Reduction of Federal Expenditures

Report Outline
President Hoover's Budget Program for 1933–34
Economy Issues in the Short Session
Citizen Groups Advocating Federal Retrenchment
Government Functions and the National Income
Proposed Programs for Federal Retrenchment
Special Focus

President Hoover's Budget Program for 1933–34

The Federal budget for the fiscal year 1934, beginning July 1 next, will be transmitted by the President to Congress shortly after it meets for its short session on December 5, 1932. Preliminary discussion of the probable course of events at the short session indicates that much of the time of the two houses will be taken up with controversies over the extent and direction of federal economy. Pledges to reduce federal expenditures by very large amounts were given during the recent campaign by President Hoover and President-elect Roosevelt, and by most of the congressional candidates of the major parties. Nationwide organizations have been set up to advocate curtailment of governmental costs and activities, and to urge this program upon Congress. Their demands will be strongly reinforced by the prospect of a new deficit of a billion dollars or more at the end of the present fiscal year.

President Hoover, in his annual message at the opening of the last session of Congress, expressed the hope that it would be possible “by increase of taxes and rigid curtailment of expenditures to balance the budget for the next fiscal year, except to the extent of the amount required for statutory debt retirements.” Under this program the deficit for the current year would have been limited to approximately $496,000,000. The extent to which the deficit exceeds this figure will depend to a considerable extent upon the yield from the new income tax rates, collectable for the first time on March 15, 1933, and upon the extent to which the miscellaneous taxes of the 1932 act increase their yield above that of recent months.

A statement issued at the White House November 19, 1932, said the President was determined to present a balanced budget for the fiscal year 1934—the first under the Roosevelt administration. The President's intention to achieve a substantial reduction in expenditures had been announced earlier in the autumn. In his speech at Detroit, October 22, the President estimated that, comparing expenditures for the current year with those in the year ended June 30 last, a reduction of $1,000,000,000 had already been accomplished. The President's comparison between the total expenditures (excluding postal expenditures covered by postal receipts) of $5,006,590,305 in 1931–32 and the appropriations voted last spring and summer for the current fiscal year evidently assumed that supplemental deficiency appropriations for the current year, to be enacted at this winter's session, would not be substantial in amount. The 1932–33 appropriations already voted amount (excluding estimated postal revenues of $725,000,000) to $4,036,192,470, less estimated savings of $150,000,000 on account of the Economy act.