The President's News Conference on the Review of the Budget

THE PRESIDENT. I want to make a preliminary statement before I read this statement which you have in your hands.¹

¹ In addition to the statement which the President was about to read, the reporters had copies of a more detailed statement (see Item 181) to which frequent references are made throughout the news conference.

[ 1.] In the budget for 1945, that is, from June 30, 1945, to June 30, 1946--that would be the 1946 budget--the budget was for $103 billion. Sixty-three billion dollars was spent that year, and rescissions were made in the neighborhood of $55 billion of outstanding appropriations.

The estimated budget for 1947, that is, the 1946-47 budget, was for expenditures of 41.5. Expenditures finally wound up by being 42.5.

The estimated budget for this year, that is, for 1948--beginning June 30 this year and ending June 30 next year--was 37.5. Actual budget estimates for the period were about 31--between 31 and 32 billions. So you will see that the actual expenditure of funds in spite of the windup of the war has been cut more than a third since the war ended--more than two-thirds since the war ended. And if you will examine the figures very carefully, you will find that these budgets have been made with extreme care and caution.

Now I will read the statement:

"In any analysis of the Federal budget, we must always keep in mind the fact that about three-fourths of our expenditures relate directly to war, the effects of war, or our efforts to prevent a future war. Thus, as finally approved by the Congress, 28 percent of our expenditures for 1948 are for national defense, 20 percent for our veterans' service and benefits, and 14 percent for interest on our national debt (which is largely a result of war), and of almost 12 percent to support our international programs and activities for world peace. This leaves 27 percent for all other Government programs, of which the share of 'general Government' is only 4 percent." ¹

¹ The following paragraph, which appears at this point in the text of the White House release of the same day, was omitted in the reading of the statement:

"From another point of view, 40 percent of the civilian employees of the Government are engaged in national defense activities, 10 percent in the conduct of our veterans programs, and 22 percent in the postal service. This leaves only 28 percent to carry out all other Federal activities."

And I have heard it said they were going to take $9 billion out of that, and there's only 7.6 in it.

[Continuing reading] "We cannot disregard these facts if we are to reduce our expenditures intelligently and without crippling those public services to which we are by law committed.

"When I transmitted the 1948 budget to the Congress last January, I said that it was a realistic budget and as complete as I knew how to make it. I added that in its preparation we had been forced to make drastic reductions in the requests for a number of worthwhile programs because of the urgent need to cut expenditures.

"Now after 8 months we can look back on many events which were then hidden in the uncertainties of the future, and on new conditions which could not then be anticipated. Nevertheless, the fundamental fiscal policy on which the budget was based has proved sound. Furthermore, the searching review of the budget by the Congress and the country must convince everyone willing to look squarely at the facts that it was a tight budget. It was, in fact, a hard-boiled budget predicated on an efficient and economical administration of the programs established by the Congress.

"The budget included in detail for the first time all Government corporations and war agencies. This enabled both the Congress and the people to get a better perspective and a clearer understanding of the necessarily complex ramifications of the programs of the Federal Government. These programs are all authorized by the Congress in response to the needs or demands of the various segments of our democracy. They are carried out only so long as the Congress continues its authorization and supports them through appropriations. Hence, it is essential that all citizens and the Congress continuously weigh the need for these services against the costs if we are to strike a just balance between the two.

[2.] "The actual reduction in expenditures of 528 million dollars for the fiscal year 1948, as indicated in the budget review, reflects this balancing of needs against costs by the Senators and Representatives in the Congress, as they came to grips with the problem during its session just ended. The indicated surplus of $4.7 billion applied to reducing the national debt, will be an important bulwark against the severe inflationary pressures to which the country is now subjected. The international situation has also made it imperative that we plan for a surplus, both in view of the problem of promoting world recovery and of the need for a reserve against emergencies, whether at home or abroad. Elementary prudence requires that we be prepared to face the unforeseeable as well as the foreseeable. This, we are now in a much stronger financial position to do than we were last year."

I want to add to that, too, that--don't let anybody fool you about how the surplus for 1947 came about. It was by cutting expenditures a billion, 500 million dollars by the executive, and in no other way was that $700 million surplus arrived at. Expenditures were cut a billion and a half by the executive, and that's how we came to have the $734 million surplus.

All right now, fire away.

[3.] Q. Mr. President, does your remark about the--this necessity for elementary prudence and your other remarks in regard to the surplus mean that you are opposed to any tax reduction next year?

THE PRESIDENT. I will answer that question when next year comes around. We will see what the situation is then. I can tell you more about it when I know a little more about what the situation will be next year. I won't hesitate to announce it when the time comes.

Q. Then we will be unwise to interpret this as meaning that you are definitely against--will definitely oppose reduction?

THE PRESIDENT. Well, I will tell you about that when the time comes to make a statement. When the 1949 budget is prepared and we know to some extent exactly where we stand as to what our foreign commitments are going to be, then I can tell you more about tax reduction.

[4.] Q. Mr. President, when you mention the international situation there and the need for surplus, do you have in mind the Marshall plan?

THE PRESIDENT. Yes.

[5.] Q. Mr. President, will the surplus that you have actually show a reduction of the Treasury statement on the public debt?

THE PRESIDENT. What's that?

Q. Will the surplus that you show in the budget estimates also be reflected in the Treasury statement and the reduction of the public debt ?

THE PRESIDENT. Yes. Whenever the surplus accumulates it will show in the budget because that is where it is going to be used.

Q. No transfer immediately?

THE PRESIDENT. NO. You can't transfer it until you get it. This budget is for 1948, which year ends on June 30th.

[6.] Q. Could you tell us what sort of national income level you expect to see throughout the year?

THE PRESIDENT. Well, that is a hard conclusion to arrive at. We are basing this budget on the changes in this budget, and the increased tax income on the increased national income--a very much increased national income. I can't tell you the exact figures.

Q. Mr. President, don't you sort of suggest that it would be continued at the present level and that you base it on the present level?

THE PRESIDENT. Certainly. That's right.

Q. Is that correct, then, that you did base it on the present level and you expect

THE PRESIDENT. We based it on the experience of the last 6 months--continuing present level, of course. That has to be based on the experience that we have had now. We based the budget in January on the experience we had up to that time. The present national income has increased to an extent where we changed our figures in the estimate of a larger surplus than we thought we would have in January.

Q. This does not, then, represent a projection of an increased national income?

THE PRESIDENT. No, it does not. No, it does not.

Q. Does it mean that you don't contemplate any appreciable reduction in prices to bring this down?

THE PRESIDENT. I can't answer that. I have been anticipating about the leveling off of the price situation ever since the debacle of 1946 when the price control situation was all "balled up," but it hasn't come about. Your guess on that would be as good as mine.

Q. This estimate doesn't include anything like that?

THE PRESIDENT. No. Based on the present setup.

[7.] Q. Mr. President, you said that the surplus of this past fiscal year was due to the saving of a billion and a half by the executive departments ?

THE PRESIDENT. That is correct.

Q. As an actual fact, the receipts were larger than you originally estimated, some hundreds of millions, was it not?

THE PRESIDENT. A billion, a hundred million. The Secretary of the Treasury calls my attention to the fact that if we had not cut off the expenditures, even with the increased income, there would have been no appreciable surplus.

Q. Well, you can't say, though, that all of the surplus is due solely, then, to the Executive action?

THE PRESIDENT. Well, when you take into consideration--of course it was. There would have been--there would have been a deficit deficiency, the difference between $101 billion and whatever the surplus is. Couldn't have helped it. Hadn't made the cut, there wouldn't have been any surplus.

Q. Mr. President, I would like to look at the question against the background of Republican claims of savings--savings ranging anywhere from 2 billion to, I think, 7 billion or 9 billion. The thing you emphasize in your statement is the figure of the actual reduction in expenditures of $528 million. Then in the--in another--in this larger statement here you credit Congress with cuts amounting to a billion and a half, I think, approximately.

THE PRESIDENT. Yes, that's right--a billion, 540 I think it is.

[8.] Q. I was just wondering if there was some simple way, Mr. President, to account for the difference between the figure you mention, that half billion, and that

THE PRESIDENT. Yes, yes. It's easy. Just as easy as it can be. Take things like atomic energy, where the appropriation was made on only a part-year basis, and there are several other reasons exactly like it, and this tax refund situation where they cut off funds for tax refund. If a man has a refund coming, he is entitled to know just the same as if he had money in the bank. That appropriation will have to be made. That's how the difference comes.

Director Webb: Greek relief.

[9.] Q. Mr. President, table 1 (p. 397),¹ you say--two items there--"reductions in authorizations which may be regarded as final." That figure is a billion, 843 million. Then you have "reductions in authorizations which will require offsets by deficiency appropriations." That is 929. The total of those figures is 2 billion, 770. Now, isn't the atomic energy appropriation and the tax refund included in that 929?

THE PRESIDENT. No. Go up in the table to get your 645 million and your 403 million, then you will know where you are going.

¹ Page references in parentheses, throughout this news conference, indicate where the subjects referred to may be found in the Statement on the Review of the Budget as published herein (Item 181).

[10.] Q. Then the Executive has increased the $375 million figure submitted in January?

THE PRESIDENT. Yes. Yes, the Greek-Turkish loan, and several other things that had to be done. It's all set out in details in the folder which you have.

Q. I would like to get at the same question in a slightly different way. Could any of your experts reconcile the figures used in the final edition of the Congressional Record ? ²

THE PRESIDENT. Yes, they are all reconciled. In anticipation of that question, we have reconciled them for you right here.³

² Congressional Record for July 26, 1947 (vol. 93, Appendix).

³ The President was referring to a table which was not released.

Q. Taber, Taft, Barkley

THE PRESIDENT. Yes, they are all reconciled-Taber, Taft, Barkley--I have got them reconciled to show them exactly, that they come out almost to the letter--with a difference of a few million dollars of exactly what we have here. It's a long, complicated table. We will furnish it to you.

Director Webb: I suggest they call the Budget and go over it, because it is a very complex thing.

THE PRESIDENT. If you will--the Budget Director says if you will get in touch with him, he will explain it in detail so you won't get it all mixed up.

Q. There isn't any easy way of explaining it?

THE PRESIDENT. No, there isn't. No, there isn't. You would have to ask the Budget, and you would have to understand the budget as the Budget Bureau does.

Director Webb: The extension which you may call is 201 at the Budget. Executive 3300, extension 201. They will be glad to furnish you all the details.

Q. Do you have any copies of it?

THE PRESIDENT. There will be copies of it available.

Director Webb: I am not sure, Mr. President, that we can distribute that statement, but we can answer the questions that should be legitimately answered.

THE PRESIDENT. I don't see why you can't distribute the statement. It sets out in detail exactly what the difference is. It makes a lot of difference. That budget is built on exactly the same basis as the budget in January. The figures are comparable.

[11.] Q. Mr. President, in the January budget you estimated that the surplus for the current fiscal year would be $202 million.

THE PRESIDENT. That's right.

Q. And now 4 billion and 7 for the surplus in this year. Could you justify that estimate for us, please sir?

THE PRESIDENT. Yes. You will find--it is justified for you right there--[indicating]-and shows the exact situation, what the result of it was.

Q. On what basis they reached the conclusion?

Q. Mr. President, on page 12 (p. 402), there's a reference to reduction--

THE PRESIDENT. Joe,¹ let me answer this other question first, will you?

¹Joseph A. Fox of the Washington Evening Star.

Q. I beg your pardon. I thought that had been answered. [Laughter]

THE PRESIDENT. The increase in the income is the principal reason for the increase in the surplus, and it has increased to such an extent that the Treasury revised their figures on income, and then there was a $538 million cut which makes the difference. Those figures are all available in these tables that you have. As soon as I can find it, I will read it to you. Joe, what was your question?

[12.] Q. It dealt with the second paragraph, page 12 (p. 402), with reference to making expenditures for airways, a reduction will delay improvement of many airports. I was just wondering if you would amplify that?

THE PRESIDENT. Expenditures on the-reduction of expenditures for the Commerce Department. Improvement of new airports was cut down--safety devices, flags for safe landings--and that is really dangerous. I will read you those figures in just a minute. That revenue question--if you will turn to table 3 (p. 410) on the back there, your question will be answered by that table. Now, Joe, I will give you your answer here as soon as I find the figures. I have got the figures on this airport thing right here. The Congress enacted only $65 million requested for Federal airport aid appropriations. As a result, the improvement of many existing airports and the construction of new ones will be delayed by a year or longer. Then the Congress provided less than a third of the funds requested for the establishment of air navigation facilities. As a result, the program for a modernized airway system will be delayed. The landing aid program to permit safe and expeditious operation in unfavorable weather will be particularly affected by that cut. That is in the Commerce Department.

[13.] Q. Mr. President, as I understand it, you propose to use all of this $4.7 billion surplus on debt reduction, is that right?

THE PRESIDENT. Yes.

Q. Can you give us some idea when you expect to find the money for

THE PRESIDENT. Of course, the whole net surplus will be used for debt retirement.

Q. Including the cash surplus?

Secretary Snyder: No, it does not include the cash surplus.

THE PRESIDENT. Yes, if you will turn back--the actual cash surplus.

Q. The question I was getting at, sir, is where in the budget can you give us some idea of this? Do you expect to be able to find money for the expenditures under the Marshall plan?

THE PRESIDENT. Well, if expenditures have to be made under the present plan, it will reduce the surplus by that much, and the debt reduction will be reduced by whatever that amounts to. It is the net surplus that we are talking about, of course.

Q. Mr. President, actually there is no debt reduction at the end of the fiscal year?

THE PRESIDENT. The Secretary of the Treasury will answer that question.

Secretary Snyder: We reduce the debt immediately out of our working cash. We keep a certain amount of cash for current operations, and as our monthly maturities or quarterly maturities come due, we pay those off and reduce the amount. Sometimes it's even beyond the surplus that we actually have. We are using all our cash to cut down costs of servicing the debt. It may be, of course, we have to raise that back up as our cash runs down. Is that clear?

Q. In that event, I am still puzzled on where you get the money all of a sudden?

Secretary Snyder: It comes out of revenues as they are paid in through tax collections. We collect daily, you know, on that, and we watch our Treasury balance and keep it at working level to meet current expenses, and the balance of it we use to pay off the monthly accruals of maturities.

Q. Do you plan to build up any reserve for these foreign commitments or possible foreign commitments ?

THE PRESIDENT. We have to find out whether we are going to have any or not.

Secretary Snyder: We cover it with our regular monthly financing, with bills and certificates and with our regular bond sales.

THE PRESIDENT. I want to go back to that Net Budget receipts that was referred to. If you will turn to page 18 (p. 406) you will see it set out very carefully. [Reading] "In my Budget Message, I requested that the war excise tax rates be continued throughout the fiscal year 1948. The Congress continued them without an expiration date. This added more than $1.1 billion to the estimate of receipts, thus raising it to $38.9 billion. Higher levels of national income account for the greater part of the further increase of $2.8 billion in the present estimate of Budget receipts over the January estimate." That answers your question that you asked me a while ago. I think you will find nearly every one of these set out, but I will be glad to tell you about it.

[14.] Q. I have one question on the budget, while we are on that subject. You say that it is going to be decreased throughout the year, yet I notice in the Budget vision, under the heading of Interest on the Public Debt, interest on the public debt goes up 100 million. I wonder if Secretary Snyder-- could you explain that to me, please?

THE PRESIDENT. Answer that.

Secretary Snyder: Yes, that is easily explained. On our savings bond program, the service charges are accumulating every day as those bonds grow older. There is an interest accrual that is built up so unless we materially reduce our total debt why there will be an interest charge increase from that--from that area also. As we go into longer maturities, switch from the longer to the short maturities, the interest rate is higher. As you know, the bill rate is pretty low, and the certificate a little higher, and the notes a little higher, and long-term bonds are around 2½ percent. Well now, if we move out of short-term obligations into the long-term obligations to stabilize the debt, the interest rate will naturally creep up, even though we may be reducing the actual dollars on the principal of the debt. So it takes a material reduction in the principal on the debt in order to hold down that service charge to keep it somewhere around the figure that we have here in the budget. Is that clear?

Q. Yes sir. Thank you.

Q. Mr. President, I also would like to ask the Secretary on that point, does he contemplate overall any really material increase in the cost of carrying the public debt?

Secretary Snyder: That is one of our definite aims, to try to prevent any material increase in the cost of servicing the debt.

Q. Will that be a tendency--I mean, if you take out that increment you mentioned on the savings bonds, the net and other categories, that will not be very great, will it?

Secretary Snyder: I beg your pardon? Q. Most of that 100 million will be accounted for by the savings bonds, will it not ?

Secretary Snyder: I think the greatest part of it, this particular year, would be, yes, because we haven't moved a great deal into the long-term area yet.

[15.] Q. Mr. President, on page 20 (p. 407) of the statement, on foreign commitments, you figure 4.3. The table on page 3--table 3 (p. 410) has it 3.6. Is that because the Army's special relief fund is included in your figure and not under the table figure?

THE PRESIDENT. Well, I will answer that in just a minute, as soon as I find the table. It isn't on that same page that you mentioned, in my book.

Q. It's next to the very last paragraph of the statement, Mr. President.

THE PRESIDENT. Oh.

Director Webb: What is the table you refer to?

Q. Table 3 (p. 410), under International Affairs and Finance.

Director Webb: Which figure?

Q. Total 3.617.

Director Webb: 3.617 as against 4.3?

Q. I don't see any figure there for the Army expenditures in occupied areas which came to around 600 million, I think.

THE PRESIDENT. The difference is that the figure in table 3 includes only general and special accounts. You have some additional expenditures which belong in corporate accounts.

Q. Well, we will make it 4.3 then

THE PRESIDENT. 4.3; 4.3 is the figure I got.

[16.] Q. Mr. President, if you go back to the question of taxes for a moment, do I understand this to be the administration's position, that you hold out no promise of tax reduction for the simple reason that you can't until you know where you stand later on, until you know what international commitments face the country?

THE PRESIDENT. That's right--that's right. Until we know whether this continued high income is going to be maintained.

Q. Doesn't this exclude it, at least for the fiscal year 1948, by saying you are over surplus for debt reduction?

THE PRESIDENT. I think I have made that perfectly plain in the veto message.¹

Q. 1949?

THE PRESIDENT. 1949. Can't come to a conclusion until we know more about it.

¹ Item 147.

[17.] Q. Isn't there a main divergence between those figures and those by the various Republican leaders on rescissions?

THE PRESIDENT. Rescissions that were already made; 400 million rescissions already made. Between rescissions already made. That money never would have been spent. That was the tail end of the rescissions that we made in the past, and appropriations that would automatically have expired or were eliminated.

Q. Executive rescissions?

THE PRESIDENT. Executive rescissions. They were the big ones. Fifty-five billion dollars worth.

Q. I mean in this--in figuring

THE PRESIDENT. The order that I issued December 30, terminating hostilities, terminated these appropriations on the 30th of June,

Q. Four billion rescissions, that's all that it mentions here.

THE PRESIDENT. These 4 billions in rescissions are the ones that I refer to. Automatically they were war expenditures that never would have been spent, most of them. The Budget Director says that the rescissions that were made by Congress--most of the rescissions made by Congress or recommended by us, they asked us not to recommend, because they would automatically expire. Yet they are counting those that would automatically expire in their savings.

Q. I think there were 4 billion some odd in rescissions--came after the end of the war--hostilities were ended?

THE PRESIDENT. Yes-oh yes.

Q. Were they Executive rescissions or congressional rescissions?

THE PRESIDENT. They were effected by the termination of hostilities which took place on the basis of the order which was issued in December.

Secretary Snyder: They would automatically expire June 30th by the cessation of hostilities. That was the limit placed on them, 6 months after hostilities ended, so they would automatically expire then, the authorization on them, for June 30th.

Q. How did they get in the 1948 Budget, in the first place ?

THE PRESIDENT. They weren't. They weren't. Actually I think the congressional figures have related to action taken in the session of Congress rather than specifically to the 1948 Budget. I think that is one thing that has caused confusion.

Q. There is a $4 billion figure that has been mentioned both in this message now and by some of the people on the Hill. In this message it says these rescissions were-amounted to money that wouldn't have been spent anyhow.

THE PRESIDENT. That is correct.

Director Webb: Go to page 14 (p. 403), second paragraph, you will see that of 4 billion, 100 million the President recommended rescissions of 565, and Congress took action on it. The rest of it would have automatically expired by operation of law. Therefore, the President made no recommendation about that. I might say that we were requested not to send those up by the Appropriations Committee, since it would automatically expire.

Q. Then these congressional figures which count in these $4 billion worth of rescissions--

THE PRESIDENT. Just off $4 billion.

Q.--are misleading?

THE PRESIDENT. I say they are just off $4 billion. You can figure it any way you want to, they are off $4 billion.

[18.] Q. Mr. President, do you have any minimum goal on debt reduction, including the Marshall plan?

THE PRESIDENT. I Can't have a minimum goal of debt reduction until I know what the surplus is going to be. Whatever the surplus is, the debt reduction is going to be.

[19.] Q. Mr. President, getting back once again to the possibility of tax reduction, on page 2 (p. 396), second paragraph--page 2 of the statement--you describe the policy for this year by saying, the surplus "will be devoted to the retirement of the public debt." In the very next sentence you say, "The same prudent policy of planning for a surplus and for debt retirement will be followed in preparing the Budget for 1949."

THE PRESIDENT. That's right.

Q. Wouldn't that more or less give us reason to think that debt--tax reduction next year too will get a pretty rough going over?

THE PRESIDENT. Well, I can assure you on that all right. It will get a rough going over. [Laughter]

Q. The question in my mind--the question in my mind is how far to go on that point, because just to read it you would almost think that you had committed yourself to no tax reduction.

THE PRESIDENT. Well, I can't say that, because as I told you before, the 1949 Budget is not made yet, and we don't know what commitments we will be saddled with. Certainly I don't want to run into deficit financing again if we can help it. If the income situation in this country continues, now is the time to pay our debts while we have got the money.

Q. What would you call minimum debt reduction ?

THE PRESIDENT. I can't answer that, either. We will have to see how this interpretation of the Secretary of the Treasury works out.

Q. I just--I wondered if it would be $4 billion, six? It would be necessarily over that, would it not, sir?

THE PRESIDENT. I can't answer that question.

Q. In that connection, Mr. President, I have a question which probably should be addressed to the Secretary of the Treasury. I think the record will show that in the last 2 years the Treasury has consistently underestimated tax receipts by a considerable percentage. Now I would like to propound this question. At the current level of business, assuming it continues, shouldn't tax receipts be more than the estimate in this budget? In other words, aren't they still running more than in the previous fiscal year ?

Secretary Snyder: There was no possible way--we don't intend to be--as you know, we have never had any pretense in the Treasury of being occult. In trying to estimate the receipts, we have to take certain measurements, and when they finally turned out, why there was a very small percentage of difference in the actual receipts than those estimated in January. But there was a lot of things happened in our economy that there was no way for us to know about, about the increase in prices and the increased profits that came about, which in turn increased the revenues. We have measured as carefully as we can by all standards, and certainly the revenues from my point of view should always be on the conservative side rather than on the extravagant side, because if we are on the extravagant side and depend on revenues being a certain amount and they fall down on us, we are in a difficult position. If we are conservative, we have always got some way that we can use the excess. So it may well be that our estimates for the balance of this fiscal year are conservative. On the other hand, it could be, with the changing economic conditions, that they are pretty close to right or maybe a little bit optimistic, but we try to arrive at a figure that we feel comfortable in reporting to the President to measure against his expenditure budget.

Q. In that connection, Mr. President, had you had any reports--have you heard any rumors that a number of large taxpayers filed their returns last March in anticipation of the 20-percent tax reduction?

Secretary Snyder: I haven't had any real information on it, but I think you will take some comfort in the Treasury estimates when you compare them with some of them that were made before the committees up in Congress by the outside experts. I think that ours came near the end result by several million--several billions of dollars than some of the expert testimony from the outside.

[20.] Q. Is it possible, Mr. President, in that connection, to have a figure as to the anticipated average national income throughout the year on which your revenue estimate was predicated?

THE PRESIDENT. We haven't got it, no. I might be able to find it for you.

Director Webb: Close to the present level.

Secretary Snyder: Somewhat near the present level.

THE PRESIDENT. The Secretary of the Treasury tells me that it is a figure somewhere near to the present level.

Q. What would that be ?

Director Webb: We will obtain that from the Treasury and it will be available at this extension.

Q. What is that extension again? Director Webb: 320--201.

[21.] Q. Mr. President, could I ask you this question? Do you believe that high taxes are inflationary or deflationary? [Laughter]

THE PRESIDENT. Well now, you will have to talk to the experts on that. In my opinion, of course, with conditions and prices and everything as they are, the more money in the pockets of the people to spend the more inflationary it is, and the Government should take its cut for the debt while things are prosperous. Don't know whether that answers your question or not, but that is the way I feel about it.

Q. Do you feel that the high taxes figure is an inflationary figure?

THE PRESIDENT. No, I do not.

[22.] Q. Mr. President, with the foreign commitments not going before Congress until--at least until next January, and with Congress going through its usual system of 2 or 3 months to get something out, there couldn't be a very great nick out of the 4.7 surplus in the next fiscal year?

THE PRESIDENT. Your guess is as good as mine as to what Congress will do and how they will handle it.

Q. Never very fast.

THE PRESIDENT. Well, I say your guess is as good as mine.

[23.] Q. Do you believe that Government spending on projects at this time contributes to the inflation of prices ?

THE PRESIDENT. If you will notice, the Government's public works program is way down. That is the answer to your question.

Reporter: Thank you, Mr. President!

THE PRESIDENT. Thank you very much.