FISCAL: Last Dollar

The day after President Roosevelt sent his budget message to Congress, citizens thumbed through the letter "S" in dictionaries looking for words to express emotion. Republicans magnified their feelings with "shocking." Democrats minimized theirs with "startling." Some liked "stupendous," others preferred "shudder," but most overworked word in the U. S. vocabulary was "staggering." The President planned to have the U. S. spend $31,179 a minute—every minute night and day—till June 30. He planned to have the U. S. borrow $6,000,000,000 before June 30—an amount slightly larger than the total amount of U. S. currency in circulation. He proposed to have the U. S. spend $17,000,000,000 in this fiscal year and next. He foresaw a public debt by July 1935 of nearly $32,000,000,000— $6,000,000,000 higher than the post-War peak. The budget for fiscal 1934 (ending June 30 next) was presented to Congress in December 1932 by Herbert Hoover. That budget was revised by Franklin Roosevelt during the special session of Congress last spring. Last week it turned up again along with the budget for fiscal 1935, in the President's twin-budget message.

Outlay. When President Hoover planned the budget for fiscal 1934 the expected outlay for the Government came to $3,257,000,000.* President Roosevelt did two things to that figure. He lopped off $360,000,000 of veteran's pensions, and he set aside in a separate budget all emergency expenses. Last week's budget message estimated the Government's ordinary expenses (the cost of running its various departments, of paying veterans' pensions, interest on U. S. obligations, etc.) at the comparatively modest figure of $2,531,000,000 for 1934 and $2,487,000,000 for 1935 (see table). To these totals he added half a billion (for 1934) and three-quarters of a billion (for 1935)—entirely for expenditures by the AAA (which, because they are taken care of by processing taxes, he did not class as emergency expenses).

Income. The President estimated U. S. revenues, including processing taxes, at $3,260,000,000 for fiscal 1934 and $3,975,000,000 for fiscal 1935. To estimate these revenues it was necessary to guess at the state of business. His guesses (technically based on the Federal Reserve Board's index of industrial production) : business in fiscal 1934 to average approximately the same as business in 1931, business in fiscal 1935 to average just a shade better than business in 1930. His estimates of revenue did not include about $50,000,000 which may be added if the Federal liquor tax is raised to $2 a gallon (see p. 15), nor about $150,000,000 which may be raised by plugging holes in the income tax law, nor any prospective War debt payments. In spite of these omissions, 1934 revenue was estimated to exceed ordinary expenses plus AAA's half billion by $215,000,000. And 1935 revenue was estimated to exceed ordinary expenses plus AAA's three-quarter billion by $737,000,000.