RECORD BUDGET

Ashburton Guardian, Volume 69, Issue 77, 11 January 1949, Page 3

RECORD BUDGET

Foreign Aid and National

Defence

MR TRUMAN’S FINANCIAL PLANS (N.Z.P. A.—Copyright) (Rec. 9.40) WASHINGTON, Jan. 10. President Truman to-day asked Congress to provide him with 21,000,000,000 dollars for foreign aid .and national defence programmes in the fiscal year ending June 30, 1950. These two items constitute half of the expenditure allowed for in' a record peace-time budget.

Income is estimated at 40,985,000,000 dollars and the expenditure 41,858,000,000, leaving a deficit of 875,000,000, and a national debt of 251,925,000,000. The figures for the current fiscal year are: Income 39,580,000,000, deficit 600,000,000, national debt 251,569,000,000. Mr Truman made it clear that later this year he would ask for substantial funds to give military assistance to members of the North Atlantic Military Alliance and certain other countries.

The President said he would recommend new general tax legislation to raise revenues by 4,000,000,000 dollars. No estimate of receipts from new taxes is included in to-day’s budget but are expected to provide about 2,000,000,000 for the part of the year they are effectice. This additional revenue could be used to finance military aid programmes if none of it was used for debt retirement or reducing the deficit. , , By far the largest item in the Budget is for national defence expenditure, which ’is estimated to total 14,300,000,000 dollars compared with 11,800, 000,000 for the current year. Regarding expenditure in the sueceeding year ending June 30, 1951. Mi Truman stated “defence expenditures to maintain the present programme aie expected to be higher in 1951 as a iesult of the expanding programmes now under way and larger orders already placed for aircraft, ships, other material and equipment, which will be delivered and paid for in the next few years.”

Most Powerful Peacetime Force

Apart from any possible expenditure under the foreign military aid programme, the total expenditure for international activities in the yeai ending June 30, 1950, is estimated at 6 700,000,000 dollars, compared with 7,200,000,000 for the current year. Mr Truman said: “Expenditures for economic assistance may be expected to decline in subsequent years with continued progress toward world economic recovery, but any forward estimate of our international expenditures must be highly tentative in view of the present uncertain world situation.” , , European Recovery Aid is expected to cost 4,500,000,000 dollars in the next fiscal year, compared with 4,600,000,000 in the current year. The Budget also provides for assistance totalling 600,000,000 dollars to Greece, Turkey, China and Korea. Mr Truman expressed the hope that the international wheat agreement will be re-negotiated. He allowed for approximately 56,000,000 dollars to “cover the Government’s . part in bridging the gap between the price of wheat for the American farmer under the United States Price support programme and the price at which the wheat is made available to foreign purchasers, under the agreement.” The estimated, expenditure .of 14,300,000,000 dollars on national defence includes 13,100,000,000 for the Army, Navy and Air Force, and 530,000,000 for the stock-piling of strategic material.

The President pointed out that the military forces recommended in the Budget, are the most powerful the United States has ever maintained in peacetime.

The Air Force will continue at about its present strength of -f 12,000 officers and men on active duty. There will be a minimum of about 48 combat groups and 27 groups of Air National Guard. The Air Force programme contemplates by June 80, 1950, an active strength of 9200 aircraft of all types. The strength of the Army next year will be continued at 077,000 officers and men backed by a National Guard with an average strength of 32-5,000. personnel and an organised reserve of 230,000 in regular training.

Size of Naval Fleet

Naval and- marine forces of a strength of 527,000’ officers and men are provided. ’ The size of active naval fleet is planned to be 731 vessels, including- 288 combat ships. Expenditures for naval ship construction are estimated to be 406,000,000 dollars for next year, an increase of about 100,000,000 over that of the current year. The President struck an urgent note in appealing for speeding up the atomic energy programme in the interests of both national welfare and national security. He said: “The present high costs of rapidly accomplishing these purposes must be balanced against the ultimate and far greater costs of failure to move ahead vigorously in this field.” Special emphasis would be given to the development of nuclear reactors as an eventual means for converting atomic energy into electricity and into power for the propulsion of ships and planes. President Truman asked for 792,000,000 dollars for'the United States Atomic Energy I Commission, compared with 662,000,000 in the current year., Expenditure oh atomic weapons next year is estimated at 210,000,000, compared with 180,000,000 in the current year.

Major items in the domestic, portion of the Budget are: 5,496,000,000 dollars for services and benefits to exservicemen, 2,355,000,000 for health and social welfare, 1,861,000,000 for the development of natural resources, including atomic energy. The interest on the National Debt is 5,450,000,000 dollars.

Mr Truman blamed the outgoing Congress for having prevented his making any sizeable reduction of debt •because it enacted a substantial reduction of'taxation. Mr Truman said the payroll deductions for larger and new social security benefits would be increased by 1,960,000,000 dollars. This amount was not included in the Budget.

The Budget includes 1,030,000,000

dollars for relief in Germany and Japan. Mr Truman, in his Budget message, said: “The Budget is founded on the conviction that the United States must continue to exert a strong and positive effort to achieve peace in the world and growing prosperity .at home.” The maintenance of existing rates of taxation would result in a deficit of 873,000,000 dollars, but in a period of high prosperity it was not sound for the Government to operate at a loss- Therefore he requested an increase in taxation of 4,000,000,000 dollars to achieve a surplus and permit of a reduction of the public debt.