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1975/05/28 HR4481 Emergency Employment Appropriation Act 1975 (vetoed) (1)
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1975/05/28 HR4481 Emergency Employment Appropriation Act 1975 (vetoed) (1)
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The original documents are located in Box 25, folder "5/28/75 HR4481 Emergency
Employment Appropriation Act 1975 (vetoed) (1)" of the White House Records Office:
Legislation Case 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 R. 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States of America his copyrights in all of his unpublished writings in National Archives collections.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.
Exact duplicates within this folder were not digitized.
Digitized from Box 25 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
VETOED 5/28/75 Clack
0/27
THE WHITE HOUSE.
ACTION
WASHINGTON
Last Day: June 2
to 5/29/75
May 26, 1975
MEMORANDUM FOR
THE PRESIDENT
FROM:
JIM CANNON
Jane
SUBJECT:
Enrolled Bill H.R. 4481
Emergency Employment
Appropriation Act, 1975
Attached for your consideration is H.R. 4481, sponsored
by Representative Mahon, which appropriates:
-- $4,729 million in budget authority,
-- $485 million in direct and insured loan authority,
and
-- $92 million in appropriations to liquidate contract
authority for the Departments of Agriculture,
Commerce, Interior and Labor, the Corps of Engineers,
General Services Administration, the Small Business
Administration and other agencies.
The appropriations and loan authority provided by this
enrolled bill are $3.3 billion above your request of
$2,043 million for emergency employment.
A discussion of the features of the enrolled bill is provided
in OMB's enrolled bill report at Tab A.
OMB recommends that you veto H.R. 4481 and issue the attached
veto message. Bill Seidman, Max Friedersdorf, Phil Buchen
(Lazarus) and I concur in OMB's recommendation. Marsh concurs.
RECOMMENDATION
That you sign the veto message at Tab B, which has been
cleared by Paul Theis.
Approve
MR7
Disapprove
veto message
veto message
GERALD
- 5/29/75
Hold - Check on timing
Date 5/28/75 -
per MyR Linder - -
and deliver at 3 pm
on 5/29/75
C FORD
OFFICE OF THE PRESIDENT STATES UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 21 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 4481 - Emergency Employment Appropriation
Act, 1975
Sponsor - - Representative Mahon (D), Texas
Last Day for Action:
June 2,1975 1975
- Transmittal of a veto message prior to the
Congressional recess for Memorial Day is
recommended
Administration
Enrolled
Congressional
Appropriations:
Request
Bill
Increase
(In millions)
New budget authority
$ 2,043
$ 4,729
$ 2,686
Direct and insured loans
--
485
485
Liquidation of contract authority
--
92
92
Outlay Increases: FY 1975: $ 684 million
FY 1976: $1,540 million
Highlights:
- With the exception of your requests of $1.6 billion for temporary
employment assistance, $413 million for summer youth employment, and
$5 million for the U.S. Railway Association, all appropriations in
this bill were unrequested.
- Almost half of the $3.3 billion provided by this bill over your request
would be spent in fiscal year 1976, making the $60 billion deficit
line difficult to hold.
- The bill contains a conglomeration of increases, some of which are
unneeded, or more costly than necessary, or will not produce immediate
employment, or will set new program levels which will be difficult to
reduce later.
Recommendation
I recommend that you veto the bill and issue a veto message before the
Congress recesses for Memorial Day.
Jan Director James T. Lynn Lbg
FORD & LIBRARY GERALD
Attachment
EN SERVICE STATE
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 2 1 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 4481 - Emergency Employment
Appropriation Act, 1975
Sponsor - Representative Mahon (D), Texas
Last Day for Action
Jaine 2, 1975 1975 Monday
Because the House plans to recess
at the end of business on May 22 and the Senate the following
day, transmittal of the veto message by May 22 is recommended.
Purpose
Appropriates a total of $4,729 million in budget authority,
$485 million in direct and insured loan authority, and $92 mil-
lion in appropriations to liquidate contract authority for the
Departments of Agriculture, Commerce, Interior, and Labor; the
Corps of Engineers; the General Services Administration; the
Small Business Administration; and other agencies.
Agency Recommendations
Office of Management and Budget
Disapproval (veto
statement attached)
Discussion
The economic and budgetary pressures the enrolled bill would
generate if it were approved are the bases for our veto
recommendation:
The appropriations and loan authority provided by the
enrolled bill are $3.3 billion above your request of
$2,043 million for emergency employment. Almost half of
the $3.3 billion of increased expenditures provided by
the bill over your request would be spent in fiscal year
1976, making the $60 billion deficit line difficult to
hold. Spending would continue in 1977 and later years
and would increase the projected deficits for those years.
FORD i LIBRARY GERALD
2
The increased deficits resulting from this additional
spending would lead to excessive Federal demands on finan-
cial markets, making borrowing more difficult and driving
interest rates up. Thus, this bill could reverse the very
economic growth that the Congress intended to help stimulate.
Many of the additional amounts in the bill for existing
programs will not quickly improve employment, but will
produce spending levels that will be difficult to reduce
later after the economic situation has improved. Spending
under the bill cannot occur soon enough to accelerate
the economic recovery that is expected to be well underway
by the end of this year, but it could occur late enough
into the recovery to fuel again the inflationary pressures
that are just now subsiding.
In addition to the $1.6 billion for public service employment,
the $413 million (increased by the Congress to $458 million)
for summer youth employment and the $5 million for the U.S.
Railway Association which you requested, the enrolled bill
contains appropriations of:
-- $642 million for the Farmer's Home Administration.
Although studies by the Department of Agriculture indi-
cate a demand for program assistance in excess of current
funding levels, the loan and grant programs increased
by the enrolled bill often require long lead times to
get underway and will therefore not provide immediate
employment assistance.
-- $506 million for the General Services Administration.
Included in this amount is $440 million for the Federal
Buildings Fund. This appropriation would violate the
basic premise of the Federal Buildings Fund: to operate
on a businesslike basis and finance real property
expenses out of proceeds of rental receipts. Language
included will exempt GSA from the requirement of repay-
ment with interest of appropriations to this Fund.
Further, it is doubtful that GSA could effectively use
the additional amounts. The remaining $66 million for
the General Supply Fund would purchase 18 thousand
vehicles, which would be used to replace approximately
one-fourth of the entire motor pool fleet. The appro-
priation would be uneconomical and wasteful, because
vehicle purchases are normally financed through agency
user charges and at a slightly lower rate.
$479 million for the Department of Commerce. Of this
amount, $375 million would be used in the Job Opportunities
FORD is LIBRARY GERALD
Program of the Economic Development Administration. It is
3
not yet known whether the $125 million provided for this
program in the Urgent Supplemental Appropriations Act
of December, 1974, can be effectively used, let alone
another $375 million. Experience to date, however, has
shown that the program is extremely difficult and time
consuming to administer. The remaining $104 million
would be used to accelerate the programs of the Economic
Development Administration and the Regional Action
Planning Commissions. Previous efforts to utilize long-
range development programs as anti-recession tools have
not been successful. Funds have not been utilized in
a timely enough manner to significantly shorten the period
of recession, assistance often has not greatly benefited
those areas most in need, and costs of generating temporary
employment through such mechanisms have been high.
-- $385 million for Small Business Administration loan pro-
grams. The recent tax reduction legislation, which
included reductions in both corporate and personal income
taxes and increased investment tax credits, provides the
financial stimulus to allow small businesses to recover
from the recent drop in the economy. Federal Reserve
efforts to expand the growth of the money supply are
causing a resurgence in the availability of capital for
small businesses. Further, there is the question of
whether the Federal government should--and can effectively--
assume a large role in making individual credit allocation
decisions for small business financing. It has been the
Administration's position that the principal responsibility
for such decisions should be left with the private sector.
-- $333 million for public works projects of the Corps of
Engineers and Bureau of Reclamation. These funds are to
be used to accelerate completion of projects now underway.
In addition to providing additional funds, approving the
bill would give added weight to an undesirable statement
of congressional intent contained in the conference report.
The report states that recreation development at projects
authorized prior to 1965 should be 100 per cent Federally-
funded. This is inconsistent both with the Administration's
cost-sharing policy on water resource projects in general
and with the law covering cost-sharing on projects auth-
orized after 1965.
-- $190 million for higher education and work incentives
under the Department of Health, Education, and Welfare.
The increase of $120 million for college work-study grants
is unnecessary at this time, given the student assistance
funds already appropriated and the expected 1976 funding
level. The funds for work incentives ($70 million) restore
a congressional reduction in last year's appropriation request.
FORD & LIBRARY GERALD
4
- $143 million for the Forest Service. These funds are
primarily for low priority items and may result in
completion of some projects (i.e., forest roads and trails
construction) in advance of need.
-- $115 million for the Soil Conservation Service of the
Department of Agriculture. Of the amount appropriated,
$106 million is to assist in the reduction of backlogs
in the watershed and flood prevention program.
-- $100 million for payment to the U.S. Postal Service. Under
the Postal Reorganization Act of 1970, Federal subsidies
are provided to the Postal Service for three specific
purposes: to cover public service costs, reimburse the
Postal Service for revenue foregone when carrying particu-
lar classes of mail at reduced rates, and for covering
liabilities of the former Post Office Department. To
provide funds as recommended in the bill would not conform
to the above statutory authorizations. Provision of these
funds would once more inject the legislative branch into
Postal decisionmaking and affect Postal management's
long-range planning efforts. It would once more subject
the Postal Service to the vagaries of the appropriation
process and establish a precedent for providing additional
forms of subsidy to assist the Postal Service in areas
not envisioned by the Reorganization Act. More importantly,
provision of this $100 million would shift a substantial
amount of postal costs from the users of the Postal Service
onto the general taxpayer.
-- $30 million for Community Service Employment for Older
Americans, that not only duplicates comprehensive manpower
assistance activities, but may actually reduce the amount of
manpower services State and local governments provide older
workers.
In sum, the bill contains a conglomeration of increases, some of
which are unneeded, more costly than necessary, will not produce
immediate employment, or will set new program levels which will
be difficult to reduce later.
Recommendation
You have warned that this bill would be vetoed if the enrolled
version coming to you for signature did not represent a significant
reduction from both the House and Senate versions. This enrolled
bill does not represent such a reduction. I recommend that you
veto the bill and issue a veto message (draft attached) before
the Congress recesses for Memorial Day.
FORD i LIBRARY GERALD
Jan Director T. T.Kg Lynn
Attachment
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 21
Time:
500pm
FOR ACTION: Paul Leach
CC (for information): Jim Cavanaggh
Max Friedersdorfy oreveto
Roger Semerad
Jack Marsh
Robert Hartmann
Bill
Paul Theis commits
too too long
FROM THE STAFF SECRETARY
DUE: Date: May 21
Time: asap
SUBJECT:
Enrolled Bill H.R. 4481 - Emergency Employment
Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Pleassereturn to Judy Johnston, Ground Floor West Wing
GERALD, p ANNUSIT FORD
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 21
Time:
500pm
FOR ACTION: Paul Leach
CC (for information):
Roger Semerad
Jim Cavanaugh
Jack Marsh
Max Friedersdorf
Bill Seidman
Robert Hartmann
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date: May 21
Time: asap
SUBJECT:
Rec. 5:40 pm
5/21/75
Enrolled Bill H.R. 4481 - Emergency Employment
Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Propare Agenda and B.H.F
Drafi Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
agee on veto
Voto message overlong X
GRAND R.HORD ЛАВКИТ
RAA
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you unticipate a
delay in submitting the required material, please
Jemes H. Cavanoug)
ielephone the Staff Secretary immediately.
For the President
OFFICE OF THE PRESIDENT STATES $12 UNITED
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 22 1975
MEMORANDUM FOR:
JERRY H. JONES
FROM:
Dale R. McOmber
SUBJECT:
Veto Message on the Emergency Employment
Appropriations Bill (H.R. 4481)
For each bill the President vetoes primarily on the grounds
of fiscal restraint, Director Lynn suggests that the veto
message include a statement on the effect of Congressional
action (or inaction) on the deficit to date.
Accordingly, the third paragraph of the OMB draft veto
message on the Emergency Employment Appropriations Bill
should be revised to read as follows:
First, it will exacerbate budgetary and
economic pressures. In my address to the Nation
on March 29, announcing my decision to sign the
Tax Reduction Act, I stressed the need to keep
the 1976 deficit at or below $60 billion. This
bill is one of many being considered by the
Congress that, together, would increase the
deficit to $100 billion or more. Congressional
actions and inactions have already added
$7.3 billion to the 1975 deficit and $4.4 billion
to the 1976 deficit. This bill authorizes spending
of a further $3.3 billion above my budget requests,
with almost half of this added spending occurring
in fiscal year 1976. In addition to its impact
on 1976, this bill--and the others making their way
through the Congress--would add substantially to
spending and to Federal deficits in 1977 and later
years.
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 21
Time:
500pm
FOR ACTION:
Paul Leach
CC (for information):
Roger Semerad
Jim Cavanaugh
Jack Marsh
Max Friedersdorf
Bill Seidman
Robert Hartmann
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date:
May 21
Time
asap
SUBJECT:
Enrolled Bill H.R. 4481 - Emergency Employment
Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Propare Agenda and Brief
Draft Regly
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
No objection. The vote on final passage in the Senate
was 53-13-31; a review of the absentees would indicate
that there is a good chance to sustain the veto in this
chamber. In the House, the vote was 313-113-7; a base
of 113 in the House would appear to be a realistic one
upon which to build support to sustain the veto.
KEN LAZARUS 5/21/75
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or If you anticipate 0
delay in submitting the required material, please
James H. Cavanaugi
telephone the Statf Scoretary immediately.
For the President
3
THE WHITE HOUSE
ACTION MEMORANDUM
LOG NO.: 5/24 p.m.
Recd Saturday
WASHINGTON
Date: May 23, 1975
Time: 5:40pm
FOR ACTION: Paul Leach
cc (for information):
Max Friedersdorf
Jim Cavanaugh
Ken Lazarus
Robert Hartmann
Paul Theis
Jack Marsh
Jim Lynn
FROM THE STAFF SECRETARY
DUE: Date: May 26
Time:
12:30p.m.
SUBJECT:
Revised and shortened veto message - H.R. 4481
Emergency Employment Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
52 EN 2 to
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the rustined material. please
telephone the Staff Secretory homedicialy.
Covanaugh
the
Procident
AW
TO THE HOUSE OF REPRESENTATIVES:
oh
I return without my approval, H.R. 4481, the
C9
p876
Emergency Employment Appropriation Act.
This bill is not an effective response to the
unemployment problem. We must reduce unemployment,
/ But this bill is the wrong approach to the problem
for a number of reasons.
It would exacerbate budgetary and economic pressures.
on
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the
CQ
on
p696
need to keep the 1976 deficit below $60 billion. This
on
bill is one of many being considered by the Congress that,
combined, would increase the deficit to $100 billion or
Vegislating
ok
our Memo
more. This bill authorizes spending of $3.3 billion
above my budget requests. Almost half of this added
on
spending would occur in fiscal year 1976. In addition
to its impact on 1976, this bill -- and the others
making their way through the Congress --- would add
substantially to spending and to Federal deficits in
1977 and later years.
- 2 -
H. R. 4481, by increasing Federal deficit borrowing,
would contribute to choking off the very economic growth
that it is intended to stimulate. Further, it is unlikely
that spending under this bill could occur soon enough to
accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment
is not likely to occur until well into 1976
An
appreciable
amount of spending would continue in calendar year 1977.
Projects initiated under this bill will be very difficult
to stop. This additional spending comes at the wrong
time and would run the risk of fueling inflationary
pressures that are now subsiding.
H.R. 4481 is the result of a process whereby the
Congress has taken a simple, straightforward, specific
Administration proposal for extending public service jobs
and providing summer youth employment and turned it into
a bill containing a host of provisions of extremely
uneven merit.
To help overcome the recession and high unemployment,
I proposed, and the Congress enacted, a major tax cut. I
have also proposed an extension of unemployment compensa-
tion benefits, together with increases, which are included
in this bill for public service jobs and summer employment.
- 3 -
Further stimulus is now counter-productive. I am
determined to hold the line on the deficit for 1976 at
$60 billion.
The Nation does need a bill that will provide the
funds I recommended for immediate and temporary employ-
ment through public sector jobs and summer youth employment.
Student summer vacations are close at hand and I urge
the Congress to pass such a bill promptly.
Therefore, I must veto this bill.
FORD LIBRARY & CERALD
TO THE HOUSE OF REPRESENTATIVES:
I return without my approval, H.R. 4481, the
Emergency Employment Appropriation Act.
This bill is not an effective response to the
unemployment problem. We must reduce unemployment.
But this bill is the wrong approach to the problem
for a number of reasons.
It would exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the
need to keep the 1976 deficit below $60 billion. This
bill is one of many being donsidered by the Congress that,
combined, would increase the deficit to $100 billion or
more. This bill authorizes brother spending of $3.3 billion
above my budget requests. Almost half of this added
spending would occur in fiscal year 1976. In addition
to its impact on 1976, this bill -- and the others
making their way through the Congress -- would add
substantially to spending and to Federal deficits in
1977 and later years.
FORD i LIBRARY GERALD
Congressional actions and inactions have already
added 3 billion to the 1975 deficit and 4.4 6t.
billion to the 1976 deficit.
- 2 -
H. R. 4481, by increasing Federal deficit borrowing,
would contribute to choking off the very economic growth
that it is intended to stimulate. Further, it is unlikely
that spending under this bill could occur soon enough to
accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment
is not likely to occur until well into 1976. An appreciable
N.)
amount of spending would continue in calendar year 1977.
Projects initiated under this bill will be very difficult
to stop. This additional spending comes at the wrong
time and would run the risk of fueling inflationary
pressures that are now subsiding.
this legislation
H.R. 4481 is the result of a process whereby the
Congress has taken a simple, straightforward, specific
Administration proposal for extending public service jobs
and providing summer ycuth employment and turned it into
a bill containing a host of provisions of extremely questionsble
uneven morit.
To help overcome the recession and high unemployment,
I proposed, and the Congress passed enacted, a major tax cut. / I
have also proposed an extension of unemployment compensa-
tion benefits, together with increases, which are included
in this bill for public service jobs and summer employment.
FORD & LIBRARY 07W33
- 3 -
Further stimulus is now r counter-productive. I am
determined to hold the line on the deficit for 1976 at
$60 billion.
The Nation does need a bill that will provide the
funds I recommended for immediate and temporary employ-
ment through public sector jobs and summer youth employment.
Student summer vacations are close at hand and I urge
the Congress to pass such a bill promptly.
Therefore, I must H valo this bill e
that Bind of a bill, tailered to meet the
problems at hand, is one on which the
Congress and I can agree
FORD & LIBRARY GERALD
THE WHITE HOUSE
WASHINGTON
May 22, 1975
MEMORANDUM FOR JAMES H. CAVANAUGH
FROM:
ROGER B. PORTER
RBP
SUBJECT:
DRAFT VETO MESSAGE ON H.R. 4481
Mr. Seidman has asked me to convey to you three specific
suggestions on the draft veto message on the Emergency
Employment Appropriation Act in addition to his general
feeling that the message is too long.
First, we should make the argument that H.R. 4481 is the
result of a process whereby the Congress has taken a
simple, straightforward, specific Administration proposal
for extending public service jobs and providing summer
youth employment and turned it into a bill containing a
host of provisions of extremely uneven merit. In short,
Congress has once again cluttered up a sensible Administra-
tion proposal.
Secondly he feels it inadvisable to specifically attack
each of the provisions for particular groups since our
case can be made more effectively in the aggregate.
Thirdly, and most importantly, what the message lacks is
an analysis of how many jobs are expected to be created
by the provisions in the bill, when these jobs will come
into being (how quickly), and the average cost to the tax-
payer of each additional job. Our suspicion is that such
an analysis would reveal that the great bulk of jobs which
may be created by the bill would be some time in coming on
stream, and, would not address our immediate unemployment
problems. One of the great liabilities of attempting to
stimulate the economy through such programs is that they
inevitably tend to have their impact too late.
SALE FORD LIBRARY
5/29
m &
Katee
27
REUD
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGION
LOG NO.
:
Date:
May 27, 1975
Time: 6:00pm
FOR ACTION: Mike Duval
CC (for information):
Jim Cavanaugh
Max Friedersdorf
Jack Marsh
Ken Lazarus
LWSeidman
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date: May 27
Time:
ASAP
SUBJECT:
Proclamation: Modifying Proclamation No. 3279, relating
to Imports of Petroleum and Petroleum Products, etc.
ACTION REQUESTED:
X
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
//
The attached proclamation was just received at the White
House and must go to the President tonight.
ob
gws
GERALD R
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
James H. Cave.
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 23, 1975
Time: 5im0pm
FOR ACTION: Paul Leach
CC (for information):
Max Friedersdorf
Jim Cavanaugh
Ken Lazarus
Robert Hartmann
Paul Theis
Jack Marsh
Jim Lynn
FROM THE STAFF SECRETARY
DUE: Date: May 26
Time:
12:30p.m.
SUBJECT:
Revised and shortened veto message - H.R. 4481
Emergency Employment Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johaston, Ground Floor West Wing
paka jernny
Tucomber
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
ASSISTANT DIRECTOR
OFFICE OF MANAGEMENT AND BUDGET
Judy Johnston
Here are ow surgestion
for modification of their
draft vets message Jim
Lynn has not yes reviewed,
Make ms Imber
FORD & LIBRARY GERALD
THE WHITE HOUSE
WASHINGTON
Suggesta Sug 19st in
chang 1 GERALD FORD
i LIBRARY
formal gm
THE WHITE HOUSE
WASHINGTON
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
MAX L. FRIEDERSDORF m.b.
SUBJECT:
Action Memorandum - Log No.
Revised and shortened veto message
H.R. 4481 Emergency Employment Appropriations
Act of 1975.
The Office of Legislative Affairs concurs with the agencies
that the President issue the revised veto message, deleting
the last sentence, to end on a positive note.
Attachments
FORD LIBRANT
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 23, 1975
Time: 5: 40pm
FOR ACTION: Paul Leach
cc (for information):
Max Friedersdorf
Jim Cavanaugh
Ken Lazarus
Robert Hartmann
Paul Theis
Jack Marsh
Jim Lynn
FROM THE STAFF SECRETARY
DUE: Date:
Time:
May 26
12:30p.m.
SUBJECT:
Revised and shortened veto message - H.R. 4481
Emergency Employment Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
No objection-- Ken Lazarus
FORD & LIBRARY GERALD
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
telephone the Sicif Sucretary hamedictely.
Govanaugh
the Propident
TO THE HOUSE OF REPRESENTATIVES
I return herewith without my approval, H.R. 4481, the
or
Emergency Employment Appropriation Act.
OF
Reducing the current high rate unemployment IS not the
THIS BILL IS NOT AN EFFECTIVE RESPONSE TO THE
(4) The problem
presented by this bill. We must and we will reduce
UNEMPLOYMENT PROBLEM.
The
WAPPROPRY
wrong
approad
unemployment. But This bill
Is the wrong approach to
FOR A NUMBER OF REASONS.
doing so for several reasons.
It
cymed
exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my decision
to sign the Tax Reduction Act, I stressed the need to keep the
1976 deficit below $60 billion. This bill is one of
combined
many being considered by the Congress that together, would
increase the deficit to $100 billion or more. This bill
authorizes spending of $3.3 billion above my budget requests.
would occur
lmost half of this added spending occurring in fiscal
year 1976. In addition to its impact on 1976, this bill - and
the others making their way through the Congress --- would add
substantially to spending and to Federal deficits in 1977 and
later years.
ESCALATED
FORD & LIBRARY GERALD
The increased deficits caused by this additional spending
would lead to extraordinary Federal demands on our financial
markets. These demands could deprive business firms of funds
needed for modernization and expansion of capacity. State and
local governments and prospective home buyers would have
increased difficulty borrowing necessary the funds, they need. Interest
AND
ING
rates would be driven up result in increased costs for
everyone.
- 2 -
In this way, H.R. 4481 would contribute to choking off
the very economic growth that it is intended to help stimulate.
Further, it is unlikely that spending under this bill could occur
soon enough to accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment is not
likely to occur until well into 1976, and appreciable amount
of spending would continue in calendar year 1977.
Once
projects
in tiated
under this bill are begun, they will be very difficult to stop.
This additional spending comes at the wrong time and would run
the risk of fueling inflationary pressures that are now sub-
siding.
To help overcome the recession and high unemployment, I
actedite
enacted
proposed and the Congress agreed on a major tax cut. I have
P
n
also proposed an extension of unemployment compensation
benefits, together with increases, which are included in this
bill for public service jobs and summer employment. Further
counter - productive.
stimulus is not needed now I am determined to hold the line
on the deficit for 1976 at $60 billion therefore I must veto
this bill.
would be
This bill is the wrong approach because it provides
wasteful additional funds and for delivental to costly economic programs stability. The
$2 billion request I have made for public service jobs and
summer youth employment meets the current problem by immediately providing
necessary,
immediate,
temporary employment.
By
and
In the guise of aid to the unemployed, this bill contains a
conglomeration of increases that are unneeded and expensive
GERALD FORD LIBRARY
These expenditure
will not be effective in producing immediate employment.
- 3 -
Among them are:
--
$440 million for the Federal Buildings Fund of the
This
General Services Administration, which would violate
the basic premise on which the Federal Buildings Fund
was created. The Fund was set up to finance real
property expenses from rental receipts. It is also
doubtful that n the funds could be used effectively in
a short time.
$385 million for Small Business Administration loans.
The Tax Reduction Act, which included reductions in
both corporate and personal income taxes and increased
investment tax credits, provides financial stimulus to
help small businesses recover from the recent drop in
the economy. The efforts of the Federal Reserve to
increase the growth of the money supply is causing a
resurgence in the availability of funds for small
FORD & LIBRARY
businesses.
Further, I believe that the Federal
Government should not and cannot fffectively assume
a large role in making individual credit allocation
decisions for small business financing The principal
responsibility for such decisions should be left with
the private sector.
This
-- $120 million for college work-study grants
which
is
because
unnecessary given student assistance funds now
available and becoming available in 1976.
This
-- $100 million for a payment to the Postal Service that
mahing the Postal service
would shift substantial postal costs from users of
the Postal Service to the general taxpayer and would
once more inject the Legislative Branch into decision-
- 4 -
-- $70 million for the work incentive program of HEW.
--- $66 million to purchase 18,000 vehicles for the
General Services Administration motor pool fleet, The
normally and more efficiently financed through agency-
user charges.
-- $30 million for Community Service Employment for Older
This
Americans not only duplicates comprehensive
manpower assistance activities but actually may reduce
the amount of manpower services State and local govern-
ments provide older workers.
They
-- An extra $45 million for summer youth employment which
is entirely unnecessary in view of the $413 million
requested and the substantial amounts being programmed
by States and localities.
this bill is the wrong approach because it provides
higher spending levels for a variety of programs and projects
of unequal merit which may be difficult to reduce
after
the economic situation has improved. Included in this category
are:
-- $642 million in appropriations and loan authority for
the Farmer's Home Administration.
--- $479 million for the Department of Commerce. Of this
amount, $375 million would be used in the Job
Opportunities Program of the Economic Development
FORD i LIBRARY GERALD
Administration. It is not yet known whether the
$125 million provided for this program in the Urgent
Supplemental Appropriations Act of last December can
- 5 -
be effectively used, let alone another $375 million.
Experience to date, has shown that the
program is extremely difficult and time-consuming to
administer. Previous efforts to use such long-range
development programs as anti-recession tools have not
been successful. Funds have not been applied quickly
enough to shorten significantly the period of recession
A ssistance often has. not greatly benefited MANY those areas
in need,
osts of generating temporary employ-
ment through such mechanisms have been high.
-- $333 million for public works projects of the Corps
of Engineers and Bureau of Reclamation.
In summary, this bill would bring about an undesirable
et
increase in the Federal deficit would expand programs that are
costly and ineffective in aiding the unemployed,
would
produce spending in the future when it is not expected to be
needed and, in fact, will be counterproductive $ For these
this bill
reasons, I am returning without my approval. The Nation
does
provides
need
a bill that includes the funds I recommended
for
providing
immediate and temporary employment through public
sector jobs and summer youth employment.
with
S
are
and
tudent summer vacations close at hand I urge the Congress to
pass such a bill promptly.
H
FORD i GERALD LIBRARY
THE WHITE HOUSE
CTION MEMORANDUM
WASHINGTON
LOG NO.:
Date: May 23, 1975
Time: 5:40pm
FOR ACTION: Paul Leach
CC (for information):
Max Friedersdorf
Jim Cavanaugh
Ken Lazarus
Robert Hartmann
Paul Theis
Jack Marsh
Bill Seidman
Jim Lynn
FROM THE STAFF SECRETARY
DUE: Date:
Time:
May 26'
12:30p m.
of
SUBJECT:
Revised and shortened veto message - H.R. 4481
Emergency Employment Appropriation Act, 1975
ACTION REQUESTED:
For Necessary Action
X For Your Recommendations
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
os - great sings revent
but stell meg ative.
LIBRARY GERALD R. FORD
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required moterial, please
telephone the Staff Secretary immediately.
Unwanaugh
the Procident
THE WHITE HOUSE
WASHINGTON
May 21, 1975
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
MAX L. FRIEDERSDORF
SUBJECT:
Action Memorandum - Log No.
Enrolled Bill H.R. 4481 - Emergency
Employment Appropriation Act, 1975
The Office of Legislative Affairs concurs with the agencies
that the
bill be vetoed.
Attachments
BRARY
6/4
Mr. J-
To add to file, plo.
Vitaed 5/28.
Thanks.
Katu
EXECUTIVE OFFICE OF THE PRESIDENT
3:557. STATE SEATIS UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
MAY 21 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 4481 - Emergency Employment Appropriation
Act, 1975
Sponsor - Representative Mahon (D), Texas
Last Day for Action:
May
1975
-
- Transmittal of a veto message prior to the
June 2, 1975
Congressional recess for Memorial Day is
recommended
Administration Enrolled Congressional
Appropriations:
Request
Bill
Increase
(In millions)
New budget authority
$ 2,043
$ 4,729
$ 2,686
Direct and insured loans
I
485
485
Liquidation of contract authority
--
92
92
Outlay Increases: FY 1975: $ 684 million
FY 1976: $1,540 million
Highlights:
FORD i LIBRARY GERALD
- With the exception of your requests of $1.6 billion for temporary
employment assistance, $413 million for summer youth employment, and
$5 million for the U.S. Railway Association, all appropriations in
this bill were unrequested.
- Almost half of the $3.3 billion provided by this bill over your request
would be spent in fiscal year 1976, making the $60 billion deficit
line difficult to hold.
- The bill contains a conglomeration of increases, some of which are
unneeded, or more costly than necessary, or will not produce immediate
employment, or will set new program levels which will be difficult to
reduce later.
Recommendation
I recommend that you veto the bill and issue a veto message before the
Congress recesses for Memorial Day.
Jan Director James T. Lynn Log
Attachment
EXECUTIVE OFFICE OF THE PRESIDENT
OREGO
OFFICE OF MANAGEMENT AND BUDGET
SEATES
WASHINGTON, D.C. 20503
MAY 2 1 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 4481 - Emergency Employment
Appropriation Act, 1975
Sponsor - Representative Mahon (D), Texas
Last Day for Action
June May 2, 1975 1975 - monday
.
Because the House plans to recess
at the end of business on May 22 and the Senate the following
day, transmittal of the veto message by May 22 is recommended.
Purpose
Appropriates a total of $4,729 million in budget authority,
$485 million in direct and insured loan authority, and $92 mil-
lion in appropriations to liquidate contract authority for the
Departments of Agriculture, Commerce, Interior, and Labor; the
Corps of Engineers; the General Services Administration; the
Small Business Administration; and other agencies.
Agency Recommendations
Office of Management and Budget
Disapproval (veto
statement attached)
Discussion
The economic and budgetary pressures the enrolled bill would
generate if it were approved are the bases for our veto
recommendation:
The appropriations and loan authority provided by the
enrolled bill are $3.3 billion above your request of
$2,043 million for emergency employment. Almost half of
the $3.3 billion of increased expenditures provided by
the bill over your request would be spent in fiscal year
1976, making the $60 billion deficit line difficult to
hold. Spending would continue in 1977 and later years
and would increase the projected deficits for those years.
FORD i LIBRARY
2
The increased deficits resulting from this additional
spending would lead to excessive Federal demands on finan-
cial markets, making borrowing more difficult and driving
interest rates up. Thus, this bill could reverse the very
economic growth that the Congress intended to help stimulate.
Many of the additional amounts in the bill for existing
programs will not quickly improve employment, but will
produce spending levels that will be difficult to reduce
later after the economic situation has improved. Spending
under the bill cannot occur soon enough to accelerate
the economic recovery that is expected to be well underway
by the end of this year, but it could occur late enough
into the recovery to fuel again the inflationary pressures
that are just now subsiding.
In addition to the $1.6 billion for public service employment,
the $413 million (increased by the Congress to $458 million)
for summer youth employment and the $5 million for the U.S.
Railway Association which you requested, the enrolled bill
contains appropriations of:
-- $642 million for the Farmer's Home Administration.
Although studies by the Department of Agriculture indi-
cate a demand for program assistance in excess of current
funding levels, the loan and grant programs increased
by the enrolled bill often require long lead times to
get underway and will therefore not provide immediate
employment assistance.
-- $506 million for the General Services Administration.
Included in this amount is $440 million for the Federal
Buildings Fund. This appropriation would violate the
basic premise of the Federal Buildings Fund: to operate
on a businesslike basis and finance real property
expenses out of proceeds of rental receipts. Language
included will exempt GSA from the requirement of repay-
ment with interest of appropriations to this Fund.
Further, it is doubtful that GSA could effectively use
the additional amounts. The remaining $66 million for
the General Supply Fund would purchase 18 thousand
vehicles, which would be used to replace approximately
one-fourth of the entire motor pool fleet. The appro-
priation would be uneconomical and wasteful, because
vehicle purchases are normally financed through agency
FORD i LIBRARY 07V839
user charges and at a slightly lower rate.
-- $479 million for the Department of Commerce. Of this
amount, $375 million would be used in the Job Opportunities
Program of the Economic Development Administration. It is
3
not yet known whether the $125 million provided for this
program in the Urgent Supplemental Appropriations Act
of December, 1974, can be effectively used, let alone
another $375 million. Experience to date, however, has
shown that the program is extremely difficult and time
consuming to administer. The remaining $104 million
would be used to accelerate the programs of the Economic
Development Administration and the Regional Action
Planning Commissions. Previous efforts to utilize long-
range development programs as anti-recession tools have
not been successful. Funds have not been utilized in
a timely enough manner to significantly shorten the period
of recession, assistance often has not greatly benefited
those areas most in need, and costs of generating temporary
employment through such mechanisms have been high.
-- $385 million for Small Business Administration loan pro-
grams. The recent tax reduction legislation, which
included reductions in both corporate and personal income
taxes and increased investment tax credits, provides the
financial stimulus to allow small businesses to recover
from the recent drop in the economy. Federal Reserve
efforts to expand the growth of the money supply are
causing a resurgence in the availability of capital for
small businesses. Further, there is the question of
whether the Federal government should--and can effectively--
assume a large role in making individual credit allocation
decisions for small business financing. It has been the
Administration's position that the principal responsibility
for such decisions should be left with the private sector.
-- $333 million for public works projects of the Corps of
Engineers and Bureau of Reclamation. These funds are to
be used to accelerate completion of projects now underway.
In addition to providing additional funds, approving the
bill would give added weight to an undesirable statement
of congressional intent contained in the conference report.
The report states that recreation development at projects
authorized prior to 1965 should be 100 per cent Federally-
funded. This is inconsistent both with the Administration's
cost-sharing policy on water resource projects in general
and with the law covering cost-sharing on projects auth-
FORD
orized after 1965.
-- $190 million for higher education and work incentives
GERALD
LIBRARY
under the Department of Health, Education, and Welfare.
The increase of $120 million for college work-study grants
is unnecessary at this time, given the student assistance
funds already appropriated and the expected 1976 funding
level. The funds for work incentives ($70 million) restore
a congressional reduction in last year's appropriation request.
4
-- $143 million for the Forest Service. These funds are
primarily for low priority items and may result in
completion of some projects (i.e., forest roads and trails
construction) in advance of need.
-- $115 million for the Soil Conservation Service of the
Department of Agriculture. Of the amount appropriated,
$106 million is to assist in the reduction of backlogs
in the watershed and flood prevention program.
-- $100 million for payment to the U.S. Postal Service. Under
the Postal Reorganization Act of 1970, Federal subsidies
are provided to the Postal Service for three specific
purposes: to cover public service costs, reimburse the
Postal Service for revenue foregone when carrying particu-
lar classes of mail at reduced rates, and for covering
liabilities of the former Post Office Department. To
provide funds as recommended in the bill would not conform
to the above statutory authorizations. Provision of these
funds would once more inject the legislative branch into
Postal decisionmaking and affect Postal management's
long-range planning efforts. It would once more subject
the Postal Service to the vagaries of the appropriation
process and establish a precedent for providing additional
forms of subsidy to assist the Postal Service in areas
not envisioned by the Reorganization Act. More importantly,
provision of this $100 million would shift a substantial
amount of postal costs from the users of the Postal Service
onto the general taxpayer.
-- $30 million for Community Service Employment for Older
Americans, that not only duplicates comprehensive manpower
assistance activities, but may actually reduce the amount of
manpower services State and local governments provide older
workers.
In sum, the bill contains a conglomeration of increases, some of
which are unneeded, more costly than necessary, will not produce
immediate employment, or will set new program levels which will
be difficult to reduce later.
Recommendation
You have warned that this bill would be vetoed if the enrolled
version coming to you for signature did not represent a significant
reduction from both the House and Senate versions. This enrolled
bill does not represent such a reduction. I recommend that you
veto the bill and issue a veto message (draft attached) before
the Congress recesses for Memorial Day.
James T. Lynn
Director
Attachment
TO THE HOUSE OF REPRESENTATIVES
I return herewith, without my approval, H.R. 4481, the
Emergency Employment Appropriation Act.
Reducing the current high rate of unemployment is not the
issue presented by this bill. We must and we will reduce
unemployment. This bill, however, is the wrong approach to
doing so for several reasons.
First, it will exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my decision
to sign the Tax Reduction Act, I stressed the need to keep the
1976 deficit at or below $60 billion. This bill is one of
many being considered by the Congress that, together, would
increase the deficit to $100 billion or more. This bill
authorizes spending of $3.3 billion above my budget requests,
with almost half of this added spending occurring in fiscal
year 1976. In addition to its impact on 1976, this bill -- and
the others making their way through the Congress -- would add
substantially to spending and to Federal deficits in 1977 and
later years.
The increased deficits caused by this additional spending
would lead to extraordinary Federal demands on our financial
markets. These demands could deprive business firms of funds
needed for modernization and expansion of capacity. State and
local governments and prospective home buyers would have
increased difficulty borrowing the funds they need. Interest
rates would be driven up, resulting in increased costs for
everyone.
- 2 -
In this way, H.R. 4481 would contribute to choking off
the very economic growth that it is intended to help stimulate.
Further, it is unlikely that spending under this bill could occur
soon enough to accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment is not
likely to occur until well into 1976 and an appreciable amount
of spending would continue in calendar year 1977. Once projects
under this bill are begun, they will be very difficult to stop.
This additional spending comes at the wrong time and would run
the risk of fueling inflationary pressures that are now sub-
siding.
To help overcome the recession and high unemployment, I
proposed and the Congress agreed on a major tax cut. I have
also proposed an extension of unemployment compensation
benefits, together with increases, which are included in this
bill for public service jobs and summer employment. Further
stimulus is not needed now. I am determined to hold the line
on the deficit for 1976 at $60 billion and therefore must veto
this bill.
Second, this bill is the wrong approach because it provides
additional funds for ineffective and costly programs. The
$2 billion request I have made for public service jobs and
summer youth employment meets the current problem by providing
necessary, immediate, temporary employment. By contrast, and
in the guise of aid to the unemployed, this bill contains a
conglomeration of increases that are unneeded and expensive,
and will not be effective in producing immediate employment.
- 3 -
Among them are:
-- $440 million for the Federal Buildings Fund of the
General Services Administration, which would violate
the basic premise on which the Federal Buildings Fund
was created. The Fund was set up to finance real
property expenses from rental receipts. It is also
doubtful that the funds could be used effectively in
a short time.
-- $385 million for Small Business Administration loans.
The Tax Reduction Act, which included reductions in
both corporate and personal income taxes and increased
investment tax credits, provides financial stimulus to
help small businesses recover from the recent drop in
the economy. The efforts of the Federal Reserve to
increase the growth of the money supply is causing a
resurgence in the availability of funds for small
businesses. Further, I believe that the Federal
Government should not -- and cannot effectively-- assume
a large role in making individual credit allocation
decisions for small business financing. The principal
responsibility for such decisions should be left with
the private sector.
-- $120 million for college work-study grants, which is
unnecessary, given student assistance funds now
available and becoming available in 1976.
-- $100 million for a payment to the Postal Service that
would shift substantial postal costs from users of
the Postal Service to the general taxpayer and would
once more inject the Legislative Branch into decision-
making in the Postal Service.
FORD GERALD & GERALD LIBRARY
- 4 -
-- $70 million for the work incentive program of HEW.
-- $66 million to purchase 18,000 vehicles for the
General Services Administration motor pool fleet
normally and more efficiently financed through agency
user charges.
-- $30 million for Community Service Employment for Older
Americans that not only duplicates comprehensive
manpower assistance activities but actually may reduce
the amount of manpower services State and local govern-
ments provide older workers.
-- An extra $45 million for summer youth employment which
is entirely unnecessary in view of the $413 million
requested and the substantial amounts being programmed
by States and localities.
Third, this bill is the wrong approach because it provides
higher spending levels for a variety of programs and projects
of unequal merit which may be difficult to reduce later, after
the economic situation has improved. Included in this category
are:
-- $642 million in appropriations and loan authority for
the Farmer's Home Administration.
-- $479 million for the Department of Commerce. Of this
amount, $375 million would be used in the Job
Opportunities Program of the Economic Development
Administration. It is not yet known whether the
$125 million provided for this program in the Urgent
Supplemental Appropriations Act of last December can
SERAID R. FORD LIBRABY
- 5 -
be effectively used, let alone another $375 million.
Experience to date, however, has shown that the
program is extremely difficult and time consuming to
administer. Previous efforts to use such long-range
development programs as anti-recession tools have not
been successful. Funds have not been applied quickly
enough to shorten significantly the period of recession,
assistance often has not greatly benefited those areas
most in need, and costs of generating temporary employ-
ment through such mechanisms have been high.
-- $333 million for public works projects of the Corps
of Engineers and Bureau of Reclamation.
In summary, this bill would bring about an undesirable
increase in the Federal deficit, would expand programs that are
costly and ineffective in aiding the unemployed, and would
produce spending in the future when it is not expected to be
needed and, in fact, will be counterproductive. For these
reasons, I am returning it without my approval. The Nation
needs, however, a bill that includes the funds I recommended
for providing immediate and temporary employment through public
sector jobs and summer youth employment. Particularly with
student summer vacations close at hand, I urge the Congress to
pass such a bill promptly.
P..
FORD
is
LIBRARY
THE WHITE HOUSE
May , 1975
TO THE HOUSE OF REPRESENTATIVES:
I return without my approval, H.R. 4481, the
Emergency Employment Appropriation Act.
This bill is not an effective response to the
unemployment problem. We must reduce unemployment.
But this bill is the wrong approach to the problem
for a number of reasons.
It would exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the
need to keep the 1976 deficit below $60 billion. This
bill is one of many being considered by the Congress that,
combined, would increase the deficit to $100 billion or
more. This bill authorizes spending of $3.3 billion
above my budget requests. Almost half of this added
spending would occur in fiscal year 1976. In addition
to its impact on 1976, this bill -- and the others
making their way through the Congress -- would add
substantially to spending and to Federal deficits in
1977 and later years.
FORD LIBRABY
- 2 -
H. R. 4481, by increasing Federal deficit borrowing,
would contribute to choking off the very economic growth
that it is intended to stimulate. Further, it is unlikely
that spending under this bill could occur soon enough to
accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment
is not likely to occur until well into 1976. An appreciable
amount of spending would continue in calendar year 1977.
Projects initiated under this bill will be very difficult
to stop. This additional spending comes at the wrong
time and would run the risk of fueling inflationary
pressures that are now subsiding.
H.R. 4481 is the result of a process whereby the
Congress has taken a simple, straightforward, specific
Administration proposal for extending public service jobs
and providing summer youth employment and turned it into
a bill containing a host of provisions of extremely
uneven merit.
To help overcome the recession and high unemployment,
I proposed, and the Congress enacted, a major tax cut. I
have also proposed an extension of unemployment compensa-
tion benefits, together with increases, which are included
in this bill for public service jobs and summer employment.
- 3 -
Further stimulus is now counter-productive. I am
determined to hold the line on the deficit for 1976 at
$60 billion.
The Nation does need a bill that will provide the
funds I recommended for immediate and temporary employ-
ment through public sector jobs and summer youth employment.
Student summer vacations are close at hand and I urge
the Congress to pass such a bill promptly.
Therefore, I must veto this bill.
THE WHITE HOUSE
WASHINGTON
May 23, 1975
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
DICK DUNHAM Di-
Attached is the package on the veto
message on H.R. 4481. Since I have made
a number of deletions and insertions as a
result of comments from various people, it
perhaps should be staffed around again.
Pages 3 through 6 of the original draft
message could also be included in the
package for the President's information
and for possible use by Ron Nessen in
discussing some of the specific undesirable
items in the bill.
Attachment
TO THE HOUSE OF REPRESENTATIVES:
I return without my approval, H.R. 4481, the
Emergency Employment Appropriation Act.
This bill is not an effective response to the
unemployment problem. We must reduce unemployment.
But this bill is the wrong approach to the prob-
lem for a number of reasons.
It would exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the
need to keep the 1976 deficit below $60 billion. This
bill is one of many being considered by the Congress
that, combined, would increase the deficit to $100
billion or more. This bill authorizes spending of $3.3
billion above my budget requests. Almost half of this
added spending would occur in fiscal year 1976. In
addition to its impact on 1976, this bill -- and the
others making their way through the Congress -- would
add substantially to spending and to Federal deficits
in 1977 and later years.
The increased deficits escalated by this additional
spending would lead to extraordinary Federal demands on
our financial markets. These demands could deprive
business firms of funds needed for modernization and
2
expansion of capacity. State and local governments and
prospective home buyers would have increased difficulty
borrowing necessary funds. Interest rates would be
driven up, resulting in increased costs for everyone
Federal
defect
In this way, H.R. 4481 would contribute to choking
off the very economic growth that it is intended to
stimulate. Further, it is unlikely that spending under
this bill could occur soon enough to accelerate the
economic recovery that is generally expected to be well
underway by the end of this year. The heaviest impact
that this bill would have on employment is not likely
to occur until well into 1976. An appreciable amount
of spending would continue in calendar year 1977. Proj-
ects initiated under this bill will be very difficult
to stop. This additional spending comes at the wrong
time and would run the risk of fueling inflationary
pressures that are now subsiding.
Insel A
To help overcome the recession and high unemployment,
I proposed and the Congress enacted, a major tax cut. I
have also proposed an extension of unemployment compensa-
tion benefits, together with increases, which are included
in this bill for public service jobs and summer employment.
Further stimulus is now counter-productive. I am deter-
mined to hold the line on the deficit for 1976 at $60
billion. Therefore, I must veto this bill.
3
This bill would be wasteful and detrimental to
economic stability. The $2 billion request I have made
for public service jobs and summer youth employment meets
the current problem by immediately providing temporary
employment. In the guise of aid to the unemployed, this
bill contains a conglomeration of increases that are
unneeded and expensive. These expenditures will not be
effective in producing immediate employment. Among them
are:
-- $440 million for the Federal Buildings Fund
of the General Services Administration. This
would violate the basic premise on which the
Federal Buildings Fund was created. The Fund
was set up to finance real property expenses
from rental receipts. It is also doubtful
whether the funds could be used effectively
in a short time.
-- $385 million for Small Business Administration
loans. The Tax Reduction Act, which included
reductions in both corporate and personal in-
come taxes and increased investment tax credits,
provides financial stimulus to help small
businesses recover from the recent drop in the
economy. The efforts of the Federal Reserve
4
to increase the growth of the money supply
is causing a resurgence in the availability
of funds for small businesses.
-- $120 million for college work-study grants.
This is unnecessary because of student
assistance funds now available and becoming
available in 1976.
-- $100 million for a payment to the Postal Service.
This would shift substantial postal costs from
users of the Postal Service to the general tax-
payer and would once more inject the Legislative
Branch into decision-making in the Postal Service.
-- $70 million for the work incentive program
of HEW.
-- $66 million to purchase 18,000 vehicles for
the General Services Administration motor pool
fleet. This is normally and more efficiently
financed through agency-user charges.
-- $30 million for Community Service Employment
for Older Americans. This not only duplicates
comprehensive manpower assistance activities but
actually may reduce the amount of manpower
services State and local governments provide
older workers.
5
-- An extra $45 million for summer youth
employment. This is entirely unnecessary
in view of the $413 million requested and
the substantial amounts being programmed
by States and localities.
This bill is the wrong approach because it provides
higher spending levels for a variety of programs and
projects of unequal merit which may be difficult to re-
duce after the economic situation has improved. Included
in this category are:
-- $642 million in appropriations and loan authority
for the Farmer's Home Administration.
-- $479 million for the Department of Commerce.
Of this amount, $375 million would be used in
the Job Opportunities Program of the Economic
Development Administration. It is not yet known
whether the $125 million provided for this pro-
gram in the Urgent Supplemental Appropriations
Act of last December can be effectively used,
let alone another $375 million. Experience to
date has shown that the program is extremely
difficult and time-consuming to administer.
Previous efforts to use such long-range develop-
ment programs as anti-recession tools have not
been successful. Funds have not been applied
6
quickly enough to significantly shorten the
period of recession. Assistance has not
greatly benefited many areas in need. Costs
of generating temporary employment through
such mechanisms have been high.
-- $333 million for public works projects of
the Corps of Engineers and Bureau of
Reclamation.
In summary, this bill would bring about an undesirable
increase in the Federal deficit. It would expand programs
that are costly and ineffective in aiding the unemployed.
It would produce spending in the future when it is not
expected to be needed and, in fact, will be counter-
productive.
For these reasons, I am returning this bill without
my approval. The Nation does need a bill that will provide
the funds I recommended for immediate and temporary employ-
ment through public sector jobs and summer youth employment.
Student summer vacations are close at hand and I urge the
Congress to pass such a bill promptly.
TO THE HOUSE OF REPRESENTATIVES:
I return without my approval, H.R. 4481, the Emergency
Employment Appropriation Act.
Barlier this year, I asked the Congress for legislation
to deal with the Nation's most immediate employment problems
through an extension of public service jobs and a program of
summer youth employment.
The Congress has taken this simple, straightforward and
specific proposal and turned it into a bill containing a host
of provisions of questionable value.
This bill, as presented to me, is not an effective
response to the unemployment problem. It would exacerbate
both budgetary and economic pressures, and its chief impact
would be felt long after our current unemployment problems
are expected to subside.
The bill authorizes spending of $3.3 billion above my
budget requests. Almost half of this added spending would
occur in fiscal 1976 and an appreciable amount of spending
would continue in calendar year 1977. Economic recovery is
expected to be well underway by the end of 1975, and the
accelerative influences of this bill would come much too
late to give impetus to this recovery. Instead, those in-
fluences would run the risk of contributing to a new round
of inflation later on.
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the need
to keep the 1976 deficit below $60 billion. This bill is
one of many being considered by the Congress that, combined,
would increase the deficit to $100 billion or more. Already,
Congressional actions and inactions have added $7.3 billion
to the 1975 deficit and $4.4 billion to the 1976 deficit.
2
Such an increase in the Federal budget deficit would
lead to an increase in Federal borrowing from private
financial markets. These heavy Federal demands for capital
could deprive business firms of funds needed for moderniza-
tion and expansion of capacity.
Thus, H.R. 4481 would contribute to choking off the
very economic growth it is intended to stimulate.
To help overcome the recession and high unemployment,
I have proposed, and the Congress has enacted, a major tax
cut. I have also proposed an extension of unemployment com-
pensation benefits, together with increases, which are
included in this bill for public service jobs and summer
employment.
Further stimulus would hurt more than it would help our
economy in the long run. H.R. 4481 provides for too much
stimulus, too late, and I must therefore veto the bill.
The need remains, however, for a bill that will provide
the funds I recommended for immediate and temporary employment
through the public sector and summer youth jobs. Since
student summer vacations are close at hand, I urge the Congress
to pass such a bill as quickly as possible.
THE WHITE HOUSE,
TO THE HOUSE OF REPRESENTATIVES
I return herewith, without my approval, H.R. 4481, the
Emergency Employment Appropriation Act.
Reducing the current high rate of unemployment is not the
issue presented by this bill. We must and we will reduce
unemployment. This bill, however, is the wrong approach to
doing so for several reasons.
First, it will exacerbate budgetary and economic pressures.
In my address to the Nation on March 29, announcing my decision
to sign the Tax Reduction Act, I stressed the need to keep the
1976 deficit at or below $60 billion. This bill is one of
many being considered by the Congress that, together, would
increase the deficit to $100 billion or more. This bill
authorizes spending of $3.3 billion above my budget requests,
with almost half of this added spending occurring in fiscal
year 1976. In addition to its impact on 1976, this bill -- and
the others making their way through the Congress -- would add
substantially to spending and to Federal deficits in 1977 and
later years.
The increased deficits caused by this additional spending
would lead to extraordinary Federal demands on our financial
markets. These demands could deprive business firms of funds
needed for modernization and expansion of capacity. State and
local governments and prospective home buyers would have
increased difficulty borrowing the funds they need. Interest
rates would be driven up, resulting in increased costs for
everyone.
- 2 -
In this way, H.R. 4481 would contribute to choking off
the very economic growth that it is intended to help stimulate.
Further, it is unlikely that spending under this bill could occur
soon enough to accelerate the economic recovery that is generally
expected to be well underway by the end of this year. The
heaviest impact that this bill would have on employment is not
likely to occur until well into 1976 and an appreciable amount
of spending would continue in calendar year 1977. Once projects
under this bill are begun, they will be very difficult to stop.
This additional spending comes at the wrong time and would run
the risk of fueling inflationary pressures that are now sub-
siding.
To help overcome the recession and high unemployment, I
proposed and the Congress agreed on a major tax cut. I have
also proposed an extension of unemployment compensation
benefits, together with increases, which are included in this
bill for public service jobs and summer employment. Further
stimulus is not needed now. I am determined to hold the line
on the deficit for 1976 at $60 billion and therefore must veto
this bill.
Second, this bill is the wrong approach because it provides
additional funds for ineffective and costly programs. The
$2 billion request I have made for public service jobs and
summer youth employment meets the current problem by providing
necessary, immediate, temporary employment. By contrast, and
in the guise of aid to the unemployed, this bill contains a
conglomeration of increases that are unneeded and expensive,
and will not be effective in producing immediate employment.
- 3 -
Among them are:
-- $440 million for the Federal Buildings Fund of the
General Services Administration, which would violate
the basic premise on which the Federal Buildings Fund
was created. The Fund was set up to finance real
property expenses from rental receipts. It is also
doubtful that the funds could be used effectively in
a short time.
-- $385 million for Small Business Administration loans.
The Tax Reduction Act, which included reductions in
both corporate and personal income taxes and increased
investment tax credits, provides financial stimulus to
help small businesses recover from the recent drop in
the economy. The efforts of the Federal Reserve to
increase the growth of the money supply is causing a
resurgence in the availability of funds for small
businesses. ( Further, I believe that the Federal
Government should not -- and cannot effectively-- assume
a large role in making individual credit allocation
decisions for small business financing. The principal
responsibility for such decisions should be left with
the private sector.
-- $120 million for college work-study grants, which is
unnecessary, given student assistance funds now
available and becoming available in 1976.
-- $100 million for a payment to the Postal Service that
would shift substantial postal costs from users of
the Postal Service to the general taxpayer and would
once more inject the Legislative Branch into decision-
making in the Postal Service.
- 4 -
-- $70 million for the work incentive program of HEW.
-- $66 million to purchase 18,000 vehicles for the
General Services Administration motor pool fleet
normally and more efficiently financed through agency
user charges.
-- $30 million for Community Service Employment for Older
Americans that not only duplicates comprehensive
manpower assistance activities but actually may reduce
the amount of manpower services State and local govern-
ments provide older workers.
-- An extra $45 million for summer youth employment which
is entirely unnecessary in view of the $413 million
requested and the substantial amounts being programmed
by States and localities.
Third, this bill is the wrong approach because it provides
higher spending levels for a variety of programs and projects
of unequal merit which may be difficult to reduce later, after
the economic situation has improved. Included in this category
are:
-- $642 million in appropriations and loan authority for
the Farmer's Home Administration.
-- $479 million for the Department of Commerce. Of this
amount, $375 million would be used in the Job
Opportunities Program of the Economic Development
Administration. It is not yet known whether the
$125 million provided for this program in the Urgent
Supplemental Appropriations Act of last December can
- 5 -
be effectively used, let alone another $375 million.
Experience to date, however, has shown that the
program is extremely difficult and time consuming to
administer. Previous efforts to use such long-range
development programs as anti-recession tools have not
been successful. Funds have not been applied quickly
enough to shorten significantly the period of recession,
assistance often has not greatly benefited those areas
most in need, and costs of generating temporary employ-
ment through such mechanisms have been high.
-- $333 million for public works projects of the Corps
of Engineers and Bureau of Reclamation.
In summary, this bill would bring about an undesirable
increase in the Federal deficit, would expand programs that are
costly and ineffective in aiding the unemployed, and would
produce spending in the future when it is not expected to be
needed and, in fact, will be counterproductive. For these
reasons, I am returning it without my approval. The Nation
needs, however, a bill that includes the funds I recommended
for providing immediate and temporary employment through public
sector jobs and summer youth employment. Particularly with
student summer vacations close at hand, I urge the Congress to
pass such a bill promptly.
THE WHITE HOUSE
May , 1975
se THE HOURN of
I return without my approval, U.R. 1401, the Beargency
Employment Appropriation Act.
Earlier this year, I asked He Congres: for
On
I proposed legislation to deal with the
Nation's most immediate employment problems through an ex-
tension of public service jobs and a program of summer
youth employment.
tahn the simple, straight forward and specific proposal
The Congress has responded with a bill that not only
and turned it its a 6111 host of provisions of questionable value
needlessly increases the spending levels for these programs,
but-adds several very costly and extraneous provisions which
were not requested and are not needed.
This bill, as presented to me, is not an effective
response to the unemployment problem. It would exacerbate
both budgetary and economic pressures, and its chief impact
would be felt long after our current unemployment problems
are expected to subside.
The bill authorizes spending of $3.3 billion above my
budget requests. Almost half of this added spending would
occur in fiscal 1976 and an appreciable amount of spending
would continue in calendar year 1977. Economic recovery is
expected to be well underway by the end of 1975, and the
accelerative influences of this bill would come much too
late to give impetus to this recovery. Instead, those in-
fluences would run the risk of contributing to a new round
of inflation later on.
In my address to the Nation on March 29, announcing my
decision to sign the Tax Reduction Act, I stressed the need
to keep the 1976 deficit below $60 billion. This bill is
one of many being considered by the Congress that, combined,
would increase the deficit to $100 billion or more. Already,
Congressional actions and inactions have added $7.3 billion
to the 1975 deficit and $4.4 billion to the 1976 deficit.
Such an increase in the Codern? burlent Gelt vold
incle to 11 increase in Federal bourowing
financial markets. Whose lumy Yedowal for covital
could deprive business firms of funds needed for modemina-
tion and expansion of capacity,
Thus, N.R. 4431 would contribute to cheking off the
very economic growth it is intended to stimulate.
To help overcome the recession and high unemployment,
I have proposed, and the Congress has enacted, a major tax
out. I have also proposed an extension of unemployment com-
pensation benefits, together with increases, which are
included in this bill for public service jobs and summer
employment.
Further stimulus would hurt more than it would help our
economy in the long run. H.R. 4481 provides for too much
stimulus, too late, and I must therefore veto the bill.
The need remains, however, for a bill that will provide
the funds I recommended for immediate and temporary employment
since
through the public sector and summer youth jobs. Student
summer vacations are close at hand and I urge the Congress
to pass such a bill as quickly as possible.
GERALO FORD LIBRARY
THE WHITE HOUSE,
have
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odded 87. 3 hellim to The 1975 defect and $4.4
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got
In my address to the Nation on March 29, announcing
my decision to sign the Tax Reduction Act, I stressed the
need to keep the 1976 deficit below $60 billion. This bill
is one of many being considered by the Congress that, combined,
would increase the deficit to $100 billion or more.
Such an increase in the Federal budget deficit would
lead to an increase in Federal borrowing from private
financial markets. These heavy Federal
demands for capital
modernization could and expansion of capacity the
deprive business firms of funds needed for
funds from sorrings deformts 1 needer for
Thus, H. R. 4481 would contribute directly to choking
off the very economic growth it isp intended to stimulate.
To help overcome the recession and high unemployment,
I have proposed, and the Congress has enacted, a major
an
tax cut. I have also proposed, extension and increased levels
together with increases
of unemployment compensation benefits, which are included
in this bill for public service jobs and summer employment.
that
Further stimulus would hurt more than it would help
our economy in the long run. H. R. 4481 provides for too
much stimulus, too late, and I must therefore veto the bill.
The need remains, however, for a bill that will provide
the funds I recommended for immediate and temporary employment
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through the public sector and summer youth jobs. I urge
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FORD & LIBRARY 076839