Masonry Magazine January 1974 Page. 13
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THE ENERGY CRISIS AND POLITICS will dominate Congress during 1974. Early on, the legislators will focus on fighting recession and unemployment, which threaten to result from the shortages of oil and other raw materials. Later, the Democrats will be trying to capitalize on the Watergate scandal. Many believe that a big sweep in next fall's Congressional elections could set the stage for a Democratic take-over of the Presidency two years later. The President will ask Congress to enact only a few new proposals in 1974. But some pieces of legislation that didn't pass last year will win approval.
The Congress can claim some fairly solid accomplishments in 1973. Laws were passed to allocate scarce fuel supplies, aid Northeast railroads, hike Social Security benefits (and taxes), revamp farm aid, subsidize mass transit, and start medical aid. But last year Congress was not as productive as it might have been. The lawmakers were emboldened by Watergate to oppose President Nixon. This year, Nixon may be more conciliatory.
THE ECONOMY WILL BE A CENTER of attention again in Congress this year. Democrats see its performance as a viable issue in opposing the Republicans. They will attack Nixon and the GOP for the unemployment rise that is coming. And they will blame the Republicans for raising the country's cost of living, especially by moves to increase gasoline costs that will hit the poor hard.
Congress and the President will agree on more spending in fiscal 1975, the accounting year that will start in six months. Even with few new legislative initiatives, the cost of government will rise. The question is: How much more in expenditures over the current fiscal year? This is where the collision with Congressional Democrats could be quite sharp.
NIXON HAS BUDGETED AN INCREASE in government spending on the order of $15 billion for fiscal 1974 -the new year that will begin next July 1. Here are how some components of his new Budget shape up: Expenditures for defense will move up again, to more than $80 billion. Key existing programs will be allowed to expand, as planned earlier unemployment compensation.. health education revenue-sharing welfare. Uncontrollable items, such as Social Security benefit payouts, interest on the debt, are also rising.
But the stimulative impact of these increases won't be felt for a year. Meanwhile, what to do about the hardship that's on the way from lay-offs? The answer seems to be local public service jobs, funded by Uncle Sam. The President now agrees with the Democrats on the basic principle involved. But they difjer over how much to spend. It could add up to billions.
masonry
January, 1974
MANY VETERAN BUDGET-WATCHERS feel actual outlays will top $290 billion. Presidents always estimate low, giving themselves the benefit of all doubt. A spending total of $295 billion is far more realistic, to many observers. Some even see the possibility of the first $300 billion figure in history.
Revenues will also go up in fiscal 1975, but they won't keep pace. They may rise to $285 billion. Thus, a deficit of some $10-$12 billion seems to be shaping up. Of course, much will depend on how severe the oil crisis impacts economic activity.
TAX MEASURES PROMISE TO BE a major activity for Congress this year. The next session is going to be one of the busiest on tax matters in years. A windfall-profits tax on the oil industry will be sought by the President. Many Democrats will want it, too, but a big battle is likely, nevertheless.
Higher gasoline taxes are also a possibility, but opposition is fierce. The aims of such a proposal would be to curb gas consumption, finance energy research, and help the Budget.
GENERAL TAX REFORM will get priority in the Ways and Means Committee. A growing number of Congressmen are becoming restive unhappy with delays. But the leadership has held them off with promises of quick action in 1974. The present outlook is for a multi-step revision of the entire tax structure, rather than a single rewrite that would wrap all changes in one big bill.
Tax simplification will be the first step in committee deliberations. One plan would eliminate deductions for separate items on most tax returns. Instead, taxpayers would be permitted to substitute an over-all deduction.
NEXT THE COMMITTEE WILL TAKE UP an overhaul of income-tax provisions. Various time-honored shelters will come under close Congressional scrutiny. Tax incentives for industry to add to productive capacity might be included. Revisions of the present capital-gains tax rules seem certain to be studied.
Finally, the committee will take up reform of gift and estate taxation. This is one of the most sensitive tax matters and, thus, will be given very careful review by the legislators.
PENSION REFORM IS A TOP-PRIORITY MEASURE awaiting enactment in 1974. The Senate has ap-
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