Reduction of Non-War Government Spending

Report Outline
Non-Essential Expenditures and the War
Federal Spending for Recovery and War
Curtailment of Non-War Expenditures
Special Focus

Non-Essential Expenditures and the War

Refusal of Congress to provide funds for operation of the Civilian Conservation Corps, even on a reduced basis, beyond the close of the fiscal year that ended June 30, gave the advocates of reduction of non-essential government expenditures their first conspicuous victory. While Congress has withheld various appropriations desired by the administration for new projects, and has slashed appropriations for certain non-war activities below budget estimates for the fiscal year 1943, it is only in the case of the C. C. C. that it has gone to the extent of abolishing completely an established government activity—the ax falling, incidentally, on the oldest and, in peacetime, the most generally approved of all New Deal relief schemes.

Economy Demands and Efforts to Curb Inflation

Initiation of a vast program of rearmament two years ago led those individual members of Congress and others who had long been striving to impose curbs on government spending to insist on the necessity of applying the utmost measure of economy to federal expenditures unrelated to national defense. After the United States entered the war, and appropriations for the fighting forces rose by tens of billions with no end in sight, demands for paring ordinary civil expenditures of the government to the bone redoubled. Progress in that direction has been impeded, however, by resistance on the part of pressure groups or the administration to specific economy proposals. Savings to date amount to considerably less than the $2,000,000,000 total which it has been contended could be cut from the government's annual bill for non-war activities. Failure to effect greater reductions may inject the question of curtailing non-war expenditures into this year's congressional political campaigns.

Ordinary federal expenditures now appear small beside the enormous amounts being disbursed for war purposes. The very fact, however, that such huge sums must be thus expended is cited as an argument for making all possible cuts in expenditures not essential to the war effort. It is contended, moreover, that when the government is endeavoring to discourage civilian spending in order to check inflationary tendencies, it should, for practical reasons and from the standpoint of morale, set an example by cutting out unnecessary expenditures of its own that contribute to the inflationary trend. The author of a study of this problem published by the Brookings Institution at the end of December, 1941, held that a drastic curtailment of all non-essential expenditures was “of the utmost importance from the standpoint of the war program as well as from the fiscal point of view,”