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FY 1977 - 09/18/75 - Budget Reduction Proposals (3)
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FY 1977 - 09/18/75 - Budget Reduction Proposals (3)
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The original documents are located in Box 9, folder "FY 1977 - 9/18/75, Budget Reduction Proposals (3)" 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 Gerald Ford donated to the United States of America his copyrights in all of his unpublished writings in National Archives collections.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 9 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library JUSTICE DEPARTMENT OF JUSTICE 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Federal Bureau of Investigation 468 -0- 468 -7 461 Immigration and Naturalization Service 218 -0- 218 -9 209 Federal Prison System 297 297 -53 244 LEAA 900 -0- 900 -13 887 Drug Enforcement Administration 159 -0- 159 -6 153 Legal Activities and General Administration 272 -0- 272 -12 260 All Other -5 -0- -5 -0- -5 (Personnel reductions) (-18) * Total 2,309 -0- 2,309 -100 2,209 *Personnel reductions included in suggested reductions for each bureau above. GERALD P. FORD SUMMARY OF OUTLAY REDUCTIONS DEPARTMENT OF JUSTICE (dollars in millions) Effect on outlays in 1976 1977 1978 A. 1977 Planning guidance XXX XXX Adjustments: XXX XXX Current estimate 2,253 2,309 XXX B. Suggested program reductions: Operations (non-personnel costs) and New Prison Construction -6 -82 -20 C. Personnel Reductions -18 -18 Total suggested reduction -6 -100 -38 Revised 1977 planning guidance and related 1976 amount 2,247 2,209 XXX GERALD FORD AUVURIT 1977 Outlay Reductions (Part II) Department of Justice (dollars in millions) Date: 8/20/75 appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 1,120 1,253 1,178 1,291 XXX 1,244 OMB recommendation 1,097 1,247 1,087 1,209 XXX 1,224 Suggested reduction -23 -6 -91 -82 XXX -20 Actions required: Defer new prison construction planned in 1976 and 1977 and require absorption of cost increases expected throughout the Department in 1977. Program impact: Since both Houses of Congress have denied the Administration's request for new prison construction in actions on the 1976 appropriation, deferral of new construction for another year will further delay plans to relieve present prison overcrowding. This program is presently under review. Ab- sorption of cost increases expected in 1977 will require a combination of reductions in non- personnel activities (equipment, travel, communications) and selective personnel reductions (in the range of 2-3 percent below 1976). Other considerations: These recommendations assume LEAA grant programs will be held constant in 1977 and that the juvenile delinquency program will not be expanded. It is further assumed that actions will be taken to avoid the $92 million increase added by the Senate to LEAA's 1976 budget. If the increases occur, outlay estimates shown above will increase by $20M and $56M in 1976 and 1977 respectively. LABOR LIBRARY FORD GERALD DEPARTMENT OF LABOR 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Uncontrollable programs Unemployment Insurance 16,454 -900 15,554 15,554 Federal Unemployment Benefits 1,130 +670 1,800 1,800 Workers Compensation 374 374 374 All Other -1 -1 -1 Controllable programs Work Incentive program 315 315 - 200 115 Comprehensive Manpower Assistance 2,540 +455 2,995 - 455 2,540 Temporary Employment Assistance XXX +2,250 2,250 -1,125 1,125 Emergency Employment Assistance XXX XXX XXX XXX XXX Grants to States for UIS and ES 1,087 1,087 1,087 Occupational Safety and Health 116 116 116 All Other 312 312 312 Employment reduction XXX XXX - 3 -3 Secondary economic effect of reductions (uncontrollable programs) +1,000 +1,000 Total 22,326 2,475 24,801 -783 24,018 9/5/75 savenit GERALD FORD 9-5-75 Summary of Outlay R actions (Part I) Department of Labor (dollars in millions) Effect on Outlays in: 1976 1977 1978 Change A. 1977 planning guidance and related 1976 amount XXX 22,326 XXX Adjustments: A. Re-estimates of base Unemployment Trust Fund -1,500 Special Unemployment Assistance +170 B. Assumed extension of emergency programs* Public service employment +2,250 Summer youth employment +455 Supplemental UI (weeks 40-65) +600 Special Unemployment Assistance +500 Subtotal 2,475 XXX Current estimate 26,072 24,801 GERALD i. FORD 2 (dollars in millions) Effect on Outlays in: 1976 1977 1978 Change B. Suggested program reductions: Work incentive program: Current estimate 350 315 315 OMB recommendation 350 115 0 Suggested reduction 0 -200 -315 Public Service Employment:* Current estimate 2,180 2,250 2,250 OMB recommendation 2,180 1,125 0 Suggested reduction 0 -1,125 -2,250 Summer Youth Employment:* Current estimate 455 455 455 OMB recommendation 398 0 0 Suggested reduction -57 -455 -455 -3 -3 Employment reduction P. Secondary economic effect of suggested reductions in this ONO! exercise (increased outlays for unemployment benefits) +1,000 Total suggested reduction -57 -783 -3,023 Revised planning guidance 26,015 24,018 XXX * The 1977 planning ceiling includes no allowance for continuation, restructuring, or orderly phasing out of the DOL programs enacted in response to the rapid rise in unemployment, pending receipt of proposals from DOL. Since current assumptions show the unemployment rate exceeding 6.8% through fiscal 1978, it is unrealistic to assume that these programs will be abruptly terminated on the expiration dates now in law. Therefore, for the purposes of this exercise, the 1977 ceiling has been adjusted to show contin- uation of the present levels in employment programs and of present law in the temporary unemployment compensation programs. 9-5-75 1977 Outlay Reductions Department of Labor The table on the preceeding page shows that there are two major controllable programs for which reductions are not proposed. A. Comprehensive Manpower Assistance. The principle programs within this account are Job Corps (175 million), CETA State local programs (2 billion). Job Corps has high unit costs ($8500/man year) but seeks to serve those with greatest need. Reduction attempts since 1969 have involved intense political counterpressure; a handful of camps at $3-5 million each might be suggested for closing as poorest performers, but a large effort on cost savings grounds has little likelihood of success; there have been no recent rigorous evaluations but one is planned; CETA programs have only been underway one year. The appropriation level is arbitrary; there is no programmatic rationale available to justify a lower figure. A broad scale evaluation is in process but the nature of the program goals (increased earnings over time) dictates that results will not be available for two years at the earliest. B. Grants to States for Unemployment Insurance and Employment Services. A reduction in the ceiling in this area is not feasible. First, the amount included for unemployment insurance services does not cover the added workload that will result from the continuation of the emergency programs. Second, the amount included for employment services is regarded as a low estimate, since it does not take into account llouse action (and apparent Senate intentions to concur) in increasing this item in FY 1976 by some $68 million above the President's request. The "All other" line consists of the salaries and expense accounts for the Department, which would be reduced marginally by the employment reduction. Reduction in the uncontrollable programs are not proposed because of the recent Presidential proposals to increase Unemployment Insurance benefits outlays. The Special Benefit account pays workers' compensation to Federal employees hurt on the job, as well as to longshore and harbor workers and current "Black Lung" victims for whom no responsible employer can be found. Attachment B 1977 Outlay Reductions (Part II) WIN (dollars in millions) Date: September 5, 1975 / X / appropriation request deferral action / / other administration action / / rescission action / X / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 400 350 315 315 XXX 315 OMB recommendation 400 350 0 115 XXX 0 Suggested reduction 0 0 315 200 XXX 315 Actions required: Legislation required to repeal WIN law. Program impact: There is little evidence to date showing that the WIN program has any impact on the movement of AFDC recipients into the labor market. A major study to assess the program's impact in this area is underway. Results will not be available until January 1976. Termination of this program will most likely not cause an increase of employables on welfare. Such action would result in a reduction of somewhat more than 11,000 worker-years in training and public service jobs in 1977, 23,000 in 1978. Other consideration: Last year the President rejected termination of the program, as such action would be interpreted as placing undue hardship on families during a time of high unemployment. The President decided in June to alter the WIN program by placing emphasis on work test rather than on training. Legislation effecting such a change has not yet been drafted. Attachment B 1977 Outlay Reduct. (Part II) Department of Labor Temporary Employment Assistance (Public Service Employment, CETA Title VI) (dollars in millions) Date: September 5, 1975 / X / appropriation request / / deferral action / other administration action / / rescission action / X / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate o 2180 2250 2250 XXX 2250 OMB recommendation 0 2180 1125 1125 XXX 0 Suggested reduction 0 o 1125 1125 XXX 2250 Actions required: No estimate for FY 77 for TEA was included in the planning ceiling to allow Secretary Dunlop maximum flexibility in making his recommendations. For the purposes of this exercise we have increased the '77 ceiling to include a continuation of the '76 program level thru '77. Achieving the proposed phase down requires a new authorization for TEA for FY 77 (and TQ) and an appropriation request. Program impact: Phase Title VI enrollments down from peak of about 255,000 to zero by the end of FY 77; the reduction would not effect about 50,000 additional jobs financed from CETA Title II. Other consideration: Ability to achieve the reduction depends on continued improvement in the economy. Current Troika assumptions indicate that the unemployment rate will be 7.5% or higher throughout FY 1977, and 6.8% or higher throughout FY 1978. Congressional debate on this program keys heavily on unemployment rate. CERAL Attachment B 1977 Outlay Reduction (Part II) Department of Labor Summer Youth Employment Program (dollars in millions) Date: September 5, 1975 / / appropriation request deferral action / other administration action rescission action / substantive legislation other congressional action 1975 1976 TQ 1977 1978 Out- Out- Out- Out- Out- BA lays BA lays lays BA lays BA lays Amount: Current estimate 455 57 455 455 398 455 455 XXX 455 OMB recommendation 455 57 0 398 0 0 0 XXX 0 Suggested reduction 0 0 455 57 398 455 455 XXX 455 Actions required: No estimate for FY 77 Summer Youth was included in the planning ceiling to allow Secretary Dunlop maximum flexibility in making his recommendations. For the purpose of this exercise, we have increased the ceiling to reflect continuation in the TQ and in 77 of the 76 level. Achieving this reduction requires taking no action. Program impact: 8,40,000 youth do not get Federally subsidized jobs unless States and localities use CETA Title I funds. Other considerations: Senator Javits, League of Cities, et al will resist. They have been successful in obtaining a summer appropriation each year. Current Troika assumptions indicate that the unemployment rate will be 7.5% or higher throughout FY 1977, and 6.8% or higher throughout FY 1978. Congressional debate on this program keys heavily on unemployment rate. STATE DEPARTMENT OF STATE 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Educational exchange 66 - 66 -22 44 International narcotics control 45 - 45 -10 35 Foreign buildings 43 - 43 - 8 35 Salaries and expenses 529 - 529 -10 519 Allowance for Soviet refugee assistance - 20 20 - 20 Employment reduction - 4 -4 All Other 451 - 451 451 Total 1,134 20 1,154 -54 1,100 CAPALD SUMMARY OF OUTLAY REDUCTIONS Department of State (dollars in millions) Effect on outlays in 1976 1977 1978 A. 1977 Planning guidance XXX 1,134 XXX Adjustments: None Soviet refugee amendment XXX 20 XXX - XXX Current estimate 1,222 1,154 XXX B. Suggested program reductions: Educational exchange: Current estimate 59 66 71 OMB recommendation 48 44 59 Suggested reduction -11 -22 -12 International narcotics control: Current estimate 30 45 48 OMB recommendation 27 35 41 Suggested reduction - 3 -10 - 7 Foreign buildings: Current estimate 42 43 64 OMB recommendation 42 35 64 Suggested reduction - - 8 - Salaries and expenses: Current estimate 418 529 574 OMB recommendation 418 519 573 Suggested reduction - -10 - 1 C. Employment reduction - - 4 - 4 Total suggested reduction -14 -54 -24 Revised 1977 planning guidance and related 1976 amount 1,208 1,100 XXX 1977 Outlay Reductions (Part II) Department of State: Educational Exchange (dollars in millions) Date: September 5, 1975 / X/ appropriation request in 1977 / / deferral action / / other administration action / X/ rescission action in 1976 / / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 65 59 70 66 XXX 71 OMB recommendation 45 48 45 44 XXX 59 Suggested reduction 20 11 25 22 XXX 12 Actions required: Hold 1976-8 program to $45M (15% below 1975 BA level of $53M) Program impact: Because overseas inflation increases program costs by about 10% each year, this cutback would produce effective reductions in program levels of 25% in 1976 and a further 10% in 1977. Would reduce sharply the number of private organizations receiving support monies and curtail planned cultural presentations and educational exchanges. The number and mix of these cuts is impossible to predict. Other consideration: The State Department would object strongly. The academic community would oppose any such change. 1977 Outlay RE. Icions (Part II) Department of State: International narcotics control (dollars in millions) Date: August 21, 1975 X appropriation request in 1977 / deferral action / / other administration action XX rescission action in 1976 / substantive legislation / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 42 30 42 45 XXX 48 OMB recommendation 32 27 32 35 XXX 41 Suggested reduction 10 3 10 10 XXX 7 Actions required: Hold 1976-8 program to 1975 obligational level of $32M. Program impact: In 1976, State planned programs in over 15 foreign countries. Cut would limit activities to the funding of major equipment programs in priority areas, specifically Burma, Mexico and Thailand; and would significantly reduce the U.S. contribution to UN drug control activities. Program flexibility would be severely curtailed. Other considerations: A $10M cutback would be consistent with past Congressional action and expressed concern over the size of this program. 1977 Outlay Rt cions (Part II) Department of State: Foreign Buildings (dollars in millions) Date: August 21, 1975 /X/ X appropriation request deferral action / other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 30 42 49 43 XXX 64 OMB recommendation 30 42 41 35 XXX 64 Suggested reduction 8 8 XXX Actions required: Defer 1977 acquisitions of office and housing facilities. Procram impact: Would defer for a year purchases of about 25 high priority buildings for use as residences or small offices, mostly in hardship areas. Would allow $16M construction program to proceed. Other considerations: Deferral would result in cost increases of 10-20% when properties are purchased a year later. Congressman Wayne Hays, Chairman of Subcommittee overseeing this program, probably would object. Agency administrators would view this reduction as less serious than those proposed for "S&E." 1977 Outlay Reductions (Part II) Department of State: Salaries and Expenses (dollars in millions) Date: September 5, 1975 / X/ appropriation request / / deferral action / / other administration action / / rescission action / / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 429 418 543 529 XXX 574 OMB recommendation 429 418 532 519 XXX 573 Suggested reduction - - 11 10 XXX 1 Actions required: Delete $11M of $15M in discretionary increases over 1976. Program impact: Would allow only $4M to meet critical new discretionary requirements. Would postpone for a year the first increment ($5M) of passport mechanization project. Whether this would have serious consequences later depends on whether American travel abroad resumes its upward trend. Other consideration: No political or public reaction likely. Some, but not serious, effect on Foreign morale. TRANSPORTATION Department of Transportation 1977 OUTLAY REDUCTIONS ($ in millions) Revised Planning Current Suggested Planning Program Guidance Adjustments Estimate Reductions Guidance Coast Guard 1074 1074 1074 Federal Aviation Administration 2365 2365 2365 Federal Highway Administration 6290 +700 6990 6990 National Highway Traffic 160 160 160 Safety Administration Federal Railroad Administration 589 589 589 Urban Mass Transportation Admin. 1800 1800 -225 1575 All Other -28 -28 -28 Employment Reductions -5 -5 12,250 +700 12,950 -230 12,720 Receipt Highway Trust Fund (Existing Taxes) 4,900 - 4,900 1,000 5,900 Aviation Trust Fund 1,050 - 1,050 I 1,050 Freight User Charges - - I 1,000 1,000 5,950 - 5,950 2,000 7,950 Summary of Outlay Reductions Department of Transportation (Dollars in millions) Effect on outlays in 1976 1977 1978 A. 1977 Planning guidance 12,250 XXX Adjustments for Federal-Aid Highway Program 700 Current estimate 12,075 12,950 XXX B. Suggested program reductions: Urban Mass Transit Current estimate 1,075 1,800 OMB recommendation 1,075 1,575 Suggested reduction I -225 -225 C. Suggested Employment Reductions - - 5 - 5 Total suggested reduction - -230 -230 Revised planning guidance 12,075 12,720 XXX D. Suggested revenue increases: Effect on receipts Highway Trust Fund Receipts Current estimate 5,839 4,900 OMB recommendation 5,839 5,900 Suggested increase - 1,000 - Freight User Charges Current estimate - - OMB recommendation - 1,000 Suggested increase - 1,000 1,000 Total suggested Revenue Increases - 2,000 1,000 1977 Outluy Reductions Department of Transportation/Urban Mass Transit Administration (dollars in millions) Date: August 19, 1975 / / appropriation request / / deferral action / / other administration action / / rescission action /x/ substantive legislation / / other congressional action 1976 1977 1978 PL Outlays PL Outlays BA Outlays Amount: Current estimate 2,312 1,075 2,700 1,800 XXX 2,400 OMB recommendation 2,312 1,075 2,700 1,575 XXX 2,175 Suggested reduction - - - 225 XXX 225 Actions required: Legislation to limit the amount of formula grant funds that can be used for transit operating expenses to 50% of localities' formula grant assistance. (an amendment to the Urban Mass Transportation Act). Program impact: Preliminary estimates indicate that about 90% of formula grant assistance will be used by localities for operating expenses with the remaining 10% used for capital improvements. This amendment would reduce the level of fast outlaying operating assistance and force cities to use additional formula funds for capital improvements. This would reduce pressures to increase the discretionary capital assistance program (since additional capital improvements would be funded from the formula program). Other considerations: Would force cities to contribute more operating assistance for transit from their general budget, increase transit fares, or reduce transit service. Would be very difficult to achieve. TREASURY s DEPARTMENT OF THE TREASURY 1977 OUTLAY REDUCTIONS (dollars in millions) Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Interest on the Public Debt 40,500 +6,000 46,500 -1,000 45,500 Revenue Sharing 6,539 - 6,539 - 6,539 Offsetting Receipts -2,278 - -2,278 - -2,278 Earned income credit - +1,200 1,200 I 1,200 Miscellaneous Permanent (Uncontrollable) Accounts 1,018 - 1,018 - 1,018 Operating Accounts Total: (2,610) (+25) (2,635) (-168) (2,467) Other operating accounts 804 +12 816 -117 699 Personnel reductions* 1,806 +13 1,819 - 51 1,768 Total 48,389 +7,225 55,614 -1,168 54,446 *Personnel reductions also included in previous cutback exercise; cutback holds Treasury to 1976 personnel level. SUMMARY OF OUTLAY REDUCTIONS DEPARTMENT OF THE TREASURY (dollars in millions) Effect on outlays in 1976 1977 1978 A. 1977 Planning guidance XXX 48,389 XXX Adjustments: Interest on the Public Debt +6,000 Married income credit +1,200 Proposed ATF amendment +17 Congressional changes -12 Reestimates XXX +20 +7,225 XXX Current estimate 45,392 55,614 XXX B. Suggested program reductions: Interest on the public debt -- -1,000 -- Operating (non-personnel costs only) and construction programs -- -117 -22 C. Personnel reductions (in Operating Programs) : -51 -51 Total suggested reduction -- -1,168 -73 Revised 1977 planning guidance and related 1976 amount 45,392 54,446 XXX GERALD P. FORD 1977 Outlay Reductions (Part II) Department of the Treasury/Operating (nonppersonnel costs only) and Construction Programs (dollars in millions) Date: September 5, 1975 X appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 691 692 804 816 XXX 859 OMB recommendation 691 692 688 699 XXX 837 Suggested reduction - - -116 -117 XXX -22 Actions required: Require Treasury operating programs to function in 1977 with the same amount of outlays provided in 1976 - eliminates program expansion and cost increases anticipated in 1977; defer all new construction planned to begin in 1977 except Law Enforcement Training Center. Program impact: The absorption of anticipated cost increases will result in program levels below 1976; Treasury would absorb the cost increases by reducing non-personnel activities (travel, printing, space); some reduction in personnel would probably also occur in a reduction of this magnitude, resulting in fewer audits and investigations in the revenue producing and law enforcement bureaus. Other consideration: Treasury will maintain that any reductions in personnel or non-personnel costs will disrupt their revenue collection and law enforcement programs, and would likely result in revenue losses more than offsetting any outlay saving. 1977 Outlay Reductions Interest on the Public Debt (dollars in millions) 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 37,800 37,800 46,500 46,500 XXX XXX OMB recommendation 37,800 37,800 45,500 45,500 XXX XXX Suggested reduction - -- 1,000 1,000 -- -- Actions required: This reduction is consistent with a constrained deficit of $20 billion in 1977 compared to the current unconstrained deficit of approximately $50 billion. Increases in the deficit (and consequent borrowing) will reduce the amount of savings that can be achieved. ERDA ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION 1977 OUTLAY REDUCTIONS (dollars in millions) Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Energy: Nuclear 1025 1025 1025 Non-Nuclear 813 813 -30 783 Defense 1760 1760 1760 Uranium Enrichment 1205 1205 1205 Research, safety, and waste management 642 642 642 Program support and other 289 289 289 Revenues - 664 - 664 - 664 Total 5070 5070 -30 5040 GENALD z. FORD 9/5/75 (2V9917 SUMMARY OF OUTLAY REDUCTIONS ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION (dollars in millions) Effect on Outlays in 1976 1977 1978 A. 1977 Planning Guidance XXX 5,070 XXX Adjustments: Current estimate XXX XXX B. Suggested Program Reductions: Energy - other than nuclear and fossil: Current Estimate 186 222 183 OMB Recommendation 186 192 183 Suggested reduction -30 Proposed Federal Alternative Energy Development Tax: Suggested Revenue Increase (4,300) (4,300) 5 Total Suggested Reduction (Receipts would go directly -30 into the Treasury) Revised 1977 Planning Guidance and related 1976 amount 4,059 5,040 XXX In the case of ERDA, no significant reduction is considered possible in its 1977 planning ceiling because of the key importance of its programs to carrying out long-term Administration policies in energy and because the current planning allowance is already probably understated. Therefore, aside from some limited programmatically justifiable reductions in non-nuclear research (other than fossil fuel), as described in the attached material - it is recommended that - in lieu of reduction - a 1 cent per gallon tax or its equivalent be imposed on all sales of oil and gas. This tax is further described in the attached material. 1977 Outlay Reductions (Part II) ERDA/Energy R&D Other Than Nuclear and Fossil (dollars in millions) Date: September 5, 1975 appropriation request deferral action other administrative action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 235 186 266 222 XXX 183 OMB recommendation 235 186 232 192 XXX 183 Suggested reduction -34 -30 XXX Actions required: Reduce growth in ERDA's non-nuclear, non-fossil energy R&D programs (solar, geothermal, advanced energy systems -- primarily Magnetohydrodynamics (MHD) and conservation--which includes buildings, industrial processes, energy storage, energy transmission, and some energy conversion technology) by $30M in outlays. Allow minor increase in solar and geothermal associated with on-going projects, no new starts or new initiatives in conservation, and reduce the MHD program. Program impact: The overall impact of this reduction is to slow the growth in R&D in the lower impact and less urgent alternative energy sources (e.g., bioconversion, wind energy, etc.). Solar R&D would continue to be restricted to small component work. Geothermal field test experiments would be deferred. Completion dates for MHD component research and initiation of construction of an MHD test facility would be deferred. Completion dates for projects in transportation, energy storage, and transmission/distribution would be deferred. Projects which would move research out of the paper analysis into the benchscale hardware phase (e.g., new storage concepts) would be postponed. 2 Other considerations: With the exception of MHD, all of these programs appear to have broad public and congressional support (although support for geothermal R&D is primarily restricted to individuals from western states). The agency and Congress would probably argue that actions recommended here can be interpreted as a failure to support a "balanced" energy R&D program (a balanced program being sometimes defined as one which emphasizes equally the following three sources: nuclear, fossil, and non-nuclear non-fossil alternatives such as solar and conservation). Senator Mansfield has pressured ERDA to build an MHD test facility in Montana at an early date and funds were specifically added to current 1976 amendment for this purpose. EPA ENVIRONMENTAL PROTECTION AGENCY 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Construction grants 4,100 --- 4,100 -400 3,700 Research and Development 188 --- 188 188 Abatement and Control 336 --- 336 --- 336 Pesticides (30) --- (30) --- (30) Water Planning Grants (68) (68) --- (68) Drinking Water (25) (25) (25) State Control Agency Grants (80) (80) --- (80) Other (133) --- (133) --- (133) Energy, Research and Development 125 --- 125 --- 125 Enforcement 48 48 48 Agency and Regional Management 59 59 --- 59 All Other 9 --- 9 --- 9 Employment --- - 3 - 3 Total 4,864 4,864 -403 4,461 GERALD September 4, 1974 FORD LIBERRY SUMMARY OF OUTLAY REDUCTIONS ENVIRONMENTAL PROTECTION AGENCY (dollars in millions) Effect on outlays in 1976 1977 1978 A. 1977 Planning guidance XXX 4,864 XXX Adjustments: (None) XXX xxx Current estimate 4,864 XXX B. Suggested program reductions: Construction grants - 400 - 800 Operating Programs C. Employment reduction - 3 - 3 Total suggested reduction - 403 -803 Revised 1977 planning guidance and related 1976 amount 4,461 XXX September 4, 1975 Attachment B 1977 Outlay Reductions (Part II) Environmental Protection Agency Wastewater Treatment Construction Grant Program (dollars in millions) Date: 9-4-75 appropriation request deferral action X other administration action recission action /_/ substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 2,350 4,100 XXX 5,200 OMB recommendation 2,350 3,700 XXX 4,400 Suggested reduction 400 XXX 800 Actions required: EPA has mounted an intensive campaign to obligate funds in this program as fast as possible. The required action is to advise EPA to shift emphasis from a high obliga- tion rate to a careful review of projects for cost-effectiveness. Though we will be proposing legislative reforms in this grant program, they cannot affect 1977 outlays, even if enacted, because 1977 outlays are determinded largely by grants made in 1976 and Program impact: prior years. Main impact will be to improve cost-effectiveness review of projects before approval. This will require more time than is now spent on review and slow down obligations and, in turn, outlays. Other consideration: EPA will argue that States will maintain pressure for high obligation rate since they have a time limitation on obligation of their allotments and the unobligated funds are reallotted to other States by the Administrator. The answer to this is that we propose legislation to extend the time limitation. GSA Septem 5, 1975 GENERAL SERVICES ADMINISTRATION 1977 Outlay Reductions Revised Planning Current Suggested Planning Guidance Adjustments Estimate Reductions Guidance PROGRAM Real Property Activities -47 - -47 I -47 Personal Property Activities 153 153 153 Automated Data and Tele- communications Activities 7 7 7 Other Programs 155 155 155 Deductions for: Stockpile receipts -450 +400 -50 -750 -800 Other receipts -45 - -45 - -45 Employment reduction - - I -3 -3 -227 +400 173 -753 -580 Summary of Outlay Reductions (Part I) General Services Administration (dollars in millions) Date: September 4, 1975 Effect on outlays in: 1976 1977 1978 A. 1977 planning guidance XXX -227 XXX Adjustments: No enactment of stockpile disposal legislation XXX +400 XXX Subtotal XXX +400 XXX Current estimate 14 173 XXX B. Suggested program reductions: Stockpile Sales Increase XXX -750 -430 C. Employment Reduction XXX -3 XXX Total suggested reduction XXX -753 -430 Revised 1977 and related 1976 amount planning guidance 14 -580 XXX GERALD : FORD LIBRARY 1977 Outlay Reductions (Part II) GSA Stockpile Sales (dollars in millions) Date September 4, 1975 appropriation request deferral action other administration action rescission action X substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate -139 - -139 -50 -50 - - -40 OMB recommendation -139 -139 - -800 --800 - -470 Suggested reduction -750 I -750 -430 Actions required: Large scale enactment of stockpile disposal legislation. GENET R. FORD Program impact: No significant impact on Federal programs. Could have a downward price impact for THENEST certain commodities. Other considerations: Because of Congressional resistance to stockpile disposal legislation (Congressman Bennett) and because of DOD opposition, the NSC has issued a NSSM to review stockpile policy guidance, to be completed before the end of September. Completion of this study is a prerequisite to any disposal action. NASA National Aeronautics and Space Administration 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Space Shuttle (including related facilities) 1,436 -- 1,436 -80 1,336 Space Science and Applications 698 -- 698 -77 621 Space and Aeronautical Research and Technology 254 -- 254 -13 241 Satellite Tracking 276 -- 276 -- 276 Operation of NASA Installations 951 -- 951 -45 906 Construction of Facilities (excluding Shuttle Facilities) 41 -- 41 -- 41 All other (Including New Start allowance) 149 - 149 -35 114 3,805 -- 3,805 -250 3,555 GERALD R. FORD LIBRARY SUMMARY OF OUTLAY REDUCTIONS National Aeronautics and Space Administration (dollars in millions) Effect on outlays in: 1976 1977 1978 A. 1977 planning guidance XXX 3,805 XXX Adjustments: XXX -- -- Current estimate 3,498 3,805 XXX B. Suggested program reductions: Delay Space Shuttle Development Current estimate 1,126 1,436 1,395 OMB recommendation 1,090 1,356 1,445 Suggested reduction -36 -80 +50 Cancel Pioneer-Venus Project Current estimate 56 62 31 OMB recommendation 15 -- -- Suggested reduction -41 -62 -31 Eliminate FY 1977 New Starts Current estimate 20 77 OMB recommendation -- -- -- BERALD Suggested reduction -20 -77 1/ Reduce Institutional Manpower FORD Current estimate 951 951 950 OMB recommendation 951 906 905 Suggested reduction -45 -45 1/ The suggested reduction in FY 1977 includes approximately $10M related to a reduction of 500 positions in NASA's civil service work force. SUMMARY OF OUTLAY REDUCTIONS (CONT'D.) National Aeronautics and Space Administration (dollars in millions) Effect on outlays in: 1976 1977 1978 Reduce Various Research and Development Programs Current estimate 1,049 968 812 OMB recommendation 1,049 925 772 Suggested reduction -- -43 -40 Total suggested reduction -77 -250 -143 Revised 1977 planning guidance and related 1976 amount 3,421 3,555 XXX 1977 Outlay Reductions (Part II) NASA/Space Shuttle and Related Facilities (dollars in millions) Date: 9/5/75 X appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 1,261 1,126 1,482 1,436 XXX 1,395 OMB recommendation 1,261 1,090 1,382 1,356 XXX 1,445 Suggested reduction -- - 36 - 100 - 80 XXX + 50 Actions required: Delay initial launch of the reusable space shuttle by 6 months (from 6/79 to 1/80). If this reduction were anticipated for FY 1977, it would be prudent to take early action in FY 1976 because the Shuttle program is continuing to build up in manpower and commitments. Program impact: Such a slip would require the entire Shuttle Development program to be reworked including renegotiation of major development contracts (which is inherently costly and increases the difficulty in enforcing accountability for schedules and cost controls throughout the program). It would increase the overall cost of the program by an estimated $200 million and could also adversely affect NASA's ability to manage the technical, cost, and schedule performance of shuttle contractors (who would be provided an opportunity to negotiate new contractual agreements with the government because of the schedule slippage). GERALD FORD 2 Other considerations: NASA has in the past argued very adamantly (including direct appeals to the President) that the Space Shuttle should be exempted from major program readjustments undertaken solely for economic reasons (i.e., to constrain the budget). NASA can be expected to argue very strenuously that delaying the Shuttle schedule would be very costly and might cause political problems for the agency (i.e., that a "lack of Administration support" for the Shuttle could result in the program being cancelled by the Congress). Because of budget constraints, NASA has already reduced and deleted some shuttle development activities to cut program costs. The Shuttle program has been slipped by two years from initial milestones as a result of budgetary decisions in previous years. These delays have already increased overall Shuttle program develop- ment costs and have reduced the reserve margin built into the estimate to handle unforeseen dévelopment problems. NASA believes that the Shuttle requires a stable funding plan to insure schedule accomplishment and for NASA effectively to manage the program. It should also be noted that the U.S. will not have a capability to put man in space until the space shuttle flies. The need to provide for a continuing U.S. manned presence in space was a major consideration in the President's decision last fall to continue space shuttle development on its current schedule. 1977 Outlay Reductions (Part II) NASA/Pioneer-Venus Mission (dollars in millions) Date: 9/5/75 / / appropriation request / / deferral action / / other administration action / / rescission action / / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 66 56 70 62 XXX 31 OMB recommendation 20 15 -- XXX Suggested reduction -46 -41 -70 -62 XXX -31 Action required: Cancel the Pioneer-Venus orbiter/probe missions to explore the atmosphere and surface of the planet Venus in calendar year 1978. This mission was approved in the FY 1975 budget and is already under contract development. In order to maximize savings, the mission should be cancelled as soon as possible. Program impact: The Ploneer-Venus mission has been assigned high priority by NASA and the scientific community. Scientists believe that understanding Venus (with a heavy CO₂ atmosphere) may indirectly contribute toward furthering our knowledge of the earth's atmosphere, particularly the results of introducing pollutants into the atmosphere. The cancellation of the program would forego a unique opportunity in 1978. In 1978 Venus will be closer to the earth than during other launch opportunities. This means NASA can send a large spacecraft with minimum size launch vehicle. In the next launch window in 1980 NASA would have to reduce the size of the spacecraft (hence, its scientific payload) or increase the size (and cost) of the launch vehicle. Other considerations: Cancellation of the project after it has been approved by the Congress could draw substantial criticism from the Congress (particularly the authorization committees). NASA also believes that such action could bring pressure on the space shuttle because critics would argue that the reductions in space science program, and the specific cancellation of this mission, are the result of NASA (and the Administration) placing too much emphasis on space Shuttle development as compared with other space program objectives. GERALD R. FORD 1977 Outlay Reductions (Part II) NASA/New Starts in Space Science and Applications (dollars in millions) Date: 9/5/75 appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 50 20 XXX 77 OMB recommendation XXX Suggested reduction -50 -20 XXX -77 Action required: Allow for no new program starts in FY 1977 (i.e., initiation for specific new satellite or research projects). This would amount to a two year deferral of "new starts" since in the FY 1976 Budget, a decision was made that no new program initiatives would be in NASA's FY 1976 budget in order to comply with the President's "no new start" policy for FY 1976. Program impact: No new starts in FY 1977 would result in the postponement of potential new missions such as the Solar Maximum Mission to study the sun during maximum Solar flare activity in 1979-80, the Large Space Telescope to study other galaxies in the universe, a planetary mission to Uranus, earth atmospheric experiments, and the development of scientific instruments for the European-developed Spacelab. Because of the nature of space technology, the conduct of R&D activities in space science and applications require periodic initiation of new satellite development efforts to replace satellites that have failed or completed their specific research mission. Other.considerations: NASA has taken the position that the agency should be allowed to initiate new starts each year in the unmanned satellite programs in order to maintain program balance while the shuttle is being developed. Otherwise, the Administration might be accused by certain members of the Congress (e.g. Senator Proxmire, Senator Moss, Congressman Teague) of developing the shuttle at the expense of advancements in space science and applications. In addition, if no new starts were allowed for several years NASA might be accused of building a space shuttle that will have no scientific and applications payloads to fly. 1977 Outlay Reductions (Part II) NASA/Operation of NASA Installations (dollars in millions) Date: 9/9/75 X appropriation request / deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 942 951 951 951 XXX 950 OMB recommendation 942 951 901 906 XXX 905 Suggested reduction -50 -45 XXX -45 Actions required: Reduce overall in-house manpower levels (civil service and support contractor) at NASA Field Center Installations and Headquarters. Would be accomplished by means of reduced authorization and appropriation requests and reduction in end-of-year ceilings for the civil service work force. OMB staff have assumed that a reduction of this magnitude would probably require elimination of about 500 civil service positions, 1,000-1,200 support contractors as well as general belt-tightening in other areas related to the operation of the NASA centers. In order to obtain maximum cost savings in FY 1977, it would be desirable to initiate the reductions during FY 1976. Program impact: OMB staff believe that by judicious review of the manpower requirements of each NASA center, the agency can accomplish cost savings of this magnitude without affecting the ability of NASA to carry out its basic overall mission and program objectives including the shuttle. There would, however, be some disruption of activities related to the possible need to conduct reductions in force (RIFs) at the NASA centers. It should be noted that large reductions in NASA's manpower levels have already been achieved since the completion of the Apollo mission (NASA civil service employment has been decreased by about 10,000 positions from its peak level of 35,000 in FY 1966). CERALD eye: 2 Other considerations: NASA has in the past vigorously defended the need for the large in-house workforces at the ten NASA field installations and may not accept the OMB staff assessment that the outlay reductions projected here are achievable without major impact on various NASA programs. NASA argues that the U.S. should strive to maintain the very substantial technical capabilities built up at the NASA centers during the 1960's. We do not anticipate that any groups outside of NASA who are interested in the space program (i.e., particularly the Congress) would object to these reductions, particularly in the context of the other reductions considered for FY 1977. The reductions proposed in this area are admittedly somewhat arbitrary, but are in the view of OMB staff appropriate in relation to the other programmatic reductions identified in the NASA program. 1977 Outlay Reductions (Part II) NASA/Ongoing Programs in Aeronautics, Science, Applications and Energy (dollars in millions) Date: 9/5/75 / / appropriation request / X / deferral action / / other administration action / / rescission action / / substantive legislation / / other congressional action 1976 1977 1978 Amount: BA Outlays BA Outlays BA Outlays Current estimate 999 1,049 890 968 XXX 812 OMB recommendation 999 1,049 840 925 XXX 772 Suggested reduction -- -50 -43 XXX -40 Actions required: Reduce funding for various ongoing NASA R&D programs. Actions contemplated include: terminating NASA direct funding for energy R&D programs (and relying on ERDA funds); terminating the advanced manned missions program (e.g., space station design studies); reducing activities in technology utilization, aeronautical research and technology, space science and space applications. The principal means for accomplishing these reductions would be reduced authorization and appropriation requests, but it may also be necessary to initiate deferral actions for specific space flight projects whose scheduled launch dates could be affected by the reductions. Program impact: Reductions of this magnitude may be possible without adversely affecting the flight schedules for most of the currently-commited NASA satellite projects. The principal programmatic impact would fall upon long-range basic research and technology development activities. Other considerations: NASA could be expected to object to the level of these reductions, primarily on the basis that these programs have been subjected to many such reductions during the past six years, thereby endangering the effectiveness of NASA's long-term science and technology development efforts. Some outside pressure in support of these views could be expected from Congress, particularly the authorization committees (Senator Moss, Congressman Teague). 6 VA VETERANS ADMINISTRATION 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program Guidance Adjustments estimate reductions guidance Compensation & Pensions 7815 248 8063 360 7703 Readjustment Benefits 3855 485 4340 485 3855 Medical Care 3922 130 4052 327 3725 Construction 260 - 260 10 250 Other 966 23 989 20 969 Total 16,818 886 17,704 1,202 16,502 GERALD R.F.C. FORD Effect on Outlays in 1976 1977 1978 C. Employment outlay re- duction (non-add; included in Medical Care--staffing re- duction) 0 53 53 Effect on Outlays in 1976 1977 1978 B. Suggested program reductions (cont'd.) Medical Care beneficiary travel Current estimate 3,721 4,052 4,139 OMB recommendation 3,721 4,027 4,114 Suggested reduction 0 25 25 Construction Current estimate 184 260 220 OMB recommendation 184 250 190 Suggested reduction 0 10 30 Medical & Prosthetic Research Current estimate 95 100 100 OMB recommendation 95 80 100 Suggested reduction 0 20 0 GI Bill Current estimate 5,310 4,340 3,543 OMB recommendation 5,310 3,855 3,034 Suggested reduction 0 485 509 Pensions Current estimate 2,929 2,899 2,875 OMB recommendation 2,929 2,624 2,600 Suggested reduction 0 275 275 Burial benefits Current estimate 86 91 95 OMB recommendation 86 6 6 Suggested reduction 0 85 89 Total suggested reduction 0 1,202 1,293 Revised 1977 planning guidance and related 1976 amount GERALD R. 18,167 16,502 XXX FORD SUMMARY OF OUTLAY REDUCTIONS Veterans Administration (dollars in millions) Effect on Outlays in 1976 1977 1978 A. 1977 Planning guidance XXX 16,818 XXX Adjustments: 1. Non-repeal of GI Bill 2-year eligibility extension 485 509 2. Non-enactment of health in- surance reimbursement legislation 130 135 3. Enactment of mandatory legislation, and workload increases in mandatory programs 271 271 886 915 Current estimate 18,167 17,704 XXX B. Suggested program reductions: Medical Care staffing Current estimate 3,721 4,052 4,139 OMB recommendation 3,721 3,880 3,909 Suggested reduction 0 172 230 Medical Care insurance reimbursement Current estimate 3,721 4,052 4,139 OMB recommendation 3,721 3,922 4,004 Suggested reduction 0 130 135 GERALD CHUS 1977 Outlay Reduction (Part II) Veterans Administration - Medical Care (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 3721 3721 4052 4052 XXX 4139 OMB recommendation 3721 3721 3880 3880 XXX 3909 Suggested reduction 0 0 172 172 XXX 230 Actions required: Reduce allowances made in planning numbers for increased workload, program and personnel costs. Eliminate Quality Care allowance which allowed hiring of 3,200 persons in FY 1977, and workload allowance by 200 additional positions. Program impact: Arbitrarily reduces spring allowances for workload and program cost increases. Requires VA to absorb increases, which would probably impact on treatment programs. Eliminates Quality Care dollars to hire 3,200 new personnel, and reduces by 200, personnel needed to meet workload increases. Reduces 1977 Medical Care person- nel increase from 7,700 to 4,300, which will affect patient care. Other considerations Agency and Congress will vehemently oppose reductions. Breaks Administration commitment toward implementing Quality Care Survey-identified deficiencies in VA staffing. Would damage VA morale severely. 1977 Outlay Reduction (Part II) Veterans Administration - Medical Care (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action X substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 3721 3721 4052 4052 XXX 4139 OMB recommendation 3721 3721 3922 3922 XXX 4004 Suggested reduction 0 0 130 130 XXX 135 Actions required: Propose legislation to allow reimbursement to VA for treatment rendered to those eligibles covered by insurance programs including workmen's compensation. Program impact: No direct impact on delivery of care. Other consideration: Legislation has been proposed but not acted upon in previous years, due to lack of interest by Congress. Additionally, not strongly pushed by VA. FORD 1977 Outlay Reduction (Part II) Veterans Administration - Medical Care (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 Amount BA Outlays BA Outlays BA Outlays Current estimate 3721 3721 4052 4052 XXX 4139 OMB recommendation 3721 3721 4027 4027 XXX 4114 Suggested reduction 0 0 25 25 XXX 25 Actions required: Propose that Congress amend Title 38 to eliminate the payment of travel expenses to all but service-connected VA beneficiaries and for emergency ambulance or transfer from one VA facility to another while under treatment. This action could also be taken by the VA Administrator without requiring Congressional action. Program impact: Will Lave no impact upon the provision of medical treatment or on the quality of medical program. Could slightly affect treatment demands on some VA hospitals. Other consideration: Controversial project. VA patients approximately 60% non-service- connected to be treated basically as space available. Travel expenses reimbursement is thus true bonus to them. Program has been poorly administered so that many get travel money who can well afford to pay. Moreover, VA is only agency that pays its beneficiaries travel costs, even for insurance examinations. Neither active duty servicemen nor their dependents are paid for travel in connection with medical treatment or examination. 1977 Outlay Reduction (Part II) Veterans Administration - Construction (dollars in miliions) Date: Sept. 5, 1975 X appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 404 184 160 260 XXX 220 OMB recommendation 404 184 94 250 XXX 190 Suggested reduction 0 0 66 10 XXX 30 Actions required: Reduce planning number for Major Construction to zero (0) for FY 1977. Program impact: No Major Construction in FY 1977 would mean no replacement VA hospital in FY 1977; a reduction from planning decision to build one replacement per year. This will slow down VA efforts to bring hospitals up to modern standards. Impact on patient care difficult to measure. Other improvement projects would be postponed also. Other consideration: Congress is especially anxious to have several hospitals replaced and will not like a one-year halt. VA will also oppose. 1977 Outlay Reduction (Part II) Veterans Administration - Medical & Prosthetic Research (dollars in millions) Date: Sept. 5, 1975 / X appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 95 95 100 100 XXX 100 OMB recommendation 95 95 80 80 XXX 100 Suggested reduction 0 0 20 20 XXX 0 Actions required: Reduce planning number for medical research by $20.0 M in FY 1977. Program impact: This is an arbitrary reduction which may affect recruitment and retention of some (no estimate possible) VA clinical medical personnel. Should allow for continuation of ongoing projects but will require VA to reprioritize its research. Other consideration: Will be strongly opposed by Congress and VA who justify research for professional recruitment/retention and as critical to medical programs. Some VA research appropriate (e.g., prosthetic, spinal cord injuries, etc.) to veteran illness, but much done which pursued by other groups. 1977 Outlay Reduction (Part II) Veterans Administration - G.I. Bill (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action / substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 5325 5310 4255 4,340 XXX 3543 OMB recommendation 5325 5310 3770 3,855 XXX 3034 Suggested reduction 0 0 -485 -485 XXX -509 Actions required: Repropose repeal of two-year GI Bill eligibility extension and propose repeal of ad- vance payment and prepayment provisions. Program impact: Repeal of the two-year eligibility extension (-385 in FY 1976, -469 in FY 1977) would cause 311 thousand veterans not to receive GI Bill benefits in FY 1977, and 379 thousand in FY 1978. Repeal of the advance payment and prepayment provisions would greatly reduce the growing overpayments which now all too often become bad debts. Veterans would be paid after the end of a school-certified month in training, much as the Korean GI Bill operated. Other consideration: The two-year extension now only affects veterans discharged be- tween 1955 and 1968. Because of the length of time since their separation, these veterans should need much less readjustment assistance than a recently separated veteran. How- ever, Congress has, to date, resisted moving this item. The advance and prepayment procedures originally were the work of Congress. However, with the rapid increase in overpayments, there seems to be a mood to go back to the prior system. CERALD road 1977 Outlay R ction (Part II) Veterans Administration - Pensions (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 2919 2929 2830 2899 XXX 2875 OMB recommendation 2919 2929 2555 2624 XXX 2600 Suggested reduction 0 0 -275 -275 XXX -275 Actions required: Propose enactment of legislation which would eliminate the spouse's income exlusion from the calculation of a veteran's pension. Poogram impact: This action would deliver the program benefits on a more equitable basis, i.e., to the recipients who have the greatest total family financial need. Many thousands of present beneficiaries would either be dropped from the rolls or have their benefits reduced. Other consideration: Past attempts in Congress have not been fruitful. There may be more sympathy for this action with the deficit going up, but the effects of inflation on persons with fixed incomes are likely to make this unpopular in Congress. Veterans Pensions is a veterans welfare program, more comparable to SSI. No contributions have been made and there is no comparison to OASDI. Eligibility is based solely on war- time service, veteran's lack of employability due to physical condition, and need, as determined by other countable income. 1977 Outlay Re tion (Part II) Veterans Administration - Burial Benefits (dollars in millions) Date: Sept. 5, 1975 appropriation request deferral action other administration action rescission action X substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount Current estimate 86 86 91 91 XXX 95 OMB recommendation 86 86 6 6 XXX 6 Suggested reduction 0 0 -85 -85 XXX -89 Actions required: Propose enactment of legislation which would provide the VA burial benefit to families of deceased veterans only when and in such amount as was not provided in any other similar purpose payment by the U.S. Government. Program impact: The VA payment presently is made regardless of inherent family need. Additionally, nearly all veterans are eligible for other Federal financial assistance programs, e.g., more than 90% of all veterans are covered under the Social Security program. Other consideration: This item has not been provided hearings in Congress. As an example of an expensive, overlapping Federal benefit, however, it might be a good item to emphasize in a deficit reduction program. Veterans burial benefits are not completely duplicative of social security death pay- ments. The latter payments are made to the surviving spouse regardless of whether the spouse pays for burial, and are not intended specifically as burial insurance. About 55% of social security lump sum death payments are made to the surviving spouse. Sept r 5, 1975 CIVIL SERVICE COMMISSION 1977 OUTLAY REDUCTIONS Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Entitlement Programs 9070 1188 10258 -312 9946 Central Personnel Management 104 - 104 I 104 Intergovernmental Personnel Assistance 15 - 15 I 15 Intrafund offsets -19 - -19 - -19 Employment reduction - - - I - Total 9170 1188 10358 -312 10046 GERALD ? FORD HABIT Summary of Outlay Reductions (Part I) Civil Service Commission (dollars in millions) Date: September 4, 1975 Effect on outlays in: 1976 1977 1978 A. 1977 planning guidance XXX 9170 XXX Adjustments: A. No enactment of - Elimination of 1% kicker in retirement annuity indexation XXX 158 XXX No enactment of - B. 5% cap to pay and to cost-of-living annuity escalator in retirement program XXX 1030 XXX Subtotal XXX 1188 XXX Current estimate 8712 10358 XXX B. Suggested program reductions: Entitlement Program, Civil Service Retirement, eliminate 1% kicker XXX -158 -339 Limit cost-of-living increases in retirement programs XXX -154 -154 C. Employment reduction XXX XXX XXX Total suggested reduction XXX -312 -493 Revised 1977 and related 1976 amount planning guidance 8712 10046 XXX 1977 Outlay Reductions (Part II) Entitlement - Retirement Fund (dollars in millions) Date: September 4, 1975 appropriation request deferral action other administration action rescission action X substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 12318 8624 14600 10252 11683 OMB recommendation 12318 8624 14600 10094 11344 Suggested reduction -158 -339 Actions required: Legislation to eliminate 1% bonus in annuity indexation effective July 1, 1976 for this entitlement. The bonus is now added to cost-of-living increases to compensate for the time lag between the actual rise in cost-in-living and the effective date of the increase. Program impact: Retiree annuity increases will be less due to elimination of 1% bonus which tends to overcompensate retirees over time. Other consideration: In view of past Congressional opposition to reductions in employee benefits, Congressional resistance to this proposal is expected. 1977 Outlay Reductions (Part II) Entitlement - Retirement Fund (dollars in millions) Date: September 4, 1975 appropriation request deferral action other administration action rescission action X substantive legislation other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 12318 8624 14600 10252 11683 OMB recommendation 12318 8624 14600 10098 11529 Suggested reduction -154 -154 Actions required: Enact legislation to apply a "limit" to pay and benefit increases by May 31, 1976. The "limit" would be equal to 60% of the increase in the applicable index. Program impact: Retiree annuity increases will be less due to elimination of 1% bonus and cap on cost-of-living. Other consideration: Government employee unions and beneficiaries will resist the change strongly. In view of past Congressional opposition to "caps", Congressional resistance to this proposal is expected. EXPORT-IMPORT BANK 1977 OUTLAY REDUCTIONS (dollars in millions) Revised Planning Current Suggested planning Program guidance Adjustments estimate reductions guidance Direct Loans 1700 0 1700 390 1310 Total 1700 0 1700 390 1310 BERALD 148217 ? FORD SUMMARY OF OUTLAY REDUCTIONS EXPORT-IMPORT (dollars in millions) Effect on outlays in: 1976 1977 1978 A. 1977 Planning guidance XXX 1700 XXX Adjustments: 0 XXX xxx Current estimate 1700 1700 XXX B. Suggested program reductions: Direct loans 390 1170 Total suggested reduction 65 390 1170 Revised 1977 planning guidance and related 1976 amount 1635 1310 XXX 1977 Outlay Reductions (Part II) Export-Import (dollars in millions) Date: 9/6/75 / X / appropriation request / / deferral action / / other administration action / / rescission action / / substantive legislation / / other congressional action 1976 1977 1978 BA Outlays BA Outlays BA Outlays Amount: Current estimate 2,913 1,700 2,900 1,700 XXX 1,700 OMB recommendation 2,890 1,635 2,236 1,310 XXX 530 Suggested reduction 0 65 664 390 1,170 Actions required: In the second half of 1976 and in 1977, reduce the Exim direct loan authorization level by an amount sufficient to preclude credits to countries that probably could arrange other means of financing, i.e., the industrialized countries and capital-exporting oil producing countries. Also, aircraft export financing would be terminated. Program impact: This would reduce Eximbank direct credits by about 22% and total program (including discount loans and guarantees and insurance) by less than 10%. The impact may not be severe since it would conform to the likely outcome of ongoing negotiations to limit international export credit competition. If international negotiations fail, however, the cutback would make it difficult for Eximbank to meet foreign competition.