THE PRESIDENCY: Balanced Thinking

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In 32 speeches on his "intake" Western tour, Franklin Roosevelt discovered two subjects that were sure-fire with all audiences. One was Peace. The other was balancing the budget. First thing the President did on his return was to reshape U. S. foreign policy. Last week he turned his attention to the budget.

Basic theory of New Deal economy has been that the Federal Government should spend in lean years, save in fat ones. Last week, while many another U. S. citizen had begun to wonder whether the country was on the verge of a major business slump, the President made it clear by his saving intentions that he finally felt that the lean years were over. The week began with a new budget estimate showing a net deficit of $695,000,000 for fiscal 1938, $277,000,000 more than had been estimated last April (see p. 19). During the rest of the week Franklin Roosevelt emphasized & re-emphasized two points: 1) that he does not expect the deficit to grow any larger, and 2) that he expects the Federal Government to take in as much as it spends in the fiscal year ending with June 1939.

Having announced that PWA and RFC would make no further commitments, he was visited by Indiana's New Deal Senator, Sherman Minton. Mr. Minton left the White House, telling reporters ruefully: "I asked for a hell of a lot of PWA money and didn't get a dime."

In opening a nation-wide drive for Community Chest funds, he announced that the Government "must more and more narrow the circle of its relief activities." warned relief agencies that "unless Federal taxes are to be greatly increased, the expenditures have to be brought within the existing tax receipts."

In duplicate letters to South Carolina's Ellison D. Smith and Texas' Marvin Jones. Chairmen of the Senate and House Agriculture Committees, he hammered home the point that "any new legislation should not unbalance the expected balancing of the budget . . ." and that any new Treasury obligation should be "backed 100% by additional receipts from new taxes."

At the first of his bi-weekly press conferences, he blamed the increased 1937-38 deficit on Congressional appropriations, said he expected next year's budget balance to be achieved without new or increased taxes. At his second press conference, he repeated "for about the 200th time" that next year's budget would be balanced.