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24 Tax Foundation's Washington News 1 (1972)

handle is hein.tera/wingnews0026 and id is 1 raw text is: January 2b, 1972 vo1. 2L No. 1 1725 K Street, N.W. Washington, D. C. 20006 NIXON BUDGET PIDJECTS RECORD DEFICITS, ASKS SPENDITIG RESTRAINT The Federal budget for fiscal 1973, submitted to Congress this week by President Nixon, projects unified budget deficits of $38.8 billion in the current fiscal year and $25.5 billion for fiscal 1973 (see page 2 for fur- thur details). On the Federal funds basis -- excluding trust fund transac- tions, and roughly comparable to the traditional administrative budget con- cent in use un to fiscal 1969 -- deficits are estimated at $44.7 billion in fiscal 1972 and $36.2 billion in fiscal 1973. On either basis, these huge deficits have been exceeded only in three World War II years. In certain respects the fiscal 1973 budget is a budget of paradoxes. It stresses the need for expenditure restraint, but projects spending in- creases of more than $25 billion in the current year and almost $10 billion more in fiscal 1973. It again stresses adherence to the full employment budget spending guideline - holding spending within the revenues which the tax structure would generate if the economy were operating at full em- ployment - but was quickly supplemented by a Presidential statement urging adoption of a rigid ceiling to hold outlays to no more than the $246.3 billion projected for fiscal 1973 (see page 3). It projects a small full employment budget surplus, but only after assuming some downward adjust- ments in budget outlays under full employment conditions; if the full em- ployment budget were calculated on the basis of the $246.3 billion of uni- fied budget spending projected for fiscal 1973, it, too, would be in deficit. The first indicators of the attitude of the Congress toward the Presi- dent's fiscal policy proposals may be forthcoming when the House Appropria- tions Committee considers his rigid spending ceiling proposal, and when the House Ways and Means Dommittee next week acts on the request for a $50 billion increase in the statutory debt limit (see page 3). The new budget includes some new program proposals, but none as costly or dramatic as those proposed in recent years. However, the President does urge action this year on what he refers to as the unfinished agenda, in- cluding welfare reform, revenue sharing, and executive reorganization -- keystones of his New American Revolution program. The Senate Finance Com- mittee, now holding hearings on the House-passed welfare reform bill (H. R. 1), is expected to vote major modifications in that proposal. The House Ways and Means Committee clearly is not favorably disposed toward the Nixon general revenue sharing plan, but may soon vote out an equally costly State- local aid program. Little chance is seen for action on executive reorgani- zation proposals, or for the six special revenue sharing (grant consolida- tion) proposals. (NOTICE: Effective with this issue Washington News will 1a distributed on the second and fourth Friday of each month, when Congress is in session.)