher level of national in-
come. I am opposed to a tax policy which restricts general consumption as long as unused capacity is available~and as long as idle labor can be employed. We cannot yet conceive the complete - measure . of extraordinary taxes which are necessary to pay off the cost of emergency defense and to aid in avoiding inflationary price rises which may occur when full capacity is approached. However, a start should be made this year to meet a larger percent age of defense payments from current tax receipts. The additional tax measures should be based on the principle of ability to pay. Because it is the fixed policy of the Government that no citizen should
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I am as much concerned about our long-run need for an improved tax system as I am about the immediate necessity of financing the defense program.
I have often expressed my belief that no really satisfactory tax reform can be achieved without readjusting the Federal-state-local fiscal relationship. I urge a thorough investigation of the possibilities of-a comprehensive .tax reform; I propose that meanwhile we make all possible progress in improving the Federal tax system.
BORROWING—A substantial pari of the defense program must, of course, be financed through borrowing. Individual investors will be given increased opportunities to contribute their share toward defense through the purchase of Government securities. Such borrowing is not hazardous as long as it is accompanied by tax measures which assure a sufficient tax yield in the future. This raises the question of. debt limit. The Congress, by making appropriations and levying taxes, in fact, controls the size
‘of the debt regardless of the ex-
~| forced upon us.
istence of a statutory debt limit.
'| resources. °
The fight for recovery raised national income by more than 30 bil-
lion dollars above the depression
depth. In the same period the total annual Federal interest charges increased by 400 million dollars. Even if these interest charges increase, they scarcely can present a serious fiscal problem so long as a high level of national income can be maintained. . Investors are fully aware of this fact. The bonds of the United States Government are the safest securities in the world because they are backed by the best asset in the world—the productive capacity of the American people. Our tax burden is still moderate compared to that of most other countries. It should be borne in mind that
.our national debt results from wars |
and the economic upheavals following war. ‘These conditions are not of our own making. They have been The national ‘debt of almost all nations would be far lower today if competitive armaments had not existed during the past quarter of a century. If this war should be followed, as I hope it will, by peace in a world of good neighbors, then the complete elimi-
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