TABLE D.-Number of taxable individual and fiduciary returns, tax and net income, 1913–46, and estimated for 1947-48-Continued Not available. The total number of taxable and nontaxable returns filed were as follows: 1913, 357,598; 1914, 357,515; and 1915, 336,652. 2 Receipts (including fines, penalties, additional assessments, etc.) for the fiscal year ended June 30 immediately following as shown in annual reports of the Commissioner of Internal Revenue. 3 Not available. Includes war excess profits taxes of $101,249,781 on individuals and $103.887,984 on partnerships. 5 Tax base for taxable returns with net incomes of $2,000 and over. There were 1,591,518 taxable returns with net incomes of $2,000 and over, for which the tax amounted to $675,243,450. 6 Amount after the 25-percent reduction provided by sec. 1200 (a), Revenue Act of 1924. ? Excludes additions to liability under the Current Tax Payment Act of 1943 amounting to $2,555,894,000. Obtained from collectors' monthly report to Commissioner of returns filed. Estimated. Source: Data for 1916-45 from Statistics of Income. Senator BARKLEY. You read that with as much fervor as if it had been a product of your own brain. The CHAIRMAN. But without conviction, Senator. I do not suppose comments are in order, because the Secretary is not here. Later, if any member of the committee wishes the Secretary to come before the committee, we will be glad to call him. Mr. Webb is our next witness. Mr. Webb, will you state your full name and your business for the record? STATEMENT OF JAMES E. WEBB, DIRECTOR OF THE BUREAU OF THE BUDGET Mr. WEBB. James E. Webb, Director of the Bureau of the Budget. The CHAIRMAN. Will you proceed with your statement, Mr. Webb. Mr. WEBB. Mr. Chairman and members of the committee, you have asked me to appear before the committee today to discuss Federal expenditures. It will be my purpose to discuss the budget estimates for 1949 and to indicate some of the trends which may be reasonably expected for 1950. Before taking up the figures for 1949, I should like to point out, with respect to the fiscal year 1948, that I can add little to the figures presented in the 1949 budget. Those figures indicate 37.7 billion dollars of expenditures during the current fiscal year, ending June 30, 1948. Since the budget was submitted in January there have been a number of developments which will cause variations in the estimates, and, without doubt, other modifications will appear during the next few months. None of these variations is material enough to warrant any revision of the 1948 expenditure total at this time. With respect to the fiscal year 1949, I should like to summarize the policies and assumptions on which the budget was based. The general policy, expressed in the President's instructions to the Departments and agencies for the preparation of 1949 appropriation requests, was to hold programs for that year at or below the 1948 level. Exceptions were made only where activities no longer could be deferred. New expenditures were limited to those essential for the discharge of international responsibilities or to meet urgent needs at home. Further, the expenditue estimates for 1949 were based on the assumption that prices and employment would remain at about the level of last fall. Rises in prices inevitably will mean increased costs for most of the things the Government buys. Likewise, a decrease in agricultural prices or an increase in unemployment would mean that expenditures would rise for such mandatory programs as farm price support, veterans' unemployment allowances, and public assistance. In his budget message, the President stressed that fact that the size of the 1949 budget was determined in large part by heavy expenditures resulting from the war and its aftermath. I should like to quote two sentences from that message: The plain fact is that our budget must remain high until we have met our international responsibilities and can see the way clear to a peaceful and prosperous world. Prudence demands that we plan our national finances in full recognition of this fact. Present indications are that this Nation will have uncertain world conditions for an extended period. Practically everything we do to meet these conditions will cost money and be reflected in the budget. These facts have added significance when Federal expenditures are projected beyond the fiscal year 1949. Unless world conditions change drastically for the better, the Federal budget in 1950 will undoubtedly be large. That fact cannot be ignored in any consideration of legislation on taxes. We Americans have always been optimistic. The hard facts of international life do not, in my opinion, justify the degree of optimism which would make it possible to forecast a 1950 budget materially lower than that for 1949. In the preparation of the 1949 budget the President reduced departmental requests for appropriations by over $7,000,000,000. Further reductions in appropriations are being sought by the Congress. At the same time, however, individual members, as representatives of their constituents, are being asked to seek funds for projects which are considered of great local importance. For example, in connection with that part of the 1949 budget covering flood control and river and harbor work performed by the Army engineers, over 100 Members of Congress presented statements to the House Appropriations Committee to support specific projects, many of which had been omitted from the budget under the rigid criteria applied. I mention this example, not in criticism, but to emphasize what I believe is our common experience that the pressure for Federal expenditure shows no sign of diminishing. Expenditures in the budget for the fiscal year 1949 were estimated at 39.7 billion dollars. Of this amount, $34,000,000,000 will be expended under existing laws. The balance of 5.7 billion dollars will be needed to pay obligations incurred under new legislation recommended by the President. The recently authorized increased subsistence allowances for veterans are estimated to result in an increase in expenditures of approximately $150,000,000 in 1949. However, offsetting savings may be realized if the Congress should enact legislation to curtail avocational and leisure-time training. When the budget was submitted in January, expenditures under new international aid programs other than the European recovery program were estimated at $140,000,000. As the needs have developed, it now appears that expenditures may amount to as much as $600,000,000, largely because of increases in the estimates for the Chinese and GreekTurkish aid programs. Similarly, the President's recommendations on housing forwarded to Congress last week will require somewhat higher expenditures in 1949 than were estimated in January. Such changes as these will necessitate offsetting economies in other programs if the 1949 expenditure total is not to exceed the January estimate of 39.7 billion dollars. Perhaps the simplest method of showing expenditure trends is to relate 1949 figures by programs to the corresponding figures for the current fiscal year. For this purpose I submit a comparative table based on the figures as printed in the budget document in January. Brief notes explain the reasons for major changes. (The table is as follows:) TABLE I.-Federal budget expenditures-Comparison of estimated Federal Budget expenditures, fiscal years 1948 and 1949, as shown in 1949 Budget document |