THE ADMINISTRATION: What to Cut?

During the fiscal year ending June 30, the U.S. will take in $67.7 billion instead of an estimated $64.5 billion. This will be more than enough, Secretary of the Treasury George Humphrey told Congress last week, to absorb an increase in Federal spending from the budgeted $64.3 billion to $65.9 billion. As a result, the U.S. budget for fiscal 1956 will have a surplus of $1.8 billion—eight times the expected $230 million. Treasury's Humphrey had a happy explanation for the welcome news: "The upsurge of prosperity in the nation has increased current Federal budget receipts."

By the time Humphrey finished talking, the argument about what to do with all that surplus had already begun. There was some pressure in Congress, largely from Democrats, for an election-year tax cut, but George Humphrey laid down a firm Eisenhower Administration line for another kind of cut: the surplus should be used, he said, to "make a most welcome reduction in our huge [$276 billion] national debt."