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Albert Gates

Truman Reports on Labor, Budget
and Taxes Before 80th Congress

The Budget

(20 January 1947)

From Labor Action, Vol. 11 No. 3, 20 January 1947, p. 3.
Transcribed & marked up by Einde O’Callaghan for ETOL.

AGAINST the background of the opening session of the 80th Congress, President Truman gave his report on the State of the Union and then sent to Congress his economic report and budget message. These will form the basis for the struggle which will occupy the two legislative bodies, as the Republicans take over this branch of the government. All preliminaries for this battle have been ended; the GOP has taken over all congressional committees in the reorganized Congress. The two principal problems around which all others revolve is the labor question and the budget.

The Republicans, as the most direct representatives of monopoly capitalism, will certainly alter several important sections of the President’s reports and proposals. In the absence of any fundamental differences in foreign policy, they will concentrate all their attention on domestic questions.

With a new confidence growing out of their election sweep, the Republicans will certainly reject the compromise proposals of Truman on the most important sections of his reports. But as has already been pointed out by most reporters from Washington, the extreme reactionary anti-labor Congressmen of the GOP and the Democratic Party will not prevail, for reasons we will indicate herein.

In his report on the State of the Union, Truman presented a most optimistic picture of the economic situation which is characterized by the greatest total employment in the history of the nation, as well as record-breaking profits.

After recommending “broadening the coverage and increasing the payments of Social Security,” extending the wages and hours law and increasing the minimum wage, and adopting a “broad program of health insurance, public welfare, federal education aid,” the President went on to the most important topic of his report, the question of wages and prices.

The Budget Report

Unable to evade the real facts about the decline in living standards as a result of the continually rising standard of living, the President proposed to lower prices and increase wages, wherever possible, and at the discretion and responsibility of private enterprise. “Wherever possible” is vague enough. But the Republican bloc, already preparing anti-labor bills, will oppose any readjustments in wages on the theory that prices will decline on the basis of increased production. (Neither the President or the GOP made mention of the fact that despite record inventories piling up in the warehouses, prices have continually risen.)

The whole problem of wages and prices is related, however, to the legislative plans of the congressional majority on the budget and labor.

The presidential budget is symptomatic of the changes that have taken place in the world and America’s new role as the leading imperialist power in the world. Increasing militarization of the country as a whole is reflected in the enormous military expenditures called for in the new budget and the placement of military men in the key positions of the Administration and the State Department. Thus, the new budget of $37.5 billions calls for a direct expenditure of $11.3 billions for the Army and Navy. In contrast to this, the total social welfare budget calls for an expenditure of $1.7 billion, of which $88,000,000 is for education. That Truman’s request for a “broad program” of social welfare is not seriously meant can easily be seen from the emphasis of his budget message.

But the Republicans will not accept the budget report, principally because its acceptance would require no change in the present tax structure. Where shall the budget be reduced? Since the GOP is committed to maintaining the enormous military budget, it must be cut in all other respects: social welfare, international affairs, domestic outlays, pruning of the federal payroll (but not senators and representatives). If the Republicans succeed in reducing the budget by $4 billions (advocated by Taft) or $7.5 billions by those who want a drastic reduction of taxes on industry and high incomes, moneys allocated to the military will make up a third or more than a third of the entire budget!

Anti-Labor Laws

The President called for legislation outlawing certain union practices but not “the collective bargaining processes.” By certain union practices he referred to “jurisdictional strikes.” But for the time being this is a total evasion on Truman’s part of the real struggle that will take place in Congress. Jurisdictional disputes are an almost totally meaningless aspect of the labor situation. But with his eyes on the 1948 elections, the President, already seriously compromised with labor, hopes to regain this lost support by opposing the efforts of the GOP and his colleagues from the South. They will make it easier for him by the bills they have introduced so far.

The Case Bill, once vetoed by the President, has been reintroduced in more severe form. As is characteristic of so many bills, this one too provides for government by injunction and the curbing of strikes. Senator Ball is pressing for his open shop bill, which calls for an end of industry-wide contracts between corporations and the unions. These are only two outstanding examples of what will come before Congress.

The big whips of the GOP, however, will oppose these measures, not because they lack any sympathy with them, but also for political reasons. For the first time in sixteen years, the GOP has a fighting chance to win the presidential elections. They are fully aware that they cannot win by alienating the labor movement. As the party most closely allied with big business, however, it must answer the needs of its many sections.

But no matter which of the policies of either party wins out, neither will be able to forestall the inceasing class tensions which are characteristic of social instability. Since the GOP and the Democrats are committed to a maintenance of the present system, their differences are merely tactical. The fundamental causes for a collapse of the profit economy in this country will roll over both political parties of monopoly capitalism.

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