Government Spending

November 30, 1949

Report Outline
Federal Deficits and Budget Demands
Reform of Appropriations Procedures
Congress vs. Executive in Economy Moves

Federal Deficits and Budget Demands

Large 1950 Deficit and Prospect of more Deficits

New Budget estimates on Nov. 1, boosting the anticipated deficit in the current fiscal year to $5.5 billion, served as a sharp reminder that the federal government, despite general business prosperity and large tax collections, is continuing to live beyond its income. Intimations from President Truman that he would seek higher taxes to overcome the deficit met a cool reception on Capitol Hill. Democratic and Republican spokesmen alike held out little hope that Congress would accede to such a request. There was wide agreement, on the contrary, that the problem of balancing the budget must be approached, not by the route of increases in taxes, but by that of decreases in government spending.

Criticism of the administration's spending policies from members of the opposite political party has been growing as the mid-term election year of 1950 draws near. But the political implications in the budget situation were made doubly apparent, Nov. 21, when so prominent a member of the President's own party as former Secretary of State Byrnes joined the critics of government spending. In an address that day Byrnes said:

Our real trouble is debt and taxes. We cannot cure it by more debt and more taxes. We should devote to cutting expenditures some of the thought we are devoting to taxing and borrowing. But cutting expenditures is not seriously considered in the executive departments, and new taxes will not be seriously considered in Congress. So deficit spending will continue.

ISSUE TRACKER for Related Reports
Federal Budget and National Debt
Sep. 01, 2017  National Debt
Jul. 12, 2013  Government Spending
May 15, 2012  State Capitalism
Mar. 18, 2011  National Debt
Nov. 14, 2008  The National Debt
Dec. 09, 2005  Budget Deficit
Apr. 13, 2001  Budget Surplus
Feb. 01, 1991  Recession's Regional Impact
Jan. 20, 1984  Federal Budget Deficit
Sep. 09, 1977  Federal Reorganization and Budget Reform
Nov. 24, 1972  Limits on Federal Spending
Jan. 08, 1969  Federal Budget Making
Dec. 06, 1967  National Debt Management
Aug. 01, 1962  Fiscal and Budget Policy
Nov. 27, 1957  National Debt Limit
Mar. 20, 1957  Spending Controls
Dec. 24, 1953  Public Debt Limit
Feb. 13, 1952  Tax and Debt Limitation
Nov. 30, 1949  Government Spending
Jan. 06, 1948  Legislative Budget-Making
May 23, 1944  The National Debt
Feb. 01, 1943  The Executive Budget and Appropriations by Congress
Dec. 27, 1939  Revision of the Federal Budget System
Oct. 10, 1938  The Outstanding Government Debt
Nov. 20, 1937  Budget Balancing vs. Pump Priming
May 02, 1936  The Deficit and the Public Debt
Oct. 19, 1934  The Federal Budget and the Public Debt
Feb. 10, 1933  Extraordinary Budgeting of Federal Finances
Dec. 01, 1932  Reduction of Federal Expenditures
Dec. 01, 1930  The National Budget System
Oct. 02, 1930  Federal Revenues and Expenditures
Nov. 02, 1927  The Public Debt and Foreign Loans
Nov. 15, 1926  Rising Cost of Government in the United States
Feb. 05, 1925  Four Years Under the Budget System
Deficit, Federal Debt, and Balanced Budget