Statement on Pension Increases

It has been necessary for me to delay approving the bill increasing the pensions of the Spanish War veterans and their dependents, not because of any lack of sympathy with the objects of the bill, but on account of the Government financing which it involved. I have recognized that those connected with the Spanish War have always held a position of equality, so far as Government bounty is concerned, compared with those connected with other wars. It cannot be denied that they are entitled to be placed on a higher rate of pensions than they are now receiving, if others are entitled to what the Government is doing for them.

According to the best estimates that can be secured, the results of the present financial year, which ends June 30, will show a moderate surplus. This can be used to meet moderate expenditures that are not continuing in their nature but require but one appropriation. For the next fiscal year present indications show a deficit of a little over $21,000,000. When the requirements of the Spanish War Pension bill of nearly $19,000,000 are added, that deficit becomes $40,000,000.

This bill calls for continuing appropriations, once it becomes law, and each budget must be made with a recommendation for sufficient funds to pay these additional pensions. If it were in the nature of a law for building and construction work, when the budgets are made up in the future, the state of the finances could be considered. If the money were not available such building and construction would be delayed until there are funds in the Treasury. Such laws are on a different basis than laws for pensions.

It has been necessary to consult the Treasury. I understand that means, in all probability, can be devised by savings in other directions to meet this moderate additional expenditure. It has also been necessary to confer with various members of the Senate and House as to further additional legislation calling for continuing expenditures. I did not wish the approval of this bill to be taken as an indication that other legislation of that nature could also be financed, or to have it considered as an encouragement to further laws calling for large continuing appropriations.

It is my understanding that instead of promoting such further legislation, it will be considered as making it less desirable and less probable. The authorizing of this additional expense will make it all the more necessary to resist the passage of bills which would increase by any considerable extent the necessity for permanent appropriations.

Members of the Congress advised me that there are already pending bills which are actively supported and energetically pressed that would increase our annual expenditures by about $360,000,000, which is about the amount of the tax reduction. This reduction was nearly $70,000,000 more than I considered advisable, but I recognize that it is peculiarly within the discretion of the Congress to deal with the subject of taxation and I therefore approved their judgment.

But, having made the reduction, I know that they have in mind resisting appropriations which will be more than can be met by the Treasury under the tax laws which they have passed. With these expectations, I am approving the increase in pensions of the Spanish War veterans.

Having made the wise decision of keeping down expenditures in order that taxes may be reduced, that policy must be continued by constant and reiterated efforts. The alternative is well known and perfectly apparent to everybody. If we now increase our annual expenditures by large amounts, the inevitable result will be a necessity for the Congress to impose additional taxes through the passage of a new tax bill. It is for that reason that it is necessary to maintain the principle of government economy.

CALVIN COOLIDGE

THE WHITE HOUSE, May 1, 1926.