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20 Tax Foundation's Washington News 1 (1968)

handle is hein.tera/wingnews0022 and id is 1 raw text is: 1725 K Street, N.W. Washington, D. C. 20006 CONGRESS APPARENTLY RE.WINS FIRM ON TAX INCREASE ISSUE The President's state of the union message this week was of necessity couched in general terms, and the details of his program and proposals will be supplied later in the budget message and other special messages. Initial reactions to this week's ressage, nonetheless, suggest that it signals no change in direction or new approaches -- and, in particular, has apparently failed to move the Congress on the tax increase issue. Somewhat surprisingly, the message left the impression here that the Chief Executive was challenging the Congress on the tax increase issue, rather than attempting to mollify the opposition with at least some meaning- ful gestures toward spending restraints. True, the President insisted that the projected expenditure total of $186 billion for fiscal 1969 -- under the new budget concept (see page 2) --- represented a tight budget. But, while containing far fewer recommendations than in recent years, the message did propose the establishment of several new programs and major expansions in a number of existing ones --- a $2.1 billion manpower training program for the hard-core unemployed; a tripling of appropriations (to $1 billion) for the model cities program; a start on a 10-year program to building six mil- lion low and middle-income housing units; a new child health program; full funding of the $2.2 billion anti-poverty program authorized last year; a new program to provide financial aid for college students; anti-crime legislation; and various consumer protection measures. Presumably such spending increases are to be largely offset by decreases in other programs, but only careful analysis of the forthcoming budget will reveal just how this is to be done. In any event, the budget totals supplied in this week's message indicate that the overall increase in Federal spending in fiscal 1969 over the current year are likely to about equal the additional revenue to be de- rived from the proposed tax surcharge -- and still leave a budget deficit, on the new basis, of some $8 billion. This may prove unacceptable to Chairman Wilbur Mills (D-Ark.) and the membership of the House Ways and Means Committee. Even some sup.. porters of the tax increase proposal are reported as agreeing that the President again failed to make a case. The Committee reportedly already has decided to lay aside the tax increase proposals again after two or three days of hearings next week, and turn to other matters (see page 2). Chair- man Long (D-La.) of the Senate Finance Committee has indicated he would oppose the tax increase at this time. And Chairman Hahon (D-Tex.) of the House Appropriations Committee predicts the battle of the budget will be resumed, probably with increased intensity, where it left off a short month ago. January 19, 1968 vol..2U N..-

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