The Budget: Watch Those Lights

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THE BUDGET

"It seems to me that it is a little dark in here," said Lyndon Johnson with feigned surprise to a group of U.S. businessmen at the White House one night last week. "If it is," he added, "it is because of the new budget; we are trying to economize on the light bill."

President Johnson appeared to be economizing on a lot more than the light bill in the fiscal 1965 budget that he sent to Congress last week. Everybody knew well in advance that the President would call for expenditures of $97.9 billion, down $500 million from the current budget, and a deficit of $4.9 billion. He said so in his State of the Union message three weeks ago. But, having already heard the punch line, Congress was anxious to hear the rest of the story. Just how was Lyndon going to do it? House Minority Leader Charlie Halleck thought he had the answer. Snipped he: "With mirrors."

Legerdemain on the Ledgers. Since the Budget and Accounting Act, requiring the President to submit to Congress an annual estimate of receipts and expenditures, was passed in 1921, every Chief Executive has practiced a bit of legerdemain on the ledgers. Johnson is as adept as any at the art, and he has in a measure practiced it in his first budget. A couple of billion-dollar items:

> Assuming that an $11.5 billion tax cut would be enacted by Feb. 1 (see below), Administration economists estimated a gross national product of $623 billion, up $38 billion. That assumption has already been knocked down, and the economists are now figuring on a $621 billion G.N.P. instead. And since the tax cut will be slower in materializing, so will the projected increases in personal income and corporate profits, which means that 1965's tax revenues will be lower than anticipated.

> A $1.2 billion cut in agriculture spending is partially based on the fact that wheat farmers, who rejected strict Government production control in a referendum last May, will receive lower price supports. This will save the budget $528 million. But it will cost the farmers the same amount—and in an election year that adds up to a heap of lost income. Even now the Administration is trying to push through voluntary controls that, if passed, would add hundreds of millions of dollars to the budget.

There are other feats of bookkeeping. The figure that makes all the headlines is the "administrative budget," but the best indicator of how much the Government is spending is the "national income account budget." It includes several expenditures omitted from the administrative budget, among them a hefty $29.4 billion item from such Government trust funds as Social Security. Next year's national income account budget: $121.5 billion, an increase of $2.4 billion from the current year. The figure would have been even higher but for the Administration's decision to sell off some $2.3 billion in such federal assets as housing mortgages. G.O.P. Representative Tom Curtis of Missouri, ranking House minority member of the Joint Economic Committee, took note of this disparity and complained that the President had rigged the budget to achieve swift expansion in Election Year 1964.