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GOVERNMENT
Ike's Blueprint for '56 Debt reduction in lieu of t a x cut is a surprise as State of the Union message outlines strong p r o g r a m AICHOINC through the half-empty halls of Congress, were the droning voices of clerks reading the Presidents State of the Union message. With Eisenhower resting at Key West, most Congressmen preferred to read the President's message in the seclusion of their offices. Missing this year was t h e excitement generated when all the Congressmen squeeze into the House chamber to hear t h e President speak. Pointing out t h a t our economy is at an "unparalleled level of prosperity," the President proposes a forthright legislative program so that the nation "will be rewarded by a n even more plentiful harvest of human benefit than w e now enjoy." Many of the President's proposals will b e the target of heated Congressional debate. Here are some of the recommendations that will affect the chemical profession and the chemical industry. • Taxes. Bitter disappointment to those who thought the Administration would cut taxes, is the President's recommendation to trim the National debt and balance the budget before considering any c u t in taxes. Expressing concern for what he terms "fiscal integrity," Eisenhower says, "Under conditions of high peacetime prosperity w e can never justify going further into debt to give ourselves a tax cut at the
expense of our children." Not only does the President expect the budget to b e balanced at the end of this fiscal year, but he also says h e will propose a balanced budget for t h e coming fiscal year ending June 30, 1957. To help balance the budget, Eisenhower recommends that all excise and corporation income taxes, due t o drop on April 1, b e kept at their present level for another year. Congressional reactions to these Presidential recommendations are understandably mixed. Those Congressmen who have proposed tax cuts this year, say they will continue their efforts with no change in their tax reduction proposals. Other members applaud the continuing effort t o balance the budget. More conservative members look with favor on t h e proposal to reduce the National debt, n o w nearing its statutory limit. • Research. T h e President recommends a substantial increase in Federal funds to support a "well-balanced program of research, including basic research, ( t h a t ) c a n open new frontiers of knowledge, prevent and relieve suffering, and prolong life." Heavily emphasizing medical research, Eisenhower will present to Congress a new plan to aid construction of non-Federal medical research a n d teaching facilities, a n d to
Message Highlights • N o tax cuts until budget is balanced and national debt reduced. • Excise and corporation income taxes, d u e to drop April 1, should stay at present levels for another year. • Recommends substantial increases in Federal support of fundamental research. Will present plan for aid to non-Federal medical research. • Proposes t h a t United States become a member of the General Agreement for Tariff and Trade, a n d the Organization for Trade Cooperation. • Recommends an experimental program of flood-damage indemnities and an overhaul of disaster aid programs. • Urges speedup in Federal development of water resources and Federal participation in small projects under local government control. • Again calls for 40,000 mile interstate highway program. Warns that adequate financing must be provided. • Five-year program of Federal aid to states for school construction to be sent to Congress. • Proposes Federal technical aid and Federal loans for redevelopment of some domestic distressed industrial areas.
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help provide more adequate support for t h e training of medical research people. ^ Tariff and Trade. Plunging into t h e controversial area of foreign trade, t h e President again asks Congress to approve United States membership in two international trade organizations— t h e General Agreement for Tariff and T r a d e and the Organization for Trade Cooperation, the working a r m of GATT. Noting that United States membership in these organizations will b e evidence of our desire to cooperate in expanding trade among t h e free nations, Eisenhower reassures Congress b y saying that OTC "cannot alter the control by Congress of t h e tariff, import, and customs policies of the United States." Although these proposals were not acted on at the last session, a reciprocal trade bill was passed. Administration spokesmen say that passage of the bill has broken the resistance to international trade organizations. They predict that t h e President's proposals on both GATT and OTC will be approved a t this session. • Disaster Aid. Recalling t h e major disasters of recent years from flood and high winds, the President says t h a t state relief activities have been far from uniform, and "in many instances either inadequate or nonexistent." T o minimize the shock of these catastrophes of nature, h e recommends an "experimental program of flood-damage indemnities." Details of the program will b e announced at a later date. • Water Resources. In recommending action on Federal water projects, t h e President calls attention to the increasing role water plays in industrial processes, irrigation, and electric power. Our water resources cannot b e developed overnight, and the need is such that we must make faster progress without delay. To do this, Eisenhower strongly urges that action be taken on such wholly Federal projects as the Colorado River Storage Project and the Frying Pan-Arkansas Project. In addition, the President urges passage of legislation to provide for Federal participation in small projects under the control of local government. • Highway Program. Again the President recommends passage of laws to complete the vital 40,000 mile interstate highway system over a period of 10 years. Cost of the program would be approximately $25 billion. Calling attention to our mounting traffic problem, he says that the program must be authorized as one project so that industry can efficiently gear itself to the job ahead. However, the President warns that the pressing nature of the problem must not lead t o fiscal mismanagement. An adequate plan of financing must be provided. •
