The President's News Conference on the Budget

THE PRESIDENT. This is the first time you have had a chance to sit down. [Laughter]

[1.] You never saw a bigger one than that, I bet. [Indicating the Budget book] I have got a file of them all, since 1934, and they are right interesting.

This Budget is--well, unique in one way. It is a Message on the State of the Union and the Budget, and it has in it anticipated authorizations which have been recommended by me in various messages, as well as the actual budget figures which are required to run the Government in its various phases. It also for the first time shows that it will not be necessary to borrow any money this year to operate, because the cash balance as it now stands is large enough to absorb the excess-estimated excess over expenditures.

[2.] The other highlight in the thing, I think, is the statement that the tax structure should remain as it is, if we expect to arrive at a point where we can actually balance the Budget in the next year after this one.

If I had wanted to make a showing, I could have left out the anticipated expenditures for the legislation which has been recommended, and it would show a balance this year; but I think the fair thing to do is to place before the Congress and the people the exact situation as nearly as we can estimate it, and that it should cover everything that is anticipated. That is the attempt that has been made in this document.

It is very clearly stated in the first--on the first page; that is, page V (p. 37),¹ and the top of page VI (p. 37). I don't need to read that to you, for you can read as well as I can.

1 Page references in parentheses, throughout this news conference, indicate where the subjects referred to may be found in the message on the budget as printed herein (Item 18); all other references correspond to the page numbers in the Budget as published in House Document 411 (79th Cong., 2d sess.).

And then the budget proper, on page XLVII (p. 66) Summary of Budget, as stated at the bottom of page XLVII (p. 66), effectively sets out the program as it is. Then you will find on page LIII (p. 71) the Federal Revenue, Borrowing, and the Public Debt, and the Financial Requirements, and it also sets out the Tax Policy. The "meat" on that is on page LIV (p. 72).

In the second paragraph [reading]: "In view of the still extraordinarily large expenditures in the coming year and the continuing inflationary pressures, I am making no recommendation for a tax reduction at this time."

Then, at the bottom of the page, the last paragraph there [reading]: "Because of the success of the Victory loan, I am happy to report that the Treasury will not need to borrow any new money from the public during the remainder of the present fiscal year except through regular sales of savings bonds and savings notes. Furthermore, a part of the large cash balance now in the Treasury may be used for debt reduction so that the public debt which now amounts to about 278 billion dollars will decrease by several billion dollars during the next 18 months. The present statutory debt limit of 300 billion dollars will provide an ample margin for all of the public-debt transactions through the fiscal year 1947. The net effect of the excess of expenditures and debt redemption on the Treasury cash balance, as compared with selected previous years, is shown in the following table."

Then it shows what is anticipated at the end of 1947. It is anticipated that the budget will be reduced by about $7,100 million, and that the cash balance will be reduced from 26 billion to 3 billion, 200 million dollars.

And I think that covers the fundamental budget as nearly as I can cover it.

And if you want to ask questions, I will do my best to answer them.

[3.] Q. In 1946 you are going to reduce the cash balance by $12 billion; is that correct?

THE PRESIDENT. Look at that table there. Mr. Smith: Yes, that is correct.

Q. Twelve billion?

THE PRESIDENT. That is on page--

Q. Sometime in June you will reduce--

THE PRESIDENT. Begin to be reduced at that time. Page LV (p. 72) covers it. It sets it out in detail just exactly what is anticipated. If you will notice there, the June and--January-June 1946, it is expected to reduce the budget by 3 billion. That will reduce the cash balance to $11,900 million, or practically a little more than half.

Q. Well, Mr. President, is 3.2 billion the level of the cash balance which is contemplated, after this period of readjustment?

THE PRESIDENT. Yes.

Q. It is?

THE PRESIDENT. Yes.

[4.] Q. Mr. President, on page LXXIII (p. 86), you allow for an aggregate of 5.368 total outlay for international finance this year, and through 1947. Well, could you tell us exactly how much of that will go into the proposed British credit?

THE PRESIDENT. No, I Can't.

Q. You can't?

THE PRESIDENT. I don't know what they are going to ask for. We have to wait and see what they are going to ask for. Their credit extends over a period of years. They can draw on it on the basis of what they themselves think they need.

Q. I thought possibly, though, that you had a preliminary figure in mind there. In other words, you said that they will draw rather heavily on it the first 2 years.

THE PRESIDENT. That is correct. That is correct.

Q. I thought possibly you had something in mind about that figure?

THE PRESIDENT. Well, of course, in order to make up the budget, we did make an estimate of that, but it is only a preliminary estimate. We have no way of knowing exactly what that figure will be.

Q. I see.

Mr. Appleby: If I may, Mr. President, I might suggest that the figure in here is a complicated one, covering several different kinds of transactions, and the figure here is ample to cover all of those transactions, including the maximum of what is reasonably possible that the British will draw down; but in each case there are uncertainties. That is sort of balanced over in the total. We don't know, for example, how much the Export-Import Bank will lend. We don't know just how much the British will take down. But this estimate, as a whole, will cover all of those transactions.

Q. Is there any hypothetical estimate for what you might anticipate the British to take down on their loan in the fiscal year?

Mr. Appleby: Not to give out.

Q. Each item in it is indefinite and uncertain?

Mr. Smith: They represent highly intelligent guesswork, but they are not accurate.

Q. Is that based on any informal understanding?

Mr. Appleby: No. Based on a great deal of information, but no understanding.

[5.] Q. Mr. President, over on page (p. 72), on the public debt, speaking of the public debt falling off there in the last paragraph--well, hasn't it already started that decline? I mean, it is already past its peak, is it not, about $278 billion--

THE PRESIDENT. That is what we hope. That is what we hope.

Q. It can't possibly go up there any farther, can it, now?

THE PRESIDENT. Not now, no. The thing that will tell whether it will have to be expanded or not, is whether we get this reconversion and production program over, so that the national income will stay at the level which is necessary to meet this anticipated revenue.

Q. It is not likely that it could go--could hit a new peak now?

THE PRESIDENT. I don't think so. That is the basis for that statement here.

Q. What is the estimated national income level?

THE PRESIDENT. Between 135 and 140 billions of dollars.

Q. Mr. President, can we talk a little louder? We can't hear back here.

THE PRESIDENT. Sure, I'll try.

Q. This public debt is based on estimated national income, from 135 to 140 billion?

Mr. Smith: Revenue estimates are based on $140 billion--

THE PRESIDENT. --140.

16.] Mr. Smith:--But that is income payments, and that is a different figure than your--your gross national product. Bear that in mind.

Q. Got an estimate for the national gross product?

Mr. Smith: What does that go, Paul, there?

Mr. Appleby: We haven't projected that in these tables, and I think we would have to inquire precisely. Somewhere--140

Q. Higher than 140? Mr. Appleby: Yes.

Mr. Smith: Around 170 or 178--somewhere in there. But these are technical problems that involve factors used in estimating income.

[7.] Q. Mr. President, you said this includes all anticipated authorizations. I couldn't find anything in here on increased Government salaries. Are they included?

THE PRESIDENT. Yes, they are included.

Q. Congress--

THE PRESIDENT. They are included.

Q.--and the Judiciary?

THE PRESIDENT. Yes, they are included.

They are in that billion, five. You will find a billion, 500 million dollars that covers contingencies.

Q. Is there any breakdown of that billion, five?

THE PRESIDENT. No. They are all estimates. They are all estimates.

[8.] Q. Mr. President, at the end there is a Budget Resume which contains your figure for total budget expenditures of 35.8--

THE PRESIDENT. What is that page?

Q. It's page LXXVIII. Green book.

THE PRESIDENT. LXXVIII.

Q. And then there's the Budget Summary of Receipts and Expenditures which says total expenditures will be 35 billion, one. Now what comes in between that figure and the 35 billion, eight?

THE PRESIDENT. Say that again. I was looking for the place and didn't hear the question.

Q. In this Budget Resume, expenditures are figured at 35.8, and in the Budget Summary, table 1, there is a figure of 35.1. That is a difference of approximately $700 million. How is that explained?

Mr. Appleby: That is corporation money. The tables are complex, and the 35.8 includes every expenditure--corporations, as well as the other things. In the other table, the corporations are treated separately.

Q. Yes, but that shows $800 million for corporations, doesn't it?

Mr. Appleby: 750, I think.

Q. Table 1.

THE PRESIDENT. 735.

Q. Can you tell us what those millions are; that is, down to 35.15, up above, that will give you 35 billion, nine?

Mr. Appleby: What is the page beside LXXVIII?

Q. Next page, A2.

Q. What I am trying to do is make this Budget Summary, table 1, jibe with this Budget Resume, and I don't see how it's done.

Mr. Appleby: Well, I can do that if you will take the 35.124 and go down below in the Checking Accounts of Government Corporations. You add the 802 and you subtract the 67 million. The 67 million is Redemption of Obligations in the market, government corporations, and that is a gain on the part of the corporations. It is not an expenditure, but a gain on the part of the Treasury.

Q. I see. And then, also, there is a slight difference in the figure on Receipts, as I recall it. No--they are the same, I guess.

Mr. Smith: Mr. President, I would like to suggest, with respect to any of these issues worrying you--I don't blame you because they frequently worried me ahead of your worries--that if you will call the Bureau of the Budget about it, we would show you how they are reconciled; and I will be surprised if you find any flaws in these tables.

[9.] THE PRESIDENT. That phone number is Executive 3000, J. Weldon Jones, extension 118. He will be on the job right straight along, or somebody else will, to answer any questions.

Q. What is that extension again?

THE PRESIDENT. 118.

[10.] Q. Mr. President, I don't know whether this is a technical question, but on page A22, it shows that the FBI appropriation recommended for 1947 is $28 million, whereas actual appropriations for 1946 only $8 million of it is contemplated for the FBI.

Mr. Appleby: The rest of the FBI appropriation in 1946 was in National Defense, which is covered earlier in this tabulation.

Q. Well, later in the Budget, it says this represents only 70 percent of what it was in the past. Does that mean that the FBI has spent over $100 million during the war?

THE PRESIDENT. Yes. Mr. Appleby: Yes.

THE PRESIDENT. More than that.

Q. A hundred million dollars a year.

[11.] Q. Mr. President, is there any attempt to reconcile the idea of a balanced budget in 1947, and a cash balance down to about 3 billion, with a full employment budget?

THE PRESIDENT. Yes. Yes. The full employment is taken into consideration in the estimated budget.

Mr. Appleby: Spread over a number of years.

THE PRESIDENT. Spread over a number of years. It is spread over a number of years. We don't anticipate any serious inroad on that expenditure in this year, if the reconversion program goes through.

Q. Mr. President, would you consider this a balanced budget?

THE PRESIDENT. No. Well no, I do not.

Q. How are you going to explain the reduction of the debt with an unbalanced budget? That is what disturbs me.

THE PRESIDENT. The actual budget is in balance. It is the anticipated expenditures that throws it out.

Q. Well then, is the total of anticipated expenditures the 3 billion figure?

Mr. Appleby: Somewhere in that neighborhood.

THE PRESIDENT. If you study the tables carefully, if you will read that preliminary message carefully, it is set out very plainly and carefully. I have been studying it for a month, and it is very plainly set our in every detail; and if it is not set out plain enough for you, why if you will call this number I have given you, you will get all the information you want.

Q. That is one point that I think a great many people are going to be interested in, about this balanced budget. I am wondering if you might boil it down to a few words of one syllable that the public can understand?

THE PRESIDENT. Well, that's your job. I have boiled it down as much as possible. I have it right here in this document. [Laughter]

[12.] Q. Mr. President, the appropriations for Farm Security were sharply cut during the war, and I notice you haven't made much of an increase. Does that mean you aren't planning to expand the appropriation for Farm Security in the postwar period ?

Mr. Appleby: I would say that this is not yet the postwar period in respect to a program such as that. All across the board there has been an effort to hold down expenditures based on the high prosperity of the Nation and the high level of employment. It would be poor budget policy to go all out, or to return to a 1939 or 1940 basis all across the board, when so many of the factors have been changed. I would say this is a tight budget, but reflecting the general structure of the economy.

[13.] Q. Mr. President, you list Expenditures, National Defense, as $16 billion in the Budget Summary. Is it correct to assume that there might be a reduction in that sum, in anticipation of the demobilization program?

THE PRESIDENT. I don't anticipate any shrinkage in that fund. It depends altogether on the demobilization situation, of course, but I think that is as nearly a figure as we can arrive at, under the present conditions.

Q. Mr. President, this 35 billion annual Expenditures, that is the general basis we can look forward to for several years to come?

THE PRESIDENT. No, sir. I hope it will be 25 billion. That contains, as you understand, war expenditures--the winding up of the war.

Q. When, Mr. President?

THE PRESIDENT. I can't set the date. Your guess is as good as mine. I hope as soon as it possibly can be done. I am not making any prophecies.

Q. Do you anticipate it going any lower than 25?

THE PRESIDENT. No, I do not.

[14.] Q. Do you see a balanced budget in the following fiscal year?

THE PRESIDENT. I hope for it. I can't anticipate that, either.

Mr. Smith: I think, Mr. President, I detect a little misunderstanding in some of these questions involving a balanced budget, which is a problem. It may be that the point needs emphasizing here, that this is a sharp distinction from what has been done in previous years, in this respect: namely, that heretofore we have never presented to the Congress any proposed appropriation that was not authorized in some way already by the law.

In this--on the other hand, we have contended for some time that it was the intention of the Budget and Accounting Act to do precisely what is done in this budget: namely, to estimate as best we could the amounts of money that would be required to cover those items which the President had requested of the Congress, in terms of legislation and whatnot, whether or not the Congress had already acted upon them.

Now, that is a sharp distinction here, and in any discussion of balance, it is true the budget might have been balanced on the old basis, but I think it is the President's contention that that basis doesn't represent a real picture of the situation.

Q. Mr. Smith, in that connection, what part of the 35 billion figure is represented in that category of future anticipated things as yet unauthorized?

Mr. Smith: One billion and a half, is it, Paul?

Mr. Appleby: No.

Mr. Smith: A little more than that. Mr. Appleby: Anticipated appropriations and expenditures are in all of the principal categories--are in three of the four principal categories, some in Defense, that have not yet been authorized or formulated. Those are not large. And then, in the international finance, some of those items have not yet been authorized, the British loan, as an example. And then there is the billion, five of this strictly domestic--the general Government peacetime activities of the Government--a billion, five. Now, the three items altogether will amount to the total the President gave you some little time ago, roughly three billion, three and a half.

Q. Isn't that in some respects, Mr. President, an arbitrary figure, since I notice, for instance,.

THE PRESIDENT. It is an estimate--it is an estimate.

[15.] Q.--that the State Department has no estimate in the total for its new foreign intelligence service, which is said to run around $49 million. If all those things were piled on, couldn't you run it on to several billions?

THE PRESIDENT. No. They are all taken into consideration--every one of those things is taken into consideration. They are every one of them in the budget. There is not a thing left out.

[16.] Q. Mr. President, can we have an understanding on how much of this can be used, and how we can use it?

THE PRESIDENT. Well, you can use any of the facts that are set out here.

Q. I mean what you are saying, what Mr. Smith and Mr. Appleby are saying, in our stories Monday?

THE PRESIDENT. I don't see any reason why you can't use any of it.

Q. Attribute it to them and to you?

THE PRESIDENT. I would rather not have it attributed directly.

Mr. Smith: No.

Q. To the White House?

THE PRESIDENT. To the White House? If you like, but we are trying to give you a clear-cut--

Q. I just want it understood, so that there wouldn't be any misunderstanding.

THE PRESIDENT. I would not like to be quoted directly on it, because the Budget Message speaks for itself, but anything that will clarify and explain it, so far as you and I and the public are concerned, that is what we are already trying to do, and you are at liberty to use; but I would rather not have it quoted or directly attributed.

Q. Can these remarks about the balanced budget be attributed to you?

THE PRESIDENT. No, I would rather not, because they are estimates--an anticipating hope, so far. The figures themselves, I think, are the best statement of the case.

[17.] Q. Mr. President, in view of what Mr. Appleby said, would it be correct to say that the approximately 3.3 billion of the 4.3 billion in 1947 would be attributable to part of your program as yet not enacted by Congress?

THE PRESIDENT. I think that is a safe statement.

Q. I have a question for Mr. Smith. Mr. Smith, would you clarify why--if you believe it was the intention of the Budget and Accounting Act to have had these things included in the previous years--why it was not done?

Mr. Smith: Well, I think it was a very justifiable two sides of that story. I mean there were very strong contentions that we should not have sent down, on a requested estimate on the Hill, for anything that was not authorized. The Budget and Accounting language can be interpreted very narrowly indeed. However, it has been argued that the real--when you go back to the debate, as we have, on the Budget and Accounting Act, that it is the intention to submit a complete program.

Now, in doing it the way we have done before, we could be much more precise about it, you see. In doing it this way, we have to take some record cases, intelligent estimates we hope, as to what some of these programs might cost. But if you are looking at the total financial picture in the future, if the budget were--here is the practical problem: if the budget were submitted on the old basis, obviously there might be an excess of revenue. Yet the President has requested the Congress for certain programs which have not been authorized. The Ways and Means Committee might very well look at that and say, "We will cut the revenue." The revenue being cut, the programs subsequently authorized, you are faced with a deficit immediately. This is the only way, in my judgment, in these current situations; and I know that the President's argument was to you on that point, that this kind of program could be submitted. It is a very important distinction over previous practice.

Q. You do not say that the budget in any sense can be compared with the budget anticipated in the full employment bill?

Mr. Appleby: Designed to produce--

THE PRESIDENT. NO, it isn't the same type.

Q. Mr. President, did you yourself initiate this change in the form?

THE PRESIDENT, Yes, I did. I think it is the proper and honest way to lay the matter before the Congress. It gives them a chance to see what is anticipated, and gives the people a chance to see what we further seek and what we will ask for. Then, if they don't want to do it, why we are that much ahead.

Q. This estimate of the cost of the recommended program is in line with the thinking on the full employment bill, however, isn't it?

Mr. Appleby: That's right. Yes, it is.

THE PRESIDENT. Mr. Snyder makes the suggestion that it is not so fully set out in this budget as the estimate under the full employment bill would be set out.

Mr. Snyder: A forecast of it could--would be more fully developed under the full employment bill, and a plan for doing this, that, and the other would be exploited in there and laid out before you as proposed, which would be much beyond the scope of this proposed subject on producing a full employment budget soon.

THE PRESIDENT. If we are--if authorized to make one, we will.

[18.] Q. Mr. President, is this revenue estimate of 140 billion that Mr. Smith and Mr. Appleby referred to, is that predicated on any assumption of employment figures for fiscal year national employment?

THE PRESIDENT. It is anticipated on a prosperous full employment.

Q. Well, that is pretty general. For purposes of calculating that figure, was there any percentage wise or numerical assumption on employment?

THE PRESIDENT. How did you arrive at that?

Mr. Appleby: I think that is one of the questions you will have to call Weldon Jones on. There were certain assumptions, certain category assumptions at this level, so that did not involve a precise employment figure at this level.

Q. The 140 billion is probably predicated on nailing down one assumption.

Q. Can you say how much unemployment is expected under the 140 figure?

Mr. Appleby: No, I can't answer that.

Mr. Smith: I think that question ought to be cleared up, maybe in this way: that the one point is used as a basis for estimating the revenue which the Treasury is responsible for. We get in on some questions of the total amount, and that is not just one assumption, it is a very complex estimating job that I wouldn't even attempt to describe, because I am not competent to describe it to you. You want to guard against just pulling out one factor in that picture and saying, here is what this is based on. I think you will get a very complicated statement without solution when you ask that question.

Q. Mr. Smith, how much of a reduction of that 140 billion will be recommended at the present level of income payments?

Mr. Smith: Well, this is a rate. We are talking about a rate for next year--

Q. Yes.

Mr. Smith:--of 140, and I don't know the current rate. You had better ask that question of the technical people.

Q. Isn't this rather damaging to the forecasting aspects of your full employment bill, that the estimates on employment made 6 months ago were rather excessive?

THE PRESIDENT. I don't understand that complicated question. State it again.

Q. In here you say that there is much less unemployment than is anticipated.

THE PRESIDENT. For which we are very happy.

Q. Yes, and assuming that any Federal program has been established 6 months ago on the basis of those official estimates, wouldn't that perhaps be unsound at this time?

Mr. Snyder: Not necessarily.

THE PRESIDENT. I don't think that would be unsound at all. They would certainly be on the other side from unsound.

Mr. Snyder: It isn't going to be an annual procedure, our going from sudden full war to sudden full peace. I feel we have had just a turnaround there that involved elements that we couldn't possibly foresee. The rapidity with which the transition from war to peace took place, threw all those estimates out, but no one anticipated that the turnaround would be quite so rapid.

As it is today, we have got practically 95 percent of the physical reconversion completed. Well, that is pretty fast, don't you see, and it has taken up that unemployment slack much more rapidly than was expected, when we view this turnaround in light of the development of the war production that spread over a number of years, to switch it from peace to war. And we have turned around and done the job in a comparatively few months, back from war to peace again.

Q. Mr. President, isn't it also true that even under full employment, if you estimate 8 million unemployment, and send down an appropriation to Congress, and then the 8 million unemployment did not develop, you would not spend this money?

THE PRESIDENT. That is correct, and if your estimate was too low you would be in awful shape.

I want to emphasize again that these questions are for clarification and for your information, that the Budget Message itself and the two Messages cover the ground completely. What we are trying to do is make a clarification, and I don't want--I want to emphasize again, as I said to Mr. Brandt, that I don't want these things--these questions and answers attributed to me as President. I am trying to help you this, because the Messages themselves for themselves in terms that I am to speak to the Congress.

[19.] Q. Mr. President, in this revenue, did you calculate on increase in wages during the coming--

THE PRESIDENT. No.

Q. How would you define "substantial"?

THE PRESIDENT. I defined "substantial"as the proposed settlement of the United Steel Corporation.

Q. Is the $140 billion an increase over estimate for 1946, I mean the current year?

Mr. Appleby: Was it?

Mr. Smith: No.

Mr. Appleby: No. It is a decrease.

THE PRESIDENT. Decrease.

Mr. Appleby: Because of war production

Q. The reason I ask that question, some time ago I saw the estimated revenue on the basis of 130 billions for the fiscal year 1946. Mr. Smith: Was that made public?

Q. That was before the Ways and Means Committee--Senate Finance Committee in that testimony on the tax reduction bill last fall.

Mr. Smith: Well, this is the estimate now of 140.

Mr. Appleby: Mr. President, I would like to suggest that the questions indicate too much assumption that this is a full employment budget, or that it has moved in that direction, that it is predicated on the calculations that would be part of that. I would like to say that I think the chief significance of this budget is that it presents to the Congress a total program to avoid the business of having single measures proposed from time to time without adding them all up and looking at them in terms of each other. This is really primarily a development in the normal historical budgetary process.

[20.] Q. Mr. Appleby, have you got anything for the MVA?

Mr. Appleby: Have you got any what?

Q. Anticipated MVA--Missouri Valley?

Mr. Appleby: Nothing in here on authorities. There is money in here on valley developments.

[21.] Q. Mr. President, is there any provision in here to meet the cost of facilities for Bretton Woods, and U.N.O., and so forth--I mean to erect buildings, and so forth?

THE PRESIDENT. I don't think so.

Q. Wouldn't that need a rise in fiscal year 1947?

THE PRESIDENT. I don't think so.

Q. How do they propose to meet that Problem of housing the representatives, and so forth, and providing office space?

Mr. Appleby: Mr. President, there is a general allowance in here for our share of contributions to United Nations Organizations, and it is almost certain that if they should construct buildings, that that expenditure would not enter in fiscal year 1947. If there were any additional allowances over and above the allowances that we have calculated, it would be the subject of making an obligation and entering into the contract. The expenditure would come later.

Q. You said "if"?

Mr. Appleby: If there should be. That is a question that has not yet been taken up even in international negotiations.

Q. Oh, I thought it was a foregone conclusion that they were going to have their own buildings?

Mr. Appleby: But you are referring to the budget of the United States.

Q. Yes. We would have to meet a part of that.

THE PRESIDENT. Yes, but I don't think it will come this year. I don't think it will come this year.

[22.] Q. What does this $1,750 million of international obligations cover then, if it doesn't cover the U.N.O., Bretton Woods, and the rest of that stuff?

Mr. Appleby: It covers a fund for international--Export-Import Bank, and the British loan.

Q. Mr. President, as a matter of practical experience, do you get substantial appropriations originating spontaneously in Congress upon what you ask, that might throw this budget out of kilter?

THE PRESIDENT. That is always a possibility. I have been on the Appropriations-I was on the Appropriations Committee of the Senate for 10 years, and I am familiar with how those things are handled.

Q. Does it amount to a substantial volume?

THE PRESIDENT. No, it doesn't.

[23.] Q. Mr. President, on page LIX (P. 75) there is a reference to war supplies, maintenance, and relief. It says that the tentative estimates make allowance for military research, limited procurement and development of weapons in the developmental state. Does that mean the atom bomb? Is that included in there, by any chance?

THE PRESIDENT. No, it is not.

Q. It is not?

THE PRESIDENT. It is not. We are hoping that the Congress will legislate on that, and then we will be able to let the "bear" loose.

Mr. Smith: Well, Mr. President, those are budget--it is a secret item in the war.

THE PRESIDENT. Yes, I know.

Mr. Smith: The total is in the budget.

Mr. Appleby: The total is in the budget, but then that improvement of weapons, and things of that sort, did not--we were not considering the atomic bomb when we were talking about those.

Q. But the bomb is in the budget?

THE PRESIDENT. Yes.

Mr. Appleby: Atomic energy is in the budget.

THE PRESIDENT. Let's quit talking about the "atomic bomb." Let's talk about the release of atomic energy, which we hope to use for peacetime purposes.

Q. The reason I asked about the bomb was because it refers here to "weapons."

THE PRESIDENT. Well, that does not refer to the bomb.

Q. Mr. President, while you are making changes, could you do away with these Roman numerals? [Laughter]

THE PRESIDENT. I will go along with you on that.

Mr. Appleby: That is already agreed to.

THE PRESIDENT. It has been agreed to for next year.

Q. Mr. President, will the Message go up as is, or will you take any later, last-minute developments and put them in the Message?

THE PRESIDENT. There will be nothing new in the Message. It has been signed and sent up for release, to be handed to the two bodies of the Congress on Monday, at 12 o'clock.

[24.] Q. Mr. Appleby, does this show the total for public works, all public works?

Mr. Appleby: Except--what table are you looking at?

Q. A4.

Mr. Appleby: There would be two basic calculations. One would be for nonmilitary, and one would be including military. I can give you the total amount on nonmilitary very precisely--expenditures--wait a minute, this is appropriations--

Mr. Smith: Paul, it is approximately a million point two on civil, and about 750 million on military, is it not? It runs--comes out to about--

Mr. Appleby: A billion, 7--

Mr. Smith: That's right.

Mr. Appleby:--altogether.

Q. A billion, one on military?

Mr. Appleby: Yes. And those are expenditure figures all on the military side, and the explanation for that is that it is for payment of things already constructed.

[25.] Q. Mr. President, getting back to MVA and the various appropriations for reclamation and flood control, and so forth, does that indicate you do not anticipate a Missouri Valley Authority in 1947?

THE PRESIDENT. It does not indicate that at all. I am going to do everything I can to get MVA in 1946.

Q. You are?

THE PRESIDENT. Yes.

Q. These appropriations could then be turned over to the MVA?

THE PRESIDENT. That's right. If we get one, which I hope we will.

[26.] Q. In connection with authorities, Mr. President, is there any specific fund anticipated for the St. Lawrence?

THE PRESIDENT. Is there?

Mr. Appleby: Yes.

THE PRESIDENT. Yes. I am sure it is included.

Mr. Appleby: That is in the prospective legislation, so it is not identified here as a specific amount.

Q. Do you know how much that is?

Mr. Appleby: No, I don't recall.

Q. Would Mr. Jones know how much that is?

THE PRESIDENT. Yes, I think he would. We don't know all those things. That, I am sure, was included in the anticipated expenditures.

Q. That is in the billion, 500 million dollar figure?

THE PRESIDENT. That figure is not for release, even if you found out what it is, because it is an estimate.

Q. You said a while ago that you hoped the appropriations would be cut to 25 billion dollars. Would you mind having that attributed to you?

THE PRESIDENT. I don't want that attributed yet. I will make the announcement later. It is in the Message. It is in the Message. And I don't think you need attribute it to me, because this Message is going to be attributed to me, I think. [Laughter]

There is one part of this budget that sets out the planning program for public works. I think if you read that carefully, it will answer a great many of your questions in regard to these anticipated public works programs.

[27.] Q. Mr. President, I notice that the anticipated expenditures for the White House operation proper are running a little larger than this year--even larger than wartime.

THE PRESIDENT. They have always been larger, much larger than they show, because the White House expenditures have been met by the Interior Department, and the War Department, and the Navy Department, and the

Q. The explanation said that the White House must now no longer be charged to other departments but to the White House itself.

THE PRESIDENT. That is exactly right. The White House budget will show exactly what is expended in the White House and always has been. It isn't a greater amount than in past years. In fact, it's a little less.

Q. No way of identifying?

THE PRESIDENT. Couldn't identify, because it is covered under all of the various departments.

[28.] Q. I notice percentage wise Mr. Smith has given the Budget Bureau a bigger appropriation. Does the Budget Bureau expect to expand even beyond wartime size in the new fiscal year, Mr. Smith?

Mr. Smith: You should ask that of the President. He approved it. [Laughter]

THE PRESIDENT. That's right. I approved it because it is necessary. It is a tremendous job. You have got to have the people to do the work, and get it done. That document that you are looking at there has been--I guess it has been 6 months of the hardest kind of work to get those figures together.

[29.] Q. Mr. President, do you anticipate Congress will cut down Government payrolls?

THE PRESIDENT. What was that?

Q. Does this budget anticipate any reduction in Government payrolls?

THE PRESIDENT. Yes, of course it does.

[30.] Q. In connection with the budget likewise in various interdepartmental budgets, Mr. President--over here in Commerce, I note that it jumps from 93 million to 163, and it says that for additional promotion of commerce and industry, and so forth. Could you fill us in a little more on that? I mean, how come it was up so sharply?

Mr. Appleby: Chiefly aviation. The increase is described as aids to business. Relatively it is a few million dollars, a big increase going to CAA.

Q. There is an anticipated very large increase in the Foreign and Domestic Commerce of about 13.

Mr. Appleby: Yes--

THE PRESIDENT. Yes.

Mr. Appleby:--but the total increase for the Department of Commerce is--the big figure is the CAA.

Q. On that point, Mr. President, I notice Internal Revenue jumps up 50 million dollars. Does that mean there is going to be an increase in the enforcement of the

Mr. Appleby: That again is a transfer, in effect, from Defense appropriations to normal appropriations. They don't have as big an appropriation in total.

Q. I see. They receive it from the President's budget?

Mr. Appleby: From the Defense budget.

THE PRESIDENT. From the Defense budget. A lot of those increases are not increases, because it is dropping of the Defense budget and putting it into the regular budget.

Q. Would some of this Weather Bureau increase be based--

Mr. Appleby: Aviation.

Q. CAA.

THE PRESIDENT. Aviation.

Mr. Appleby: Development of aviation on a peacetime basis could be said as one of the features of this kind, and for everything related to it. There will be substantial increases.

[31.] THE PRESIDENT. Referring back to that cutting of the cost of the Government, it is a downward trend--discharges of wartime employees which have been going on at a tremendous rate.

Q. Thank you very much, Mr. President.

THE PRESIDENT. That's all right. We want to make it as clear as we possibly can.

I say the phone will be at your service for any questions you want to ask.

Reporter: Thank you, Mr. President. That was very interesting.

THE PRESIDENT. It is interesting to me. That is one of my hobbies.