The Budget: Cutting the Butter

“The budget for 1967,” said the President, “bears the strong imprint of the troubled world we live in.” The figures presented to Congress this week bore him out. The Federal Government’s 1966-67 administrative budget totals a record $112.8 billion, $6.4 billion more than the expected spending for the current fiscal year.

The increase largely reflects the cost of the war in Viet Nam, which Lyndon Johnson estimates at $10.5 billion (up from an estimated $4.8 billion for 1965-66) out of a total defense outlay of $60.5 billion. In addition to maintaining an ever-growing combat force in Viet Nam, war costs include funds for a new Marine division, a second nuclear aircraft carrier, stepped-up production of giant C-141 jet transports, and development of the even-bigger C-5A, plus two new types of aircraft—the movable-wing FB-111 bomber and the lightweight COIN (for counterinsurgency) ground-support plane.

Tighter Space. “We are a rich nation,” Johnson emphasized, “and can afford to make progress at home while meeting obligations abroad.” Nonetheless, he conceded, “the rate of advance in the new programs has been held below what might have been.” While non-military spending will total $52.3 billion, an increase of $2.5 billion, the war on poverty was allotted only $1.6 billion instead of the hoped-for $2.5 billion. Federal spending outside the war, Great Society programs, and interest on the national debt will be trimmed by $2.3 billion. One notable victim is the space program, which will receive $300 million less than last year, suffering its first cutback in the eight-year history of the National Aeronautics and Space Administration.

“No One Can Predict.” The Government will spend $670 million less for defense housing. Funds for the Atomic Energy Commission were slashed by $90 million. Other savings range from a $2.8 million cut in State Department cultural programs to a $100,000 reduction in translating foreign-fishery reports. In addition, the President requested restoration of the recently canceled excise tax on cars and telephones, proposed to speed up tax collections and sell federal mortgages to private investors. Thus, with revenue from a 1966 gross national product estimated in the budget at $722 billion—up $46 billion from 1965’s record—the Administration estimates that it can hold the deficit to $1.8 billion.*

Johnson admitted that his calculations were highly tentative. Said the President: “No one can firmly predict the course of events in Southeast Asia.

They depend not only upon our own actions but upon those of our adversaries. As a consequence, ultimate budgetary requirements could be either higher or lower than amounts I am now requesting.”

Fiscal Flaws. Actually, foreign affairs are only one reason for the chronic imprecision of U.S. budgets. Last week the Committee for Economic Development, a prestigious private research group, touched on some of the other causes. Among “serious inadequacies” in the budgetary process, said C.E.D., is insufficient programming by Government departments, despite Johnson’s orders last August to all federal organizations to set up Pentagon-style computerized cost-analysis systems. The C.E.D. also faulted Congress, pointing out that it rarely debates overall policy questions implicit in the budget, such as a “rational balance” between space exploration and urban renewal, which might facilitate longer-range financing. Instead, the budget is studied piecemeal in subcommittees run by “strong chairmen not committed to a common program or even to common goals.”

Naturally, such fiscal flaws are unavoidable in a democracy, in which the people’s representatives are supposed to have a hammerlock hold on the people’s purse strings. But C.E.D. feels that Congress could at least fund long-range projects for three to five years rather than annually, to help minimize the need for supplemental appropriations. To hold down another congressional practice—the overfunding of some favorite projects—C.E.D. recommends that the President be given “clear statutory authority” to withhold funds appropriated but “found not to be essential.”

*One little-known source of Government income: royalties from commercial use of the U.S. Forest Service’s Smokey the Bear symbol on such products as T shirts and belt buckles, which have been increasing by $8,000 a year, now bring in $43,000 annually.