THE ADMINISTRATION: Balanced Budget in Sight

Reiterating its faith in the continued growth of the U.S. economy, the Administration last week came close to outright prediction that tax revenues, higher than estimated, plus careful cost-cutting, can wipe out the $1.7 billion federal deficit and balance the budget. After discussing proposed 1957 expenses with the President at Gettysburg, Budget Director Rowland Hughes told reporters that the Government's income should match its estimated $63 billion outgo, not only in 1957 but in the current fiscal year ending June 30, 1956.

Neither stringent cost-cutting nor the Geneva conference failure, said he, would substantially affect military expenditures (now $34.5 billion yearly). "Our budgets for the defense program have not been built on day-to-day shifts in diplomatic discussions. We have built them on a long-range basis of strengthening U.S. power. We are engaged in a regular, permanent strengthening program."

But Hughes studiously declined to commit the Administration to tax cuts in 1956. When asked if he had not in effect foreshadowed them by his budget predictions, Hughes replied: "I don't think you can put those words in my mouth, sir. I wish you could."