The President's News Conference

FEDERAL EXPENDITURES THE PRESIDENT. I want to again take occasion to emphasize to the full extent of my abilities the necessity, as a fundamental to economic recovery, that we practice economy in Federal Government expenditures. The country must realize that we cannot continue to live in a depression on a scale that was possible in times of prosperity.

The developments during the last week give great assurances to the country in this direction. The statement of the Republican and Democratic leaders 1 of both the Senate and the House show a real nonpartisan determination to cooperate with the administration to assure the country of the balancing of the Federal budget of expenditures and income of the fiscal year beginning next July. The amount of taxes that we will need to impose for this purpose, of course, depends on the amount of the further cuts that can be made in expenditures, and I welcome any reduction that can be made and still preserve the proper and the just functioning of the Government. With the general realization of the necessity for reductions in expenditure, we should at least be able to bring about the wholesale elimination of overlapping in governmental machinery, out of which we can get some very important economies. And with the program which has now been assured, we can also maintain the stability and credit of the Federal Government by having no increase in the national debt beyond that necessary to cover the deficit for this year, as with a balanced budget for next year we would have no increases in the debt.

¹ On January 6, 1932, the Democratic Congressional Policy Committee pledged support for budget-balancing efforts.

But the balancing of next year's expenditures and receipts and the limitation of borrowing implies the most resolute opposition to any new and enlarged activities of the Government. With the assurances that we now have from the leaders in Congress on both sides, I do not believe there is any ground for recurrent apprehension on the part of the public of a flood of extravagant proposals as represented by bills that have been introduced in the Congress. Those bills imply an increase in governmental expenditure by something over $40 billion in a period of 5 years, or over 8 billions per annum in addition to the current expenditure of the Government. The great majority of them, however, are introduced or have been advanced by organizations of some section-by some sectional interest, and are little likely to see the light of day from committees of Congress. They do, however, represent a continued spirit of spending in the country that just must be abandoned. I realize that drastic economy requires sacrifice of large hopes of expenditures promoted by such interests, but I do appeal to their sense of patriotism in these times not to press those demands on the Congress. They should, in fact, withdraw their pressures on public officials.

Rigid economy is the real road to relief to homeowners, farmers, workers, and every element of the population. The proposed budget of the Federal Government for the next fiscal year amounts to about 4 billions, of which over $2,800 million is for debt, military and veteran services, and nearly half the balance is for aid to employment in construction works and for aids to agriculture. And it is worth noting that the State and local expenditures in the country amount to nearly 9 billions from the taxpayers. The Federal Government itself ofttimes contributes to this by appropriations requiring matching of money by the States, and the result is pressure on State officials by the people interested in such expenditures who will receive the benefits from them, and makes the State officials and municipal officials the unwilling victims of Government costs.

But our first duty as a nation is to put our governmental house in order--national, State, and local. With the return of prosperity the Government can undertake constructive projects both of a social character and in public improvement, but we just cannot squander ourselves into prosperity. The reduction in governmental expenditures and the stability of Government finance is the most fundamental step that we can take to this end. It can contribute greatly to employment and the recovery of prosperity in agriculture, and it must be our concentrated purpose now.

I have no further news today.