Nation: Promise with a Hedge

As Jack Kennedy’s New Frontier grows costlier, the traditional Republican argument that Democrats are reckless spenders is already beginning to be heard again. No one is more sensitive to the charge than the President himself, who slipped a surprising pledge into his recent speech on the Berlin crisis: he will submit a balanced budget for the fiscal year beginning next July. Kennedy smudged this pleasant pecuniary painting somewhat by conceding that it might take a tax increase to balance the books.

Last week Kennedy’s Treasury Secretary Douglas Dillon all but rubbed out the smudge in a “Dear Wilbur” letter to House Ways and Means Chairman Wilbur Mills of Arkansas. Even with Kennedy’s new $3.5 billion more for defense, no tax hike will be needed, said Dillon, because the economy will grow so fast that present rates and expanded spending will yield sufficient income to support a bigger budget. But Dillon left himself an out. All this will not come to pass, he indicated, if there is “a further worsening of the international situation” and defense expenditures require “substantial additions.”