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The original documents are located in Box 8, folder "FY 1976 - 12/17/74, FEA, ERDA, Small Agencies" of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library. Copyright Notice The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections. Works prepared by U.S. Government employees as part of their official duties are in the public domain. The copyrights to materials written by other individuals or organizations are presumed to remain with them. If you think any of the information displayed in the PDF is subject to a valid copyright claim, please contact the Gerald R. Ford Presidential Library. Digitized from Box 8 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library MEETING WITH ROY ASH FEA, ERDA, AREAS OF NATURAL CONFIDENTIAL RESOURCES, ENERGY AND SCIENCE AND REMAINING FOREIGN ASSISTANCE COVER SHEET ISSUES Tuesday, December 17, 1974 2:00 P.M. FORD i LIBRARY GERALD 1976 Budget Session With The President 12/17/74 1976 Budget Session With The President 12/17/74 Attach this form to CONFIDENTIAL material in use. DETACH the form CONFIDENTIAL when material is filed, stored or dispatched. COVER SHEET OMB FORM 68 MAY 67 THE WHITE HOUSE WASHINGTON December 16, 1974 MEETING WITH ROY L. ASH Tuesday, December 17, 1974 2:00 p.m. (60 minutes) Oval Office From: ROM L. Ash I. PURPOSE To make final FY 76 budget decisions for the Federal Energy Administration, the Energy Research and Develop- ment Administration, several smaller agencies in the areas of natural resources, energy and science, and a few remaining foreign assistance issues. II. BACKGROUND, PARTICIPANTS, AND PRESS PLAN A. Background: The FY 76 budget submissions for FEA, ERDA, several smaller agencies in the areas of natural resources, energy and science and a few foreign assistance areas have been reviewed and the results have been reported to the affected agencies. This meeting is to consider the issues raised during the above reviews that require Presi- dential consideration and determinations. B. Participants: Roy L. Ash, Paul O'Neill, Frank Zarb, Dale McOmber, & Donald Ogilvie C. Press Plan: David Kennerly photo III. TALKING POINTS A. Frank Zarb, what is the first issue we should consider in the energy area? B. Frank Zarb, which of the smaller agencies in the areas of natural resources, energy and science should we consider first? C. Don Ogilvie, will you describe the foreign assistance issues we will be considering today? Foreign Aid 15 CONFIDENTIAL Foreign Assistance 1976 Budget Issue #6: Middle East Economic and Military Assistance Statement of Issue What amounts of military and economic assistance should be included in the Budget for Israel, Jordan, Egypt, and Syria? 1974 1975 1976 Budget Est. Alt.#1 Alt. #2 Alt.#3 LIBRARY FORD Agency Req. OMB Rec. ($ millions) & 07 Supporting assistance -- 250 250 300 250 50 Syria a a Supporting assistance -- ( 75) ( 75) 90 75 25 Jordan Grant MAP 40 100 30 100 30 30 FMS credit -- 30 30 30 10 10 Supporting assistance 46 78 78 78 35 15 a a Special Requirements Fund -- 100 100 25 25 25 Subtotal 86 558 488 623 425 155 Israel FMS credit 300 300 300 300 300 300 Supporting assistance 50 50 250 100 50 50 Emergency Sec. Ass't. 2200 -- -- -- -- -- Grand Total 2636 908 1038 1023 775 505 a / $75 million of Special Requirements Fund is planned for Syria. Background Significant changes in the diplomatic situation in the Middle East have resulted in basic certainties regarding the immediate objectives of our assistance in the 7. - Negotiations ave been stalled for several months. DECLASSIFIED E.O. 12356, Sec. 3.4 (b) White House Guide Lines, Feb. 24, 1983 CONFIDENTIAL By DAN NARS, Date 6/27/85 CONFIDENTIAL 16 - The Arab summit conference in Rabat designated the Palestine Liberation Organization, rather than Jordan, to negotiate with Israel for return of the West Bank. - The Arab oil producers at the Rabat conference pledged $2.3 billion annually in aid to Egypt, Jordan, and Syria in addition to the $5.3 billion pledged in the past year. FORD LIBRARY Other Rabat Cash Grants Loans Pledge Total ($ millions) 07V859 Egypt 1,320 1,650 868 1,000 4,838 Syria 640 340 224 1,000 2,204 Jordan 181 4 45 300 530 Total 2,141 1,994 1,137 2,300 7,572 These events affect the role and impact of U.S. assistance. Because the United States does not wish to signal any change from the current negotiating strategy at this time, however, the proposed assistance programs are designed to be neutral as regards signals of change. Israel. The major unknown affecting future military assistance require- ments is the U.S. response to Israel's request for $1.5 billion annually in grant aid for a ten year military enhancement program. Since the October 1973 war the U.S. has agreed to provide about $2.5 billion in arms and $2.5 billion in financing, $1.5 billion on a grant basis. An additional $300 million in military sales credits will be provided in 1975. Although there has been no economic requirement for the general balance of payments support provided to date, a continued high level of mobilization or withdrawal from the Sinai oil fields could change this. Jordan. The United States has provided aid to Jordan to keep Israel's longest border secure and to assure cooperation in negotiations. Military assistance helps to maintain army loyalty as the backbone of a moderate regime. Economic assistance has been justified as budget support despite the country's large foreign exchange holdings. Jordan's diminished role in the negotiations and the sharply increased Arab aid have diminished the need for high aid levels. Egypt and Syria. Economic aid to both countries is designed to indicate U.S. interest in broadening and balancing its relationships in the area, and to provide incentives to enter into those relationships. The massive assistance flows from the Arab oil producers have diminished the incentive effect, however, and reduced the diplomatic leverage of U.S. aid. Disbursed or committed assistance will meet both projected foreign exchange deficits and likely development and reconstruction activities for several years, CONFIRENTIAL 17 CONFIDENTIAL given the sluggish administrative pace of those governments. U.S. assistance requested for 1975 will not begin to flow until 1976, due to delayed enactment of foreign assistance appropriations. Alternatives #1. Increase economic aid over 1975 proposed levels and maintain FORD military aid at those levels, with a total of $1,023 million (State req.). #2. Maintain 1975 proposed levels, with the exception of reduced aid to Jordan, with a total of $775 million (OMB rec.). #3. Reduce aid to levels more justifiable in programmatic terms, with a total of $505 million. Analysis Alternative #1: - is designed to provide greater incentives for cooperation on a Middle East settlement. - includes higher levels of economic aid to Egypt, Syria and Jordan, which were proposed before the extent of aid from Arab oil countries was appreciated. - proposes levels of aid to Jordan difficult to justify in terms of that country's needs and its decreased role in negotiations. - minimizes flexibility by raising assistance levels before we receive anything in return. Alternative #2: - is neutral as regards signals but communicates confidence in the established negotiating strategy. - takes account of the diminished importance of Jordan in the negotiations and of the increased economic aid from Arab oil producers. - does not take into account increased levels of oil producer assistance to Egypt and Syria. Alternative #3: - reflects changed diplomatic and economic conditions. CONFIDENTIAL CONFIDENTIAL 18 - takes into account the massive assistance flows from oil producer countries to Egypt, Syria, and Jordan. - shifts our assistance strategy away from resource transfers toward a broader technical assistance orientation in which OUCS the United States has an advantage over Arab oil producers. - shifts balance of payments support requirements onto the STYNT Arab oil countries. Agency Request: Alternative #1 - increase assistance over 1975 Budget level. The NSC strongly supports the State request. The levels recommended reflect the judgment of Secretary Kissinger as to the mix of U.S. participation in security and development efforts in the area most likely to encourage the parties to continue their efforts to attain a lasting peace. OMB Recommendation: Alternative #2 - maintain assistance at 1975 Budget level, with the exception of Jordan. State's decisions on economic assistance were made before the impact of the Rabat conference, discussed above, was appreciated. (DOD concurs in the lower military assistance level for Jordan.) CONFIDENTIAL CONFIDENTIAL FOREIGN ASSISTANCE 1976 Budget Issue#12: Military Assistance to South Vietnam Statement of Issue How much grant military assistance for South Vietnam in 1975, 1976 and Transition Quarter should be requested in the 1976 budget? LIBRARY 1975 1976 T/Q Total FORD Approp. Suppl. Est. Est. Request ($ millions) Alt. #1 (NSC) 700 300 1293 355: 2648 Alt. #2 (DOD) 700 - 1293 355 2348 Alt. #3 (OMB) 700 300 1000 250 2250 Background Prior to December 3, there was agreement on the levels for military assistance to South Vietnam - $700 million in 1975, $1000 million for 1976 and $238 million for the transition quarter. It was understood that DOD probably would wish to submit a supplemental request later for $300 million for 1975 if a sizable attack occurs in the coming dry season. Secretary Schlesinger, with Dr. Kissinger's agreement, has now decided to increase his 1976 recommendation to $1,293 million, based on recent field visits by DOD staff (Ambassador Martin's estimate was $1,950 million.). DOD states that the additional $300 million for 1975 and $293 million for 1976 will be required whether or not there is a major enemy attack this spring. DOD is, therefore, prepared to assert now the need for $1,293 million for 1976, as well as an increase of $117 million for the transition quarter (from $238 million to $355 million) However, Secretary Schlesinger does not wish to include a request for the $300 million supplemental for 1975 in the 1976 Budget on the grounds that the chances for securing additional 1975 funds from the Congress are poor at this time but should be more favorable later after the anticipated North Vietnamese offensive. Secretary Schlesinger also recommends that the President indicate in his Budget Message that additional funds will probably be needed in 1975 although they are not being requested now. E.O. 12356, Sec. 3.4 (b) White House Guide Lines, Feb. 24, 1983 CONFIDENTIAL By DAW NARS, Date 6/27/85 CONFIDENTIAL Alternatives #1. Request $1293 million for 1976 and $355 million for the transition period. Propose a $300 million supplemental for 1975 in the 1976 Budget. #2. Request $1293 million for 1976 and $355 million for the transition period. Make no provision for a 1975 supplemental except by reference in the Budget Message (DOD rec.). LIBRARY #3. Request $1000 million for 1976 and $250 million for the transition FORD period. Propose a $300 million supplemental in the 1976 Budget (OMB rec.). GERALD Analysis The only apparent advantages of a 1976 request of $1293 million would be to signal (1) to the Congress that $700 million annually clearly is not enough to fund the war and (2) to Hanoi our intention to support South Vietnam. This approach, however, risks antagonizing the Congress at a time when the case for an 85% increase might be more difficult to make than later when an offensive is under way. As for the 1975 supplemental, failure to request the $300 million 1975 supplemental in the Budget could make a 1976 request of $1293 million appear unreasonably high compared to the $700 million appropriated for 1975. Alternative #3 would assert the validity of a $1000 million level for both 1975 and 1976, while leaving open the option to amend the 1976 request upward later if justified by events in South Vietnam. DOD Recommendation: Alternative #2 -- Request $1293 million for 1976 and $355 million for the transition period. Defer the 1975 supplemental. NSC Recommendation: Alternative #1 -- Request $1293 million for 1976 and $355 million for the transition period. Include a $300 million supplemental request for 1975 in the 1976 Budget. OMB Recommendation: Alternative #3 -- Request $1000 million for 1976 and $250 million for the transition period. Include a $300 million supplemental request for 1975 in the 1976 Budget. CONFIDENTIAL EX-IM Bank THE WHITE HOUSE WASHINGTON FORDO & LIBRARY CERALD MEMORANDUM FOR: THE PRESIDENT FROM: Roy In Ash SUBJECT: 1976 Budget decisions: Export-Import Bank of the United States The agency request and my recommendations with respect to 1976 budget amounts for the Export-Import Bank are presented in the tabulation attached (Tab A). We have not yet had an opportunity to discuss my recommendations with the Bank. One key issue has been identified for your consideration (detail at Tab B). Program Level The Export-Import Bank recommends a $17.3 billion pro- gram level, an 84 percent increase over the estimated 1975 level, in order to meet all potential new business. OMB recommends a $10.4 billion program level, a 10 percent increase over 1975, in order to encourage greater selectivity in lending and to moderate the federal govern- ment's demand on the domestic credit market. Decision: Approve agency recommendation Approve OMB recommendation Attachments TAB A FORD EXPORT-IMPORT BANK OF THE UNITED STATES 1976 Budget Summary Data (In millions) Limitation on Program Employment, end-of-period Program Activity Full-time Activity a/ at 100% Permanent Total 1974 actual 5,265 8,991 399 405 1975 January budget 6,403 13,570 420 425 enacted b/ supplemental recommended 0 0 0 0 OMB recommendation 6,403 13,570 420 425 1976 planning ceiling XXX XXX XXX XXX agency request 9,457 17,275 500 521 OMB recommendation 5,698 10,400 420 425 ransition period agency request 2,364 4,319 500 521 OMB recommendation 1,425 2,600 420 425 1977 OMB estimate 5,698 10,400 420 425 / Eximbank's statutory limitation includes guarantees and insurance counted at 25 percent of face value. b/ Congressional action is uncompleted. TAB B EXPORT-IMPORT BANK OF THE UNITED STATES 1976 Budget Statement of Issue What level of Eximbank lending should be permitted in 1976? Eximbank Program Levels ($ billion) 1974 1975 1976 Alt. #1 Alt. #2 Budget Est. Req. OMB Rec. Direct Loans 3.9 3.6 3.5 6.1 3.9 Discount Loans 0.9 2.0 1.3 2.3 1.4 Guarantees and Insurance 4.2 8.0 4.6 8.9 5.1 Total Program 9.0 13.6 9.4 17.3 10.4 Outlays* 1.2 1.3 1.3 1.8 1.1 Background The Eximbank provides direct credits to support U.S. exports, and refinances (discounts) and insures export loans by U.S. banks and exporters. Direct loans are currently charged a 7 or 8 percent interest rate. The Bank normally provides credits for 30 to 45 percent of the value of an export transaction, the balance being covered by a cash downpayment and commercial financing. The Bank has grown rapidly over the past five years. This has been the result of its aggressiveness in seeking new business and of the fact that its interest rate remained low as commercial export credit rates were rising. With generous pro- gram limits, there was no incentive for the Bank to be selective in its use of funds. As a result, Exim has tended to become the lender of first resort at the expense of private credit. In 1974, the Bank for the first time in several years found itself constrained by its budget ceiling. Forced to begin restraining demand for its financing, Exim raised its interest rates (from 6 percent to 7 and 8 percent) and began supporting a smaller portion of export transactions. Nevertheless, the Eximbank has continued to seek increases in its ceilings to * Eximbank outlays are excluded by statute from the Budget totals. allow it to extend credits to all comers regardless of GERALD FORM demonstrable need for subsidized financing. The Eximbank's 1976 budget request of $17.3 billion represents an increase of 92 percent over the 1974 level, 27 percent over the 1975 Budget, and 84 percent over the estimated 1975 level. This growth is considerably higher than that of exports as a whole. The budget request follows a pattern established over the past few years: sizable increases in the proportion of exports financed by the government and budget limits that exceed the business which can actually be done by the Bank without significantly relaxing loan criteria. Alternatives #1. $17.3 billion. Provide authority sufficient to meet the demand for loans under current Eximbank lending policies (Agency req. ) #2. $10.4 billion. Limit program growth to established growth in exports thereby keeping pressure on Exim to limit its program to priority uses (OMB rec.). Analysis The Eximbank request would result in Exim financing 22 percent of the value of all nonagricultural exports in 1976, compared with 12 percent in 1970, 14 percent in 1974 and an estimated 13 percent in 1975. The Bank argues that it must continue to meet demand, especially since "our nation is facing the specter of large outflows of payments for energy and raw materials" over the next few years. The request must be considered in terms of both its domestic impact and its impact on the international economic position of the United States. Domestically, Exim's subsidy diverts credit from other priority uses such as homebuilding, business invest- ment, and State and local governments. Also, because the goods are exported rather than consumed at home, Exim's subsidy has a less favorable effect on inflation and business activity than an equivalent subsidy applied to production for domestic use. In terms of our international position, the United States must export all it can, but artifically swelling the level of exports through a subsidy does nothing to lower the real cost to the economy of energy and raw materials imports. Further, credit such as Exim provides docs not get repaid for 8 to 15 years, causing a capital outflow until repayment occurs and a weakening of the near-term balance of payments. Finally, interest subsidies tend to give some foreign buyers an advantage over their U.S. competitors. Pan Am and TWA have recently complained of this in airline competition. LIGRABLE GERALD FORD In our view, Exim is justified in providing below-market interest rates only if necessary to meet foreign government credit competition. Efforts are now underway to reduce this competition among the U.S., Europe and Japan. In early October, an agreement in principle was reached by these countries not to provide official credits to support exports to each other or to the oil-rich countries, although in practice Exim disagreement with details of the agreement has made it ineffective. Work on a more specific "gentlemen's agreement" limiting official rates and maturities is now at an advanced state. Continuing budgetary constraints would encourage Exim to play a more positive role in these negotiations. The OMB recommendation would provide such a constraint by increasing Exim's program ceiling by the expected rate of growth in U.S. exports. This will require added discipline on the part of the Bank to restrain demand for its loans, perhaps by increasing its interest rate or by developing a screening pro- cedure to better identify transactions where commercial financ- ing is unavailable. Agency Request: Alternative #1, a $17.3 billion program. OMB Recommendation: Alternative #2, a $10.4 billion program. Energy THE WHITE HOUSE WASHINGTON GERALD R. FORD LIBRARY MEMORANDUM FOR: THE PRESIDENT FROM: Roy Ash SUBJECT: 1976 Budget Decisions - Energy Research and Development Administration The agency request and my recommendations with respect to the overall 1976 budget amounts for the new Energy Research and Development Administration (ERDA) are attached (Tab A). The recommended budget for specific energy research and develop- ment programs - together with a summary of all ERDA programs - is attached (Tab B). Also attached is an overview of our energy research and development strategy (Tab C) One issue has been identified for your consideration (Tab D). Since ERDA has not yet been officially established, we have conducted the budget discussions on ERDA programs chiefly with the Chairman of the AEC, but also with representatives of Interior, NSF, and --agencies that will be contributing programs to ERDA. Because he has only just been confirmed as ERDA Administrator, Dr. Seamans is unlikely to have an opportunity for in-depth review of his budget prior to completion of the overall 1976 budget. As a result, Dr. Seamans should be permitted to consider reprogramming or budget amendment actions next spring after he has completed his overall assessment of the ERDA budget. In general, however, I believe the 1976 budget for ERDA is adequate to reflect Administration commitment to a strong, balanced energy R&D effort and should provide a reasonable basis for Dr. Seamans to discharge his new responsibilities. My major recommendations in the FY 1976 ERDA budget are as follows: Energy Research and Development The recommended budget for energy R&D, summarized at Tab B, includes increases in the following major areas: Nuclear - Breeder program: Continue development of the Liquid Metal Fast Breeder Reactor (LMFBR) including the con- struction of the Clinch River Breeder Reactor (CRBR) FORD 2 demonstration plant. However, because of the $1 billion growth in the cost estimate for the CRBR project, the new ERDA Administrator will need to conduct a complete review of the LMFBR program before any final decision to proceed with the CRBR demonstration plant. - Fusion: Conduct research and development on Controlled Thermonuclear Fusion at the level requested by AEC including the initiation of a $215 million test reactor project. This funding level should result in signifi- cant progress in a technology which potentially may be the ultimate major solution to U.S. power needs (beyond the year 2000). - Laser uranium enrichment: Accelerate the development of technology for using lasers to enrich uranium for civilian power reactor fuel. Although technically difficult, the laser separation process could lead to major reductions in the cost of enriching uranium and to recovering more fuel from mined uranium. Non-Nuclear - Fossil fuel: Continue the growth in programs aimed at producing clean liquid and gaseous fuels from coal, burning coal directly without environmental damage, and improving the technology for coal extraction, both underground and above ground. - Solar: Expand further research and development efforts in solar energy. Principal thrusts are in heating and cooling of buildings, solar thermal production of energy, wind power and photo voltaics (converting solar radia- tion directly to electricity in solar cells). - Oil, gas, and shale: Maintain programs to supplement industry's efforts to develop improved methods of oil and gas extraction and oil shale conversion. - Stack gas cleaning: Continue the important development efforts in environmental control with emphasis on improved technologies for stack gas desulphurization to permit use of high sulphur coal. - Conservation R&D: Continue efforts in conservation R&D with major programs in electric transmission distribution and storage, automotive propulsion and improved buildings and materials technology. 3 Non-Energy R&D ERDA Programs The recommended budget for non-energy R&D programs of ERDA, also summarized in attachment B, covers the following principal program areas: Defense Programs FORD LIBRARY - Continue research and development and underground testing of nuclear weapons at about the FY 1975 level of effort (FY 1976 outlays $535 million). - Produce nuclear weapons for DOD at slightly below the FY 1975 funding level (FY 1976 outlays $489 million) Require decrease in overhead costs consistent with reduced production output. - Continue research and development on Adm. Rickover's program to develop improved propulsion reactors for Naval ships including Trident and high speed attack submarines (FY 1976 outlays $239 million). - Continue operation of four production reactors which make plutonium and tritium for nuclear weapons. Have AEC renegotiate its current contract with the Washing- ton Public Power Supply System to seek a $30 million increase in revenues from the sale of steam from the N Reactor (Richland, Washington). In return for a more equitable cost sharing, offer the Northwest utilities a several year extension of operations for N Reactor beyond the presently scheduled shutdown in October 1977. Uranium Enrichment and Other Programs - Continue to expand the capacity of the current AEC plants which provide enriched uranium fuel for civilian power reactors (FY 1976 outlays $745 million). Increase the price charged by the Government for uranium enrichment to a level comparable to that which a commercial enterprise would require (increase in FY 1976 revenues will be $86 million for a new uraniv enrichment revenue total of $661 million) to encourage private entry into the building of future uranium enrichment capacity. - Continue the operation of AEC's four large high energy physics accelerators at a slightly higher rate of utilization in order to provide a more productive scientific output (FY 1976 outlays $182 million). FORD 4 Agency Appeals AEC AEC originally appealed for the restoration of $77 million of FY 1976 program outlays for its portion of the ERDA budget. The appeals covered a large number of relatively small items. However, in subsequent discussions with Chairman Ray, she listed critical appeals totalling $32 million primarily for civilian power reactor development, design of a radioactive waste storage facility, weapons research and development, physical research, and environ- mental effects research. We have reviewed Chairman Ray's compromise solution and are in general agreement that these are the priority areas for any restoration of funds. However, in order to avoid a possible impact on the production of nuclear weapons, we would recommend that within the $32 million an addi- tional $5 million be provided for the nuclear weapons program. This can be accommodated by reducing the amounts added to physical research and environmental effects research without a major program impact. Outside of these appeals, the only major program issue remaining for the AEC programs is the proposed construc- tion of a new experimental device for high energy physics research designated the Positron-Electron Project (PEP). We would continue to recommend against starting this major $72 million facility in the 1976 Budget and the Science Adviser concurs in its deferability This issue is covered under Tab D. AEC also originally appealed OMB's decision to add $116 million of revenues by (a) increasing the charge for uranium enrichment ($86 million) and (b) increasing the price charged for steam from the N Reactor ($30 million) at Hanford, Washington. (This reactor is used to produce weapons material but sells excess steam to the Bonneville Power Administration.) However, AEC no longer objects to showing the increased charge for uranium enrichment in the FY 1976 budget, which will be included under proposed legislation. In addition, AEC and Bonneville appear to have reached a satisfactory basis upon which to negotiate an increased price for the steam from the N Reactor. Interior The appeals for the Office of Coal Research (OCR), totalling $25 million in outlays, are in three areas: coal demonstra- tion plant program, transmission/distribution research, and administrative support costs. 5 OCR indicates that $8 million is critical to ensure that the coal demonstration program is not held up because of inability to order long-leadtime items, and Interior FORD has agreed not to further appeal other items if this additional allowance is approved. OMB would agree that this is the priority area for restoration of funds. Appeals for the Bureau of Mines, totalling $6 million in outlays, are for continuing a demonstration wood waste-to- oil project and for expanding its underground stimulation program for secondary and tertiary recovery of oil and gas. We believe these increases are without program merit. Interior will not further appeal. In the Transmission/Distribution R&D program an increase of $3.5 million in outlays is appealed primarily to keep FY 1976 at the FY 1975 program level. Interior will not appeal to you for a further increase with approval of this allowance. NSF An additional $11 million in outlays is appealed for solar R&D over an OMB mark of $53 million which has already allowed substantial increases relative to FY 1975. Thus, no additional allowance is recommended. No further appeal is anticipated. The Agency appeal for geothermal R&D is $11 million in outlays over its initial allowance of $16 million. The present OMB mark, while below the 1975 level of $20 million, allows for continuing research on advanced technology subsystems but relies more on the private sector to apply technology. NSF will not appeal. Summary of ERDA FY 1976 Budget and Appeal Actions Director's Agency Revised OMB Req. Review Appeal Recom. AEC programs 3,554 3,313 +193 +32 Interior programs 423 349 +39 +12 EPA programs 16 9 - - FEA programs 3 3 - - NSF programs 66 73 +22 - Total Outlays 4,062 3,747 +253 +44 TAB A ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION 1976 Budget Summary of Resources and Personnel Employment, (in millions) end-of-period Budget Full-time Authority Outlays Permanent Total 1974 actual 1/ 2,490 2,326 6,742 7,016 1975 January Budget 3,431 3,128 7,105 7,436 enacted 3,545 3,231 XXX XXX OMB recommendation 3,496 3,135 7,400 7,731 1976 agency request (AEC-NRC + DOI + NSF + EPA + FEA) 4,508 4,062 8,134 8,785 OMB recommendation 4,204 3,791 7,611 7,950 Transition period OMB recommendation 1,172 1,108 7,611 7,950 1977 OMB estimate 4,639 4,539 7,828 8,167 1/ Estimates for 1974 and 1975 are computed from personnel and resources associated with those programs designated for transfer to ERDA. GERALD LIBRARY FORD TAB B Summary of Energy and ERDA Programs (Outlays in $ millions) Agency Directors FY 1976 Revised OMB FY 1974 FY 1975 Request Review Appeal Recommendation Energy R&D Programs Fission (inc. laser uranium 540 682 761 747 +24 +5 enrichment) LMFBR (354) (449) (449) (457) (8) (0) Fusion 99 147 202 207 - - Fossil fuel 79 231 404 344 +17 +8 9 23 91 54 +11 0 Solar Oil, Gas, Shale 13 28 43 38 +6 0 Environment Control (inc. 58 52 80 49 - - stack gas cleaning) Conservation GERALD 36 55 132 is 79 +15 +4 Geothermal FORD 7 20 27 21 +11 0 Other LIBRARY 5 10 15 15 - I Total Energy R&D 845 1,243 1,755 1,553 +84 +17 Less Non-ERDA Programs -135 -199 -320 -215 - - Total ERDA Energy R&D 710 1,049 1,435 1,338 +84 +17 Non-Energy R&D Programs Defense related 1,344 1,494 1,657 1,602 +17 +10 Uranium Enrichment production 342 497 731 734 - - Other 728 717 885 835 +36 +17 Total All ERDA 3,124 3,757 4,708 4,509 +137 +44 -798 -622 -646 -762 +116 0 Less, Revenues Total ERDA Budget 2,326 3,135 4,062 3,747 +253 +44 TAB C 1 Overview Paper Energy R&D Crosscut Review 1976 Budget LIBRARY I. Introduction A. Role of R&D in Overall Energy Policy Although all the specifics of a national energy policy have not yet been agreed upon, it is now clear that, for reasons of national secu- rity as well as economic stability, the U.S. must move to become less dependent on foreign energy supplies. R&D, although by no means the only potential contributor to achieving U.S. energy inde- pendence, can provide important new energy supply and utilization options for the future. Thus, the overall goal of an energy R&D program is to assure development of a range of commercially viable and environmentally acceptable technological options to provide the capability to use more fully U.S. domestic energy resources. Due to long development lead times, major payoffs from energy R&D will come after 1985. However, because of gradual deple- tion of domestic fossil energy resources currently in widespread use and an expected increase of 50% in total U.S. energy demand by 1985, it will be important to have new technologies available for possible com- mercialization in this time frame. 2 B. Motivation for Continuing to Invest in Energy R&D 1. Resource Considerations Domestic Energy Consumption and Supplies (in 10¹⁵ Btu or Quads) Consumption Proven Recoverable Fuel Source 1972 Reserves* Resources* Coal 12.5 10,746 33,000 Oil 34.1 272 590-1,920 Gas 22.1 257 1,038-1,701 FORD Shale 0.0 551 1,053 Hydro 2.9 N/A N/A Nuclear 0.6 29,200 88,200 Solar 0.0 0.0 N/A Geothermal 0.0 negligible unknown TOTAL 72.2** 40,000+ 132,000+ Although oil and gas, including imports, account for about 80% of domestic energy consumption, they represent less than 2% of U.S. domestic proved recoverable energy reserves and about 1% of recov- erable resources. - Even at $11/barrel (in 1974 dollars), domestic production of oil and gas is likely to peak in the middle 1980's and decline thereafter, even with extensive use of advanced recovery technologies and aggres- sive exploration of OCS and Alaska. By contrast, coal and nuclear fuel sup- plies--which currently provide for only 18% of domestic consumption--account for the remaining 98% of energy re- serves and 99% of resources. * Entries correspond to full energy content of resource and do not take account of efficiencies of utiliza- tion. 1985 demand is estimated to be between 103 and 118 Quads, depending on the prevailing world price of oil. 3 - Although domestic coal supplies are extensive and accessible, their use is severely limited by environmental constraints. Widespread use of coal without relaxing environmental regulations will require new clean conversion technologies (e.g., gasi- fication, liquefaction) or those permitting direct use of coal (e.g, flue gas desulphurization). - Current projections of nuclear plant capacity indicate that in 20 to 30 years, all usable supplies of ura- nium to fuel current generation of reactors would be fully committed. FORD Tapping 98% of known U.S. nuclear resources, represented by U238 and thorium, will require develop- GERALD ment of breeder reactors. - Potentially large solar and geo- thermal resources are currently limited by technological and economic uncertainties associated with their recovery. Their eco- nomical use will require develop- ment of new or improved technolo- 2. Possible Benefits of Energy R&D Could provide insurance for the future against unavailability of reasonably priced foreign and domestic oil, and gas and uranium. Could make available lower cost, more efficient and environmentally prefer- able technologies to those currently available. Could broaden range of energy resource utilization options available to U.S. at an earlier date than would other- wise be the case, and at a cost far below the cost to the U.S. if options are not available when needed. 4 Could demonstrate U.S. resolve to become less energy dependent and, thus, increase-- to some extent-- U.S. leverage in international matters related to energy. C. Justification for Federal Participation Rationale for Federal involvement in energy R&D is to compensate for inability of market system to meet adequately, or in a timely fashion, certain important U.S. goals in the area of national security, environmental protection, and economic growth and stabili- ty. More specifically, Federal efforts may be needed: & FORD - To increase the probability of success GERALD of the Nation's energy R&D effort by LIBRARY assuring program continuity despite short-term fluctuations in market incentives; - To accelerate significantly achievement of U.S. capability to make use of the full range of its domestic energy re- sources; - To ensure that the U.S. energy R&D effort gives adequate emphasis to all relevant national goals, particularly those which cannot be readily inter- nalized into market incentives by other forms of Federal intervention; - To supplement private sector investment at stages of R&D where appropriable benefits are not commensurate with the costs and risks (e.g., basic research, first demo plants); - To compensate for structual imperfections in the market such as excessive fragmen- tation and undercapitalization, and in- cluding those which may result from Federal intervention justified on other public policy grounds (e.g., antitrust laws, utility price regulations, etc.) i and 5 - To support Federal regulatory activities and procurement required for fulfillment of recognized missions of certain Fed- eral agencies. While in principle Federal regulation is an alternative to Federal support of R&D, in practice, past attempts to promote technological innovation through regulation have tended to introduce long-term dis- tortions in the market and, in some cases (e.g., auto emission regs.), have compro- mised other important goals (e.g., fuel efficiency) and created disincentives to development of long-term solutions (e.g., new auto engines). Though the need for continuing, for the present, a Federal role in supporting energy R&D is indicated, it is imperative that the Federal effort be structured to encourage private investment and to avoid unnecessary government expenditures which merely replace private efforts. - Private sector participation in planning, financing, and executing the R&D program will reduce require- ments for Federal support and will increase the likelihood that tech- nologies will be commercially viable and rapidly introduced. II. Status of U.S. Energy R&D Effort A. Status of Development of Various Energy Utilization Technologies Table 1 summarizes the development status of the major new energy technologies. B. Recent Trends in Federal and Private Energy R&D Expenditures On June 29, 1973, a major acceleration of the Federal energy R&D program was an- nounced. Supplemental funds were appro- priated for FY 1974 and a major expansion 6 Table 1 DEVELOPMENT STATUS OF MAJOR NEW ENERGY TECHNOLOGIES Current Stage 1 2 Date of First Technology Area of Development Commercial Demonstration Nuclear Light Water Reactors Commercial in service Gas Cooled Demonstration 1975 Liquid Metal Breeder Pilot Devel. 1983 Other Breeders Applied Res. unknown Fusion (CTR + Laser) Basic Res. post-2000 Coal Low Btu Gasification Pilot Devel. 1975 High Btu Gasification Pilot Devel. 1980 Liquefaction Pilot Devel. 1980 Clean Combustion Applied Res. mid-1980's FORD Geothermal Dry Steam Commercial in service Wet Steam & Liquids Applied Res. 1980 Hot Dry Rock Basic Res. unknown Solar Heating of Buildings Demonstration 1974 Cooling of Buildings Pilot Devel. late 1970's Photothermal Pilot Devel. early 1980's Photovoltaics Applied Res. post-1990 Oil, Gas and Shale Advanced Oil Recovery Pilot Devel. late 1970's Surface Shale Retort Demonstration late 1970's In-Situ Shale Retort Pilot Devel. mid-1980's Control Technology Limestone SGC Demonstration 1974 Advanced SGC Pilot Devel. late 1970's Conservation Advanced Auto ICE Demonstration 1975 Light Weight Diesel Pilot Devel. early 1980's Industrial Solar Steam Applied Res. early 1980's Home Total Energy Systems Pilot Devel. late 1970's 1/ Definitions: -- Basic Research: Fundamental scientific problems have not been overcome. -- Applied Research: Laboratory experiments have verified that no fundamental scientific problems remain to be solved. -- Pilot Development: Pilot plant (approximately 1/100 scale) operations or prototype assembly have verified that major engineering problems associat ed with integrated systems have been solved. -- Demonstration: First near-commercial scale demonstration has successfully operated, although perhaps not in an economically competitive way because of first-of-a-kind costs. -- Commercial: Technology is commercially available and presently competitive with existing alternatives. 2/ Rapid commercial introduction could follow by 5-10 years, depending on relative economics. 7 of the program was approved by the Congress for FY 1975. - The FY 1975 program includes over $1.8 billion for direct energy R&D and an additional $200 million for supporting basic and environmental, and health effects research. The estimated five- year cost of the program is $11.3 billion in Federal funds with sub- stantial additional funds expected from the private sector. - Program balance shifted away from nuclear: 63% nuclear and 37% non- nuclear in 1974; 49% nuclear and 51% non-nuclear in 1975. FORD is - Major R&D increases from 1974 to 1975: coal, geothermal, solar, nu- SERALD LIBPARI clear fusion and fission, and envi- ronmental control. - No significant additional Federal funding in 1975 for end-use con- servation (including automotive) and oil shale R&D. Though difficult to estimate accurately, private sector funding for energy R&D cur- rently appears to be over $1 billion an- nually and increasing substantially. - A survey of 1,400 firms indicates increases in private spending on energy R&D of over 20% in both 1973 and 1974. - The energy R&D areas with the greatest growth rates in private support between 1972 and 1973 were coal (60%) , oil shale (20%), and nuclear fission (40%). Table 2 compares the estimated dollar levels of Federal and private sector expenditures. 8 Table 2 Private and Federal Energy R&D Expenditures (Millions of Dollars) Private Funding (Lower Limits) * Federal Funding (OBS) Program Area CY 1974 FY 1974 FY 1975 1. Conservation 150 46 88 - End-Use (56) (4) (8) - Improved Efficiency (40) (21) (59) - Automotive (54) (21) (21) 2. Oil, Gas & Shale 395 14 40 - Oil & Gas (390) (12) (29) - Shale (5) (2) (11) 3. Coal 111 136 410 4. Environmental Control 217 66 65 - Sulphur Oxides (17) (44) (25) - Other Fossil, Thermal (61) (15) (40) - Automotive (139) (7) (0) 5. Nuclear Fission 125 629 730 6. Nuclear Fusion 3 101 176 7. Other 6 34 105 - Solar (2) (16) (53) - Geothermal (2) ( 9) (34) - Misc. (2) ( 9) (17) 1026 1614 TOTAL DIRECT ENERGY R&D 1007 * Most recent available data. Figures are based on two NSF surveys of industry spending. Because of inevitable non-respondents, figures represent lower limits on private funding. 9 Costs of R&D program are increasing due to inflation. - Five-year Federal program previously estimated to cost $11.3 billion in 1974 dollars extrapolates to $12.6 billion in current year dollars, assuming decline to 7% inflation in FY 1977. (Recent cost estimate of $1.7 billion for the LMFBR demo plant includes $643 million for inflation.) - Inflation, plus the economic down- turn, are holding down private R&D funding by electric utilities and auto companies but profits clearly not limiting R&D by oil and coal companies. RALD CERALD FORD Private spending for R&D in the extractive and regulated industries has characteristi- cally been around 1% or less of sales. In energy R&D, the private sector's $1 billion plus government's $2 billion for 1975 is still small relative to the expected $275 billion energy industry sales for 1974. - By comparison, in high technology innovative industries, private R&D funds have been 3%-4% and in those where a national interest is in- volved, Federal support has brought the investment much higher (e.g., to 8% in electronics and 18% in aerospace). C. Program Content of Current Federal and Private Sector Efforts Nuclear Fission: Efforts focused on ad- vanced converter and breeder reactors: - Liquid Metal Fast Breeder Reactor (LMFBR) , mostly with Federal funds. Utility consortium contributing $250 million for first demonstra- tion plant. 10 - Largely private development of ad- vanced converter High Temperature Gas Cooled Reactor (HTGR) with government support, mainly in fuel cycle and safety. - Small federally-funded efforts on gas cooled and molten salt breeder concepts. - Federal and privately-funded efforts on new technologies for uranium enrichment. Coal: Efforts focused on advanced mining tech- nology, coal gasification and liquefaction, and direct combustion: - A joint government/American Gas Associ- ation Pilot Plant Program in high Btu gasification (1/3 industry, 2/3 government funding). GERALD FORD LIBRARY - Pilot plant projects for liquefaction; two government-funded, two cost- shared, and several exclusively industrial process development units (lab scale). - Joint Federal/industrial effort on advanced coal mining technology. - Mostly Federal effort in advanced direct combustion of coal. Oil, Gas and Shale - Small Federal effort in advanced oil and gas recovery. Large private sector effort. - Small Federal and private R&D or in- situ recovery of oil shale. No significant Federal R&D on surface technology because it is substantially developed. 11 Conservation - Small Federal efforts in end-use con- servation, in residential/commercial, and industrial and transportation sectors. Private efforts significant but not large. - Federal auto R&D on gas turbines, steam engines, stratified charge. Major private efforts in stratified charge, gas turbine, and improvements to current internal combustion engine. - Federal efforts (mostly cost-shared) in electric transmission; distribution and storage small compared with indus- GERALD FORD LIBRARY trial support. Other Energy Sources - Federal solar program distributed across the various solar technologies, plus a congressionally mandated demo- stration program in solar heating and cooling. - Federal geothermal efforts concentrate on resource assessment, advanced com- ponents and uncertain resources (hot dry rock). Private sector proposes a 50 Mw demonstration plant. - Fusion programs (both magnetic con- finement and laser) largely funded by government with small private laser fusion efforts. Environmental Control Technology - First generation sulphur removal technology development programs are now at demonstration phase and have been funded both by private sector as well as government. 12 III. Energy R&D Program Strategy A. Impact of Current Energy Policy on R&D Program So far, the energy R&D program has not been hampered by the lack of a detailed national energy policy because: - longer-term payoff of most R&D allows some decoupling from near-term policy decisions. - developing technical options can be pursued without firm commitment to rate or scope of their commercial application. FORD - existence of substantial national consensus for broadening and accel- LIBRARY erating energy R&D programs. However, U.S. cannot continue to plan R&D program without clear policies on imports, incentives, regulations, etc. Lack of such policies is beginning to impair both Federal and private R&D and demonstration efforts. - Colony group postponed first commer- cial oil shale plant citing rising costs plus uncertainty over govern- ment policy on stimulating develop- ment of shale. - NSF/FEA survey of industry R&D on synthetic fuels indicates commitment levels depend greatly on early reso- lution of uncertainties in Federal leasing, strip mining, and emission policies. - Uncertainty over NOx standard for autos tends to bias industry R&D towards less efficient engines which are sure to meet most rigid standard. As R&D projects get into more expensive development and demonstration phases, where fewer options can be carried, it 13 becomes more critical to know which options are consistent with strategy and timing of overall energy policy. Examples: - Natural gas deregulation might de- crease the payoff in near-term of high Btu gas from coal program. - If synthetic fuels were to become a key element in pre-1985 Federal energy strategy, a "crash" program on coal and oil shale conversion R&D (at expense of other R&D efforts) may warrant consideration. FORD B. Other Major Planning Uncertainties Affecting R&D Program Strategy Urgency: The expected time when new energy technologies, proposed for development, will be needed to expand useable energy resource base. Economics: Future commercial competitive- ness of new energy technologies. There are two aspects: - Uncertainty in the cost of the energy from new technologies. - Uncertainty concerning the future prices of domestic and foreign fuel alternatives. Environmental: Types of pollutants to be regulated in the future and degree of reg- ulation, as well as a lack of knowledge concerning the precise cost of control for pollutants already under regulation. Technical Risk: Sophisticated new technol- ogies require solutions to difficult tech- nical problems. 14 C. Criteria for Structuring Energy R&D Program Priorities among specific R&D areas (e.g., nuclear, coal, solar, etc.) are determined by: - Potential impact of new technology on energy supplies. - Timing of impact. - Probability R&D will be successful. - Environmental consequences of new technology. GERALD FORD LIBRAFT - Severity of any barriers to rapid commercialization. Additional criteria for Federal R&D efforts relate to extent to which Federal support is needed to supplement private efforts in order to ensure timely development of an important energy technology (see p. 4). D. General Elements of Current Federal Energy R&D Strategy Minimum Federal involvement in R&D projects with good potential for early commercial payoff and where substantial private sector resources and capability exist (e.g., oil and gas recovery, conservation, automotive, etc. ) Strong Federal support, on a cost-shared basis, for longer-term (10 years +) R&D programs aimed at making use of vast U.S. coal and nuclear resources (e.g., breeder nuclear reactor, coal liquefaction and gasification, etc.). - This includes partial Federal support of expensive, high-risk, first-of-à- kind demonstration plants. 15 Continuing Federal support of programs in basic research, environmental and health effects research, and safety where there is no strong incentive for private sector efforts. Continuing Federal support, even without substantial industry cost-sharing, of very long-range, high-risk R&D programs which have potential for great payoff (e.g., fusion, central station solar electric). D. Level of Effort Considerations The appropriate levels of effort for Federal energy R&D programs are deter- mined principally by three factors: GERALD FORD LIBRARY - Time at which certain technologies are desired for commercial intro- duction. - The expected level of private sector effort. - The acceptable level of risk of not completing developments at the desired times. - Capability of program to usefully absorb funds. There are, generally, three possible Feder- al strategies: - Crash: This strategy would entail the Federal Government funding all poten- tially promising technological options, through the demonstration phases, at the earliest possible time and with little or no reliance on private sector funding. Obviously, the most risk averse approach. Federal expenditures would be $25-30 billion over the next 10 years. 16 - Accelerated but Orderly: This strategy would imply that the Federal Government ensure that no major resource utilization options are being ignored. Federal Government would support research with nonapplicable benefits and would share costs with private sector on expensive, high-risk projects that appear most promising. Federal expenditures would be $15-20 billion over the next ten years. - Minimum: Federal Government would only fund research in essential areas with nonappropriable benefits such as health effects research, support of regulatory activities, and basic research. Little or no government risk-sharing on pilot or demonstration plants. Federal expend- iture would be $3-5 billion over the next 10 years. FORD & LIBRARY GERALD Crash strategy would: - Ensure results of R&D at earliest time. - result in some inevitable waste due to pursuit of parallel technical approaches and rapid program buildings. - make transfer of technologies into com- mercial use harder due to large govern- ment role in R&D and early demonstration. Minimum program would: - not ensure that nuclear and coal options would both be viable by late 1980's. - not result in exploring the potential of other major long-term options (geo- thermal, solar, fusion). 17 FY 1975 strategy for Federal level of effort is accelerated but orderly. Current five- year program ($11.3 billion Federal, plus industry investment) would provide for developing, by 1985, major technological options in coal (i.e., liquefaction and gasification) and nuclear (i.e., LMFBR), as well as exploring the feasibility of other major long-term options (e.g., fusion, solar electric, etc.). Major reductions (say -25%) from current annual level of Federal expenditure would result either in slowing down the overall effort by 3-5 years, or in dropping some major R&D approaches (which would increase risk of not achieving program objectives in a timely fashion). FORD is 07V830 Major increases (say +25%) would permit acceleration of some of the longer-term options (e.g., solar) but, in general, would permit more technical approaches to be funded rather than significantly accelerate the results of major programs such as the LMFBR or coal liquefaction. TAB D Issue Paper Energy Research and Development Administration 1976 Budget Issue #1: Positron-Electron Project Statement of Issue Should a major new experimental facility be provided for high energy physics research in the 1976 Budget or deferred? Background High energy physics is at the frontier of scientific exploration into the basic nature of matter and energy. The U.S. program currently uses four large AEC accelerators and a major NSF supported accelerator as the primary experimental tools for this research: the FERMILAB (the newest and most powerful accelerator in the world--dedicated last May) near Chicago; the Stanford Linear Accelerator (SLAC) ; the Alternating Gradient Synchrotron (AGS) on Long Island; the Zero Gradient Synchrotron (ZGS) near Chicago; and NSF's Cornell accelerator. As part of the FY 1975 allowance, AEC and the Science Adviser were requested to conduct a study of the earliest reasonable time for shutting down the ZGS, which had been previously identified by AEC as the lowest priority of its four accelerators. The AEC/Science Adviser Report strongly recommends that the ZGS be kept open until CY 1979 to conduct important experiments. This is not an issue in the 1976 Budget. AEC believes that it is essential to continue to construct new experimental devices such as the $72 M Positron-Electron Project (PEP) at SLAC, which would allow the study of a new range of fundamental questions in physics in a presently inaccessible energy region through use of colliding beam storage rings. Potential competitors to PEP, only a year or so further downstream, are other "colliding beam" concepts involving major facilities. GERALD Alternatives FORD #1. Initiate PEP facility project in FY 1976. (Agency req.) LIBRAST #2. Defer initiation of next large machine (whether PEP or some competing project) to FY 1978 or later. (OMB rec.) 2 Analysis Budget Authority/Outlays ($M) 7/1-9/30 (PEP construction, not including 1976 1976 1977 1978 1979 1980 equipment and improvement) BA 0 BA o BA 0 BA o BA 0 BA o Alternative 1 (Agency request) 11 2 8 2 39 22 14 29 - 15 - 2' Alternative 2 (OMB recommendation) - - - - - - 11 2 39 17 22 27 Alternative #1: Pro: It is responsive to the high energy physics community's recommendations on new and existing accelerators. It permits more rapid exploitation of discoveries of new particles of matter which have recently excited high energy physicists. Con: It commits the Nation to 5 to 10 years of continued operation of SLAC after PEP becomes operational in 1979 and forecloses tradeoffs between PEP and its two competitors. It has an early budgetary impact. Alternative #2: Pro: It recognizes that in a period of fiscal stringency and constraints on science spending, there is no urgency for a new basic research facility of this type in 1976. It takes into account the view of the Science Adviser that while PEP is of high priority it should be given a thorough review and further that the need for operating funds in science takes priority over major new facilities in FY 1976. (Elsewhere we have recommended that appeals on operating level be partly granted.) Con: It defers a new start by two more years. Agency request: Alternative #1. OMB recommendation: Alternative #2. LOALD TUFO NRC NUCLEAR REGULATORY COMMISSION Comments OMB recommended $24 M less than the Commission request based primarily upon the sharp rate of growth of NRC programs at a time when the annual number of new reactors being ordered has leveled off. Upon reconsideration and review of the agency appeal, OMB recommends a potential restoration of $10 M recognizing the desirability of getting NRC off to a good start and to place the Administration in a more positive position on nuclear power safety and effective regulation. The agency continues to press for its original request and will appeal. (Issue paper attached) Budget Full-time authority Outlays permanent (in millions of dollars) employment 1974 actual 108 105 1538 1975 current estimate 155 147 2056 1976 agency request 243 209 2652 1976 OMB recommendation (including $10 M restoration) 225 195 2339 Affect of OMB recommendation on agency request -18 -14 -313 Transition period 52 59 2339 1977 estimate 214 207 2489 GERALD R. FORO NUCLEAR REGULATORY COMMISSION Background The Nuclear Regulatory Commission (NRC), established by the Energy Reorganization Act of 1974, inherits current Atomic Energy Commission (AEC) responsibilities for regulating the use of nuclear facilities and nuclear materials and for conducting a program of confirmatory assessment of the safety of nuclear reactors, whereas AEC's development responsibilities are transferred to the new Energy Research and Development Administration. NRC, like AEC today, is required to regulate nuclear facilities and materials in regard to their safety, environmental impact, safeguards and anti-trust implications and the financial qualifications of the applicant. NRC is also assigned new responsibilities under the Act primarily for environmental, safeguards and nuclear energy center siting research and studies. As the guardian of the public's nuclear health and safety, the RALD FORD Commission's budget is viewed as a sign of the Administra- tion's commitment to adequate nuclear power safety and effective regulation. Discussion Since AEC is about to be disestablished, we have discussed the FY 1976 NRC budgetary situation with NRC Chairman-designate Anders. Mr. Anders has taken a hard line against any reductions in the NRC budget. He has strongly defended the regulatory activities, the reactor safety research, and the newly established NRC responsibilities for environmental, safe- guards, energy siting, and other confirmatory research and studies. In addition to his defense on programmatic grounds, Mr. Anders cites his need to show others at the beginning of his new assignment that he will be a strong supporter of reactor safety research and regulatory activities. The reductions originally recommended by OMB staff were based primarily upon the sharp rate of growth of NRC programs at a time when the annual number of new reactors being ordered has leveled off. (outlays-$M) FY 1976 OMB (incl. FY 1974 FY 1975 Agency restoration) Regulatory Activities 54 6.9 93 85 Reactor Safety Research 45 56 78 76 New Environmental, Safe- guards and Nuclear Energy Siting Research and Studies 3 25 21 2 FY 1976 OMB (incl. FY 1974 FY 1975 Agency restoration) New NRC Superstructure and Program Support 6 9 13 13 Licensing Fee Refund - 10 - - Total Outlays 105 147 209 195 Personnel (1538) (2056) (2632) (2339) Although OMB recognizes that factors other than reactor numbers impact the NRC requirements, we believe that a 33% increase should be fully adequate for Mr. Anders to show himself to be an effective regulator and for the agency to meet its highest priority requirements. We are also concerned that an excessive increase might exacerbate the normal managerial problems encountered in establishing a new Federal agency. Regulatory Activities The principal justification cited by the agency for restoration of the $4 M (127 positions) of the original $9 M OMB cut in regulatory activities is the potential for these activities to impact the energy program beneficially in the near term. If required to take this reduction, NRC would stretch out reviews of additional, future standardized nuclear plants and predesignated sites expected in FY 1976 and delay expanded safety review and standards development efforts on the breeder reactor, private sector enrichment plants and FORD plutonium recycle. However, one-of-a-kind plants are now being delayed and cancelled by utilities and the breeder reactor, enrichment facilities and plutonium recycle have consistently slipped. Reactor Safety Research The primary justification cited by the agency for the reactor safety research program is to reduce the conservatism in current licensing of commercial reactor power plants and to improve plant availability. If required to take the original $8 M OMB cut, NRC would delay the completion of the LOFT project-- a $40 M facility which will demonstrate experi- mentally the operation of emergency core cooling systems in hypothetical accident situations. Although of limited real value, the LOFT program has high public visibility and its delay would be sharply attacked by nuclear critics and nuclear vendors. 3 New Responsibilities and NRC Superstructure Although the original OMB recommendation for the NRC super- structure and new responsibilities in environmental, safe- guards, and nuclear energy center siting research and studies has provided large increases, the agency has strongly urged that the OMB $7 M cut (129 positions) be fully restored. Mr. Anders has stated that the Act establishing his agency charges NRC with expanded tasks, and he is adamant that vigorous action on these new responsibilities be undertaken immediately. In support of this, the agency claims that these new functions received major attention during congres- sional consideration of the legislation establishing the NRC and that both nuclear power critics and proponents have been dissatisfied with past AEC performance in these areas. Conclusion On further consideration of Mr. Anders' views and the desirability of getting NRC off to a good start, we recommend a potential restoration of an additional $10 million and 73 positions in FY 1976. Otherwise, we believe that the Administration would be subject to attack in the Congress and by the public for failing to support adequately nuclear power safety and effective regulation. FORD LISBURY NUCLEAR REGULATORY COMMISSION 1976 Budget Summary Comparison of Agency Totals July 1- 1974 1975 1976 Sept. 30, 1976 1977 1978 1979 1980 Act. Req. Recom. Req. Recom. Req. Recom. Est. Est. Est. Est. Budget authority ($M) 108 162 155 243 225 63 52 214 218 221 231 Outlays ($M) 105 154 147 209 195 64 59 207 215 219 228 OMB planning ceiling (Not applicable to this agency. Agency established by Energy Reorganization Act of 1974.) End-of-period Employment: Full-time permanent 1538 2122 2056 2652 2339 2772 2339 2489 2639 2769 2869 Total 1655 2291 2215 2900 2515 3030 2515 2670 2820 2950 3050 GERALD Analysis of Changes FORD (dollars in millions) Budget authority Outlays LISAARY Request Recom. Request Recom. 1975 enacted 137 137 131 131 Supplementary/reprogramming request (establishment of new independent agency with expanded responsibilities) +25 +18 +23 +16 1975 agency req./OMB recom. Base 162 155 154 147 Full-year cost of new 1975 licensing, inspection activity and support +8 +8 +8 +8 Augmented inspection activity and standards development in FY 1976 +19 +9 +16 +8 Full-year cost of administrative and legal support for new independent agency +3 +3 +3 +3 Augmented environmental, safeguards and nuclear energy siting research and studies (NRC new responsibilities) +20 +22 +16 +19 Augmented reactor safety research and procurement of new scientific computer dedicated to program +41 +38 +22 +20 Non-recurring licensing fee refund -10 -10 -10 -10 1976 budget total 243 225 209 195 2 Budget authority Outlays Request Recom. Request Recom. Transition period budget total 52 59 Augmented reactor safety research, inspection activity and standards development with FY 1976 computer purchase delivered in FY 1977 -11 +12 1977 budget total 214 207 GENALD FORD ANVERY Nuclear Regulatory Commission Outlays (in millions of dollars) FY 1976 Agency Director's Agency Rev. OMB FY 1974 FY 1975 Req. Review Appeal Rec. Regulatory Activities 54 69 93 84 88 85 Reactor Safety Research 45 56 78 70 78 76 New Environmental, Safeguards and Nuclear Energy Siting Research and Studies - 3 25 20 25 21 New NRC Superstructure and Program Support 6 9 13 11 13 13 Licensing Fee Refund ! 10 - - - - Total Outlays 105 147 209 185 204 195 Personnel (1,538) (2,056) (2,652) (2,266) (2,522) (2,339) VORD Small Agencies THE WHITE HOUSE WASHINGTON MEMORANDUM FOR THE PRESIDENT FROM: ROY A. ASH SUBJECT: 1976 BUDGET DECISIONS: NATIONAL SCIENCE FOUNDATION The agency request and my recommendations, with respect to 1976 budget amounts, for the National Science Foundation (NSF) are presented in the tabulation attached (Tab A). Also attached (Tab B) is a short background paper on the responsibilities and programs of NSF. The OMB allowance for NSF in 1976 was $744 million in BA and $733 million in outlays. NSF appealed for total additional increase of $14.5 million (BA) : $11 million for science education, $3.0 million for institutional GERALD FORD LIBRARY support, and $0.5 million for program management. Based on discussions with NSF concerning its appeal, we would recommend an $0.5 million increase for program management. My major recommendations, in which NSF concurs, are: - For basic research project support, an increase of +$32 million (BA)--over $341 million in 1975--to sustain the current level of NSF sup- port, particularly in those scientific disci- plines which relate to long-term national growth (e.g., chemistry and materials research) and which have experienced declining support in mission agencies. - For national research centers and programs (i.e., Arctic and Antarctic programs, astronomy and oceanographic/atmospheric research), an increase of +$34 million (BA) -over $138 million in 1975--to offset increased costs already incurred and to purchase needed equip- ment and replacement aircraft ($18 million) for the U.S. Antarctic program. 2 - For the program of Research Applied to National Needs, a decrease of -$61 million (BA) from $135 million in 1975--reflecting the transfer of solar and geothermal energy R&D programs to the newly created ERDA. There is one unresolved issue for your consideration, as follows (detail at Tab C). Support for Science Education NSF has appealed for an $11 million restoration over the OMB recommendation of $54 million in obligations for sup- port of science education programs. FORD The $11 million recommended reduction from the 1975 level reflects OMB's view of the lower priority science educa- tion activities as compared with support of scientific research--and particularly those activities directed toward general science literacy at the primary and secondary school level. Thus, in a period of budgetary restraint, a reduction is recommended. While not disagreeing that some science education activities are of relatively lower priority among all its programs, NSF believes that Federal programs in science education are an effective vehicle for greatly improving educational methods and meeting selected educational needs. More important, the Congress is strongly supportive of science education and the NSF insists that unless this program is maintained at the 1975 level of support, the Congress will add funds at the expense of basic research support. Decision: Approve Agency Recommendation Approve OMB Recommendation See Me There is also one potential issue requiring further analysis and your agreement on the approach to be taken. 3 In addition to Dr. Stever's above appeal as head of the NSF, he (as Science Adviser) has written to you express- ing his concern about the current outlook for Federal R&D in the 1976 budget, namely that: - defense-related R&D is increasing by 14 percent (largely to meet increased development costs). - civilian programs are only increasing by 6 percent (less than potential cost increases). These trends are reflected in the following table: Obligations (current est. in $ billions) Percent 1974 1975 1976 Change 1030 Defense 9.0 9.6 10.9 14 Space 2.6 2.5 2.8 12 Civilian 6.3 7.0 7.4 6 Total 17.8 19.1 21.1 10 This is a reversal of trends over the period from 1969 through the 1975 budget (when civilian programs grew by 100 percent) and in Dr. Stever's opinion is "likely to be viewed with some alarm by the public if portrayed as reflecting a Presidential priority for defense expenditures at the expense of other national problems." Dr. Stever goes on to agree (as does OMB) that there is reason to slow the growth of civilian R&D since some pro- grams "have grown SO fast there is need for stock-taking in a tight budget year. " Beyond the ability to rationalize the slow down in civilian R&D growth, Dr. Stever does express his particular concern about steady erosion of Federal support for basic research which provides fundamental new knowledge for the future. 4 The current outlook for support of basic research in the 1976 budget is a 4 to 5 percent dollar growth (from $2.5 billion in 1975 to $2.6 billion in 1976) but over the years, since the peak of 1967, Dr. Stever points out that real (constant dollar) support of basic research will decline by 15 percent through 1976. As a result, Dr. Stever argues for a $110 million (BA) increase spread among several agencies for research on food and nutrition; physical sciences and engineering; climate research; and basic health-related research. Our current analysis indicates that in the context of mission agency priorities and budget constraints, such increases are generally not adequately justified. Furthermore, despite cutbacks in basic research support, there is no significant evidence that the U.S. competi- tive position in science has deteriorated. Thus, a further increase in funds for basic research in the FORD 1976 budget is deferable in a tight budget year. An alternative approach, should you desire to increase Federal support of basic research in FY 1976, would be to provide such an increase in the budget of the NSF. This would be in keeping with the Foundation's histori- cal--and publicly recognized--role in balancing the overall Federal effort in basic research. It would also demonstrate that, while nearer term civilian R&D pro- grams are being justifiably held back in 1976, this Administration is investing in the future through basic (relatively less expensive) research. If you wish to adopt this approach--and depending on final decisions affecting other agencies support of basic research--we will explore with Dr. Stever the possibility of a $50 to $100 million (BA) increase in the NSF budget for basic science ($20 to $40 million in outlays). Consider further increase in NSF budget for basic research Do not consider any further increase See Me National Science Foundation 1976 Budget Summary Data ($ in millions) Employment, end-of-period Budget Full-time Authority Outlays Permanent Total 1974 actual 579 * 652 1174 1352 1975 January Budget 788 675 1335 1695 enacted 768 670 XXXX XXXX outlay reduction -20 -10 XXXX XXXX OMB recommendation 748 660 1315 1675 1976 Planning Ceiling (excluding ERDA transfer) 740 733 XXXX XXXX agency request 901 828 1385 1745 OMB recommendation 744 733 1290 1650 agency recommendation 758 738 1290 1650 Transition period agency request 187 254 1385 1745 OMB recommendation 165 220 1290 1650 TAB A agency recommendation 165 220 1290 165 1977 OMB estimate 741 750 1290 1650 FORD *1974 Obligations were $646 million LIGRARY TAB B Background on NSF The National Science Foundation (NSF), established in 1950, is the Federal lead agency for the general support of the basic sciences through: -- award of project grants and contracts, largely to FORD universities and non-profit institutions, for basic research in all scientific disciplines (totaling $341 million in 1975). LIBRARY -- support of a number of national research programs and national centers, e.g., U. S. Antarctic and Arctic Programs, National Center for Atmospheric Research, four national astronomy centers, International Decade of Ocean Exploration (totaling $138 million in 1975). In 1975, NSF will provide about 20 percent of total Federal funding of basic science--an increase from 12 percent in 1968, reflecting, in part, decreased support of basic research by mission agencies--particularly DOD, NASA. In the immediate post-Sputnik era, NSF also initiated the buildup of resource development programs such as science education, graduate school development grants, and research traineeships--as did some mission agencies, particularly NIH. This program buildup was a part of the Federal response to the perceived national need: -- for more scientists and engineers beyond those produced by the normal demand of the market place. -- for more and stronger institutions for graduate education in all regions of the country. The resource development programs in NSF reached a peak of $225 million in 1968 and have been phased down to a level of $84 million in 1975 (largely for science education) --a level reflecting strong congressional support for such programs. NSF's responsibilities have been further expanded to include: -- in 1972, a program of Research Applied to National Needs (RANN) focusing research on selected national problems outside the pur- view of or cutting across responsibilities of mission agencies, e.g., solar energy and 2 crosscutting studies of independent regula- tory agencies (totaling $143 million in 1975 with $93 million for energy research). -- in 1973, science advisory and coordinating responsibilities formerly vested in the Office of Science and Technology (OST). These several NSF missions in basic research, science education, and policy planning make it a visible symbol to the Congress and the public of an Administration's support of basic science in the U. S. OMB strategy, since 1969, has been to review NSF resource alloca- tions, in light of overall Federal research funding, to: -- ensure the vitality and competitiveness of a strong U.S. research base. OMB has used the NSF budget partially to offset the effects of reductions in mission agencies (e.g., DOD reductions in radio and optical astronomy) and to ensure reasonable balance and stability in Federal support of basic research. FORD LIBRAR, -- encourage basic research programs that can provide a more adequate scientific base for the understanding and long-term solution of problems of society and the economy, e.g., energy, environment. -- provide limited support for specific problem- focused basic and applied research through the stage of feasibility testing--not other- wise provided for by mission agencies (e.g., solar energy, much of which is now to be transferred to ERDA). TAB C Issue Paper National Science Foundation FORD Science Education Program AIBRARY Statement of the Issue What should be the level of the NSF Science Education Program in 1976? Background In the post-Sputnik era, the NSF science education pro- grams--along with graduate traineeship and academic insti- tutional development grant programs--were initiated to meet the perceived need for additional and more capable scientists and institutions for graduate training. By the late 1960's, the U.S. had developed an adequate supply of scientific and technical manpower and sufficient institutional capability and, thus, these programs have been phased back. Because of strong congressional support (e.g., constituency ranges from primary and secondary schools through graduate schools), the NSF program has leveled off to between $60 and $70 million since 1973. To better utilize this reduced funding, in light of the needs of the 1970's, program objectives have been redefined and are: 1. To assure that the U.S. has an appropriate level and mix of scientific and technical manpower with greater participation by women and minorities. 2. To improve the understanding of science among a broad range of students at various educational levels (i.e., science literacy). 3. To increase the effectiveness of science educa- tion through technological, instructional and organizational changes. Analysis The current situation, with respect to NSF's appeal, is as follows (including $4 million deferred from 1975) : 2 $ in millions) Obligations Outlays NSF 1975 Program level 61 64 NSF 1976 Recommendation 65 63 OMB 1976 Recommendation 54 60 NSF Recommendation NSF believes that since its program objectives were redefined at the instigation of OMB, there exists a commitment to main- tain the 1976 funding level. In addition, although the main job of building academic institutions has been achieved, NSF believes that a science education program can achieve consid- erable leverage as a way of stimulating improvement in the educational system and of meeting selected needs as they arise. Dr. Stever insists that he must have a program level in 1976 at the appropriated level of 1975 ($65 million) to mollify the strong Congressional pressure. OMB Recommendation In the view of OMB, the Federal role in many aspects of objective 2 (i.e. increasing general science literacy) and objective 3 (i.e. improving educational effectiveness) is more appropriately addressed in the context of the total educational process than just in science programs. FORD LIBRARY COUNCIL ON ENVIRONMENTAL QUALITY COMMENTS See attached discussion paper Full-time Budget permanent authority outlays employment (in thousands of dollars) 1974 actual 2,466 2,603 44 1975 current estimate 2,500 2,500 50 1976 agency request 3,000 3,000 50 1976 OMB recommendation 2,700 2,700 50 1976 agency recommendation 2,800 2,800 50 Effect of OMB recommendation on agency request -300 -300 -- Transition period 675 675 50 1977 estimate 2,700 2,700 50 DISCUSSION OF RECOMMENDATIONS CEQ is requesting an increase of $500 K to cover the full-year cost of the pay raise, the increased costs of other administrative services, and to restore the amount available for contract studies to roughly the 1973 level. CEQ points out that if the total appropriation for the agency is held to the 1975 level of $2.5 M, the necessity of absorbing uncontrollable costs such as statutory salary increases and GSA space reimbursements would leave only $300 K for the contract study program, compared to $400 K available for this purpose in 1975 and $700 K in 1974. With respect to the level of funding for contract studies, OMB had recommended adding enough to the appropriation to keep the program at the current (1975) level of roughly $400 K. This would require an increase in the agency's budget from $2.5 M to $2.6 M in FY 1976. CEQ objected and insists that a minimum of $2.8 M is essential; it wants a $600 K contract level in FY 1976. OMB discussed a compromise of $2.7 M (giving a contract studies level of $500 K) but CEQ still believes $2.8 M is necessary. The requested increase also would provide an additional amount of $30 K for support of the Citizen's Advisory Council on Environmental Quality. Past practice has been for CEQ and the American Conservation Association to contribute $50 K and $100 K respectively. The proposal for 1976 is for CEQ and ACA to contribute $80 K apiece. OMB recommends against increasing the Federal share. This Council is under consideration for extension which OMB also recommends against because it has served its purpose. If the Council is not extended, OMB recommends that these funds be used for contract studies. This Council has been given financial support by the Rockefeller family. CEQ has ten ungraded positions authorized in its substantive legislation. The average salary in 1976 for these ten positions is $33 K. OMB believes that this rate is becoming very high and recommends advising the agency to start phasing these positions into the regular GS series. Part of CEQ's appropriation authorization expires this year and an extension will be needed for 1976 and 1977. OMB believes that the provision authorizing the ungraded positions should be repealed when the Act is extended. Decision: Approve agency recommendation ($2.8 M; $80 K for Advisory Council) Approve OMB recommendation ($2.7 M; $50 K for Advisory Council) FEDERAL ENERGY ADMINISTRATION A summary of the agency request and OMB recommendation is included in the discussion which follows. FORD LIBRARY is - Federal Energy Administration Original OMB revised Est. FEA req. OMB recom. FEA appeal recom. 1975 1976 1976 1976 1976 BA ($M) 124.8 146.9 100.6 127.8 (+27.2) 110.1 (+9.5) positions 3050 1951 1609 1802 (+193) 1715 (+106) FEA request/OMB recommendation OMB's original recommendation was $46.3M less than requested by the FEA. This reduction was accomplished by: -- holding FY76 contract funds level with FY75 ($46.5M as opposed to $77.3M request) ; and, -- agreeing to FEA's reduction in fuel allocation program personnel, but not agreeing to replace them with as many personnel in the areas of energy resource develop- ment, policy and analysis, and administrative overhead. FEA appeal/OMB revised recommendation FEA appealed for an increase of $8.3M for 193 additional positions, and for $18.9M in contract funds. OMB recommends an increase in its original recommendation of $3.2M for 106 additional positions, and $6.3 for contracts, all of which would provide FEA with the necessary flexibility to carry out high priority energy initiatives. FEA has agreed to this revised recommendation, which increases FEA's FY75 budget authority to $110.1M. FORD LIBRARY it 2 Federal Energy Administration Budget authority Outlays Employment ($1000) ($1000) (FTP/Total) 1975 current estimate 124,835 118,343 3,050 1976 agency request 146,965 175,425 1,951 OMB recom. 100,600 129,160 1,609 agency reclama. 127,775 - 1,802 OMB rev. recom. 110,050 138,510 1,715 Transition period agency request 36,681 38,490 1,951 OMB recom. 25,150 27,960 1,609 OMB rev. recom. 27,500 30,310 1,715 1977 estimate 110,050 126,765 1,715 1/ adjusted to account for increase in OMB revised recommendation for FY 1976. FORD TENNESSEE VALLEY AUTHORITY Comments OMB recommendation would provide for continuing ongoing construc- tion at the same level as FY 1975, consistent with other water resources programs. It further allows for a $5B increase in the debt ceiling on outstanding bonds-power program. FORD New water construction starts are now under consideration by the President. Full-time Budget permanent authority Outlays employment (in thousands of dollars) 1974 actual 45,700 401,100 14,001 1975 current estimate 77,400 800,000 14,082 1976 agency request 20,119,000 950,000 16,050 1976 OMB recommendation 5,087,800 929,200 15,100 Effect of OMB recom- mendation on agency request -15,031,200 -20,800 -950 Transition period 25,100 220,000 15,100 1977 estimate 100,000 213,900 16,500 FEDERAL POWER COMMISSION A summary of agency request and OMB recommendation is included in the discussion of unresolved issues which follows. GERALO FORD ) FEDERAL POWER COMMISSION Original FPC Est. FPC 1976 Original 1976 OMB revised 1975 Request OMB recom. Appeal recom. BA 33.2 47.3 35.5 37.5 (+2.0) 36.0 (+.5) Positions 1320 1693 1398 1398 1398 Issue In view of FPC's appeal, should OMB's fiscal year 1976 recom- mendation of $35.5M for FPC be revised? Background OMB originally recommended an increase of $2.3M and 78 positions over FY 1975 for FPC, based on detailed analysis of historical and projected workload. FPC agreed to OMB's increase of 78 positions, but has appealed for restoration of $2.0M for salaries and other overhead expenses. OMB offered to increase its original recommendation by $.7M, on the grounds that $.4 to $.7M could be justified to give FPC added flexibility to cover unpredictable future overhead costs. FPC did not agree, indicating it could settle for no less than the full $2.0M increase. Alternatives #1 +2.0M increase (FPC position) GERALD FORD LIBRARY #2 +0.5M increase (Revised OMB recommendation) #3 no addition (Original OMB recommendation) Analysis FPC estimates of the percentage of authorized positions filled over the entire year of FY 1976 are too high based on past experience in FPC and comparable Federal agencies. This unwarranted assumption accounts for nearly half of the appeal ($.8M). The $1.2M remainder of FPC's appeal is to cover estimated additional costs for space rental, supplies, travel, and 2 automated data processing. Because of uncertainty over rapidly rising costs for space rental and supplies, the request for a $.5M increase in these areas is justified. However, the requested increase of $.7M for travel and automated data processing is not justified because basic planning factors such as the number of employees or general level of program activity are not increasing significantly. Recommendation Alternative #2 - increase of $.5M. Although the $1.5M increase not recommended might seem to be a small amount, including it in FPC's FY 1976 budget will raise the base from which FPC will expect future increases. FORD LIGRATT FEDERAL POWER COMMISSION Budget Full-Time Authority Outlays Permanent (in thousands of $) Employment 1975 current estimate 33,163 36,803 1320 1976 agency request 47,306 46,531 1693 OMB recom. 35,436 35,210 1398 agency appeal 37,458 37,225 1398 OMB revised recom. 35,976 35,740 1398 unresolved difference (1,482) (1,485) (none) Transition period agency request 10,858 10,897 1693 OMB recom. 8,150 8,098 1398 agency appeal 9,623 9,573 1398 OMB revised recom. 8,634 8,578 1398 unresolved difference (989) (995) (none) 1977 estimate 35,976 35,740 1398 FORD LEYER FEDERAL METAL AND NONMETALLIC MINE SAFETY BOARD OF REVIEW FORD it LIBRARY GENALD Comments No change from agency request. Full-time Budget permanent authority Outlays employment (in thousands of dollars) 1974 actual 60 39 2 1975 current estimate 60 58 2 1976 agency request 60 60 2 1976 OMB recommendation 60 60 2 Effect of OMB recom- mendation on agency request -- -- -- Transition period 15 15 2 1977 estimate -- : -- INDIAN CLAIMS COMMISSION Comments No change from agency request. Full-time Budget permanent authority Outlays employment (in thousands of dollars) 1974 actual 1,164 1,161 39 1975 current estimate 1,324 1,324 42 1976 agency request 1,400 1,400 42 1976 OMB recommendation 1,400 1,400 42 Effect of OMB recom- mendation on agency request -- -- -- Transition period 350 350 42 1977 estimate 934 934 42 NATIONAL GALLERY OF ART FORD LIBRANT Comments OMB recommendation would: - continue basic operations of the National Gallery of Art - begin staffing new East building and conservation laboratory. Agency is unlikely to appeal. Full-time Budget permanent authority Outlays employment (in thousands of dollars) 1974 actual 6,237 5,973 377 1975 current estimate 6,933 7,060 389 1976 agency request 7,896 7,862 428 1976 OMB recommendation 7,598 7,564 410 Effect of OMB recom- mendation on agency request -298 -298 -18 Transition period 1,946 2,176 410 1977 estimate 7,798 7,798 434 SMITHSONIAN INSTITUTION Comments OMB recommendation would: - strength visitor services and maintenance of collection - meet major Bicentennial commitments - continue the upgrading of the National Zoo. Agency is unlikely to appeal. Full-time Budget permanent authority Outlays employment (in thousands of dollars) 1974 actual 69,600 77,500 2,646 1975 current estimate 85,600 100,000 3,018 1976 agency request 122,100 114,500 3,347 1976 OMB recommendation 94,300 100,000 3,168 Effect of OMB recom- mendation on agency request -27,800 14,500 -179 Transition period 25,000 31,000 3,168 1977 estimate 96,300 100,000 3,188

nara / coll_grf-0010 / doc

FY 1976 - 12/17/74 - FEA, ERDA, Small Agencies

ID: 1554466
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id	1554466
sourceUrl	https://catalog.archives.gov/id/1554466
contentType	document
collections	White House Special Files Unit Files Budget Review Decision Papers
subjects	Israel Vietnam (Republic) Federal Energy Administration. (6/27/1974 - 10/1/1977) Energy Research and Development Administration. 1/19/1975-10/1/1977 Export-Import Bank of the United States. 3/13/1968- Federal budget Foreign aid
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url	https://catalog.archives.gov/id/1554466
naId	1554466
coverageEndDate	logicalDate 1974-12-31 month 12 year 1974
coverageStartDate	logicalDate 1974-12-01 month 12 year 1974
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recordType	description
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