Ask the Scholar

{
    "localId": "6283049",
    "label": "FY 1977 - 09/18/75 - Budget Reduction Proposals (2)",
    "core": "doc",
    "dtoType": "document",
    "citationUrl": "https://catalog.archives.gov/id/6283049"
}

{
    "id": "6283049",
    "sourceUrl": "https://catalog.archives.gov/id/6283049",
    "contentType": "document",
    "title": "FY 1977 - 09/18/75 - Budget Reduction Proposals (2)",
    "citationUrl": "https://catalog.archives.gov/id/6283049",
    "collections": [
        "White House Special Files Unit Files",
        "Budget Review Decision Papers"
    ],
    "subjects": [
        "Federal budget",
        "Federal budget deficit"
    ],
    "iiifBase": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/49/2830/6283049/content/library/document/0010/6283049.pdf",
    "thumbnailUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/49/2830/6283049/content/library/document/0010/6283049.pdf",
    "largeImageUrl": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/49/2830/6283049/content/library/document/0010/6283049.pdf",
    "imageCount": 1,
    "hasImages": true,
    "source": "import",
    "hasTranscription": false
}

{
    "url": "https://catalog.archives.gov/id/6283049",
    "naId": 6283049,
    "coverageEndDate": {
        "logicalDate": "1975-09-30",
        "month": 9,
        "year": 1975
    },
    "coverageStartDate": {
        "logicalDate": "1975-09-01",
        "month": 9,
        "year": 1975
    },
    "levelOfDescription": "fileUnit",
    "recordType": "description",
    "ocrSource": "nara-archive"
}

{
    "seq": 1,
    "pageIndex": 0,
    "type": "document",
    "url": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/49/2830/6283049/content/library/document/0010/6283049.pdf",
    "mediaId": "b45eb79d4478c493",
    "ocrText": "The original documents are located in Box 9, folder \"FY 1977 - 9/18/75, Budget Reduction\nProposals (2)\" of the White House Special Files Unit Files at the Gerald R. Ford\nPresidential Library.\nCopyright Notice\nThe copyright law of the United States (Title 17, United States Code) governs the making of\nphotocopies or other reproductions of copyrighted material. Gerald Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain. The copyrights to materials written by other individuals or organizations are presumed to\nremain with them. If you think any of the information displayed in the PDF is subject to a valid\ncopyright claim, please contact the Gerald R. Ford Presidential Library.\nDigitized from Box 9 of the White House Special Files Unit Files at the Gerald R. Ford Presidential Library\nTHE PRESIDENT HAS SEEN\nSummary Information\nOutlay Reductions\nCURRENT BUDGET OUTLOOK\n(in billions of dollars)\n1976\n1977\nBase estimate:\nOutlays\n370.8\n419.1\nReceipts\n292.3\n351.4\nDeficit\n-78.5\n-67.7\nSuggested changes:\nOutlays\n-1.4 -23.5\nReceipts:\nRelatively desirable increases\n---\n2.4\nOffsetting economic effects of all proposals\n---\n-4.0\nOutlays\n369.4\n395.5\nReceipts\n292.3\n349.8\nDeficit\n-77.1\n-45.7\nGERALD FORD LIBRAS,\nSeptember 18, 1975\n1977 BUDGET OUTLAY REDUCTIONS\n(Dollars in millions)\n1976\n1977\nRevised\n1978 Outlay\nCurrent\nSuggested\nRevised\nCurrent\nSuggested\nPlanning\nEffect of\nAgency\nEstimate\nReductions\nEstimate\nEstimate\nReductions\nGuidance\nReductions\nCivilian Programs:\nAgriculture\n14,685\n-640\n14,045\n14,767\n-2,815\n11,952\n-2,970\nCommerce\n1,789\nI\n1,789\n2,239\n-11\n2,228\n----\nCorps of Engineers\n1,997\n-24\n1,973\n2,122\n-207\n1,915\n-407\nHEW\n127,089\n-32\n127,057\n142,798\n-9,018\n133,780\n-10,467\nHUD\n5,808\n-15\n5,793\n8,723\n-488\n8,235\n-541\nInterior\n2,469\n-30\n2,439\n2,186\n-189\n1,997\n-144\nJustice\n2,253\n-6\n2,247\n2,309\n-100\n2,209\n-38\nLabor\n26,072\n-57\n26,015\n24,801\n-783\n24,018\n-3,023\nState\n1,242\n-14\n1,228\n1,144\n-54\n1,100\n-24\nTransportation\n12,075\n--\n12,075\n12,950\n-230\n12,720\n-230\nTreasury\n46,592\n---\n45,592\n55,614\n-1,168\n54,446\n-73\nERDA\n4,059\n--\n4,059\n5,070\n-30\n5,040\nI\nEPA\n3,185\n--\n3,185\n4,864\n-403\n4,461\n-803\nGSA\n14\n--\n14\n173\n-753\n-580\n-430\nNASA\n3,498\n-77\n3,421\n3,805\n-250\n3,555\n-143\nVA\n18,167\n-\n18,167\n17,704\n-1,202\n16,502\n-1,293\nCSC\n8,712\n--\n8,712\n10,358\n-312\n10,046\n-339\nExport-Import Bank\n(1,700)\n(-65)\n(1,635)\n1,700\n-390\n1,310\n-1,170\nNSF\n720\n-12\n708\n775\n-50\n725\n-69\nRRB\n3,443\n|\n3,443\n3,567\n-110\n3,457\n-110\nTVA\n781\n|\n781\n820\n-25\n795\n-1\nForeign Economic Assistance\n2,554\n--\n2,554\n3,811\n-43\n3,768\n-68\nMilitary Programs:\nDepartment of Defense\n91,800\n-505\n91,295\n98,765\n-5,765\n93,000\n-1,105\nMilitary Assistance\n1,238\nI\n1,238\n1,708\n-26\n1,682\n-33\nGERALD\nR.\nFORD\n1976\n1977\nRevised\n1978 Outlay\nCurrent Suggested Revised Current Suggested Planning Effect of\nAgency\nEstimate\nReductions\nEstimate\nEstimate\nReductions\nGuidance\nReductions\nAll other agencies\n6,404\n-\n6,404\n6,261\n-71\n6,190\n---\nAllowances:\nPay adjustment\n550\n--\n550\n2,600\n-1,050\n1,550\n--\nContingencies\n400\n-\n400\n2,000\n--\n2,000\n----\nEnergy (rebate) payments\n750\n-\n750\n1,000\n--\n1,000\n--\nThreatened Congressional add-ons\n2,500 2/\n-\n2,500\n2/\n5,250\n3/\n--\n5,250 3/\n-\nUndistributed Offsetting Receipts:\nOCS Receipts\n-8,000\n-\n-8,000\n-8,000\n--\n-8,000\n-\nOther\n-12,057\n--\n-12,057\n-12,804\n--\n-12,804\n-\nTotal\n370,789\n-1,412\n369,377\n419,090\n-25,543\n393,547\n-23,481\nMemorandum:\nAssume slower phase-in\n2,000\n2,000\nTotal\n370,789\n-1,412\n369,377\n419,090\n-23,543\n395,547\n-23,481\nAssumes new budget authority at the same level as in FY 1976.\n2/\nMiddle point of $2-3 billion range.\n3/ Middle point of $4.5-6 billion range.\nGERALD LISEARY FORD\nAGRI CULTURE\nDepartment or Agriculture\n1977 Outlay Reductions\n(In millions of $)\nRevised\nPlanning\nCurrent\nSuggested\nplanning\nProgram\nguidance\nAdjustment\nestimate\nreduction\nguidance\nFood stamp program\n6919\n--\n6919\n1335\n5584\nChild nutrition program\n1900\n820\n2720\n1110\n1610\nCCC price support and\nrelated programs\n1229\n--\n1229\n250\n979\nConservation and\nrelated programs\n620\n--\n620\n50\n570\nRural development & housing\nprograms\n840\n--\n840\n50\n790\nPublic Law 480\n1042\n---\n1042\n:\n1042\nResearch, regulatory and\nextension\n974\nI\n974\n--\n974\nForestry\n832\n|\n832\n|\n832\nOther\n270\n--\n270\n:\n270\nLess receipts\n-679\n--\n-679\n--\n-679\nEmployment reduction\nXX\nXX\nXX\n20\n-20\nTOTAL\n13947\n820\n14767\n2815\n11952\nNOTE: If, as is likely, the Congress restores programs proposed for termination\nin the 1976 budget, 1977 outlays would be increased by about $250 million.\nGERALD\nA.\nFORD\nLIBRARY\nSummary of Outlay Reductions (Part I)\nDepartment of Agriculture\n(dollars in millions)\nDate: Sept. 5, 1975\nEffect on outlays in\n1976\n1977\n1978\nA. 1977 planning guidance\nXXX\n13,947\nXXX\nAdjustments:\nCongressional inaction,\nChild nutrition\n820\nXXX\nXXX\nCurrent estimate\n14685\n14,767\nXXX\nB. Suggested program reductions:\nFood Stamps (4 items) :\nCurrent estimate\n6800\n6919\n7200\nOMB recommendation\n6260\n5584\n6025\nSuggested reduction\n540\n1335\n1175\nChild Nutrition (2 items) :\nCurrent estimate\n2520\n2720\n3115\nOMB recommendation\n2520\n1610\n1740\nSuggested reduction\n1110\n1375\nTobacco Price Support:\nCurrent estimate\n89\n102\n128\nOMB recommendation\n89\n52\n78\nSuggested reduction\n50\n50\nPeanut Price Support:\nCurrent estimate\n620\n587\n670\nOMB recommendation\n520\n387\n420\nSuggested reduction\n100\n200\n250\nEffect on outlays in\n1976\n1977\n1978\nTechnical Assistance:\nCurrent estimate\n201\n200\n200\nOMB recommendation\n201\n150\n150\nSuggested reduction\n50\n50\nWater and Sewer Grants:\nCurrent estimate\n66\n70\n200\nOMB recormendation\n66\n20\n150\nSuggested reduction\n--\n50\n50\nEmployment reduction\n20\n20\nTotal suggested reduction\n640\n2815\n2970\nRevised planning guidance and\nrelated 1976 amount\n14045\n11952\nGERALD\nR.FORD\nFORD\nLIBRAR\n1977 Outlay Reductions (Part II)\nUSDA/Food Stamps\n(dollars in millions)\nDate:\n9/5/75\n/\n/\nappropriation request\ndeferral action\n/XX\n/\nother administration action\nrescission action\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n6,800\n6,800\n6,900\n6,900\nXXX\n7,200\nOMB recommendation\n6,550\n6,550\n6,300\n6,300\nXXX\n6,600\nSuggested reduction\n-250\n-250\n-600\n-600\nXXX\n-600\nActions required:\nAssuming that the legislative prohibitions on changing food stamp regulation lapse on December 31, 1975, amend current\nregulations so that selected itemized deductions (i.e., shelter and child support) would not be allowed in excess\nof a specific amount; eliminate deductions for education, pension and union dues, and limit medical deductions to\ncosts in excess of a percentage of income.\nProgram impact:\nThis proposal would eliminate from participation or reduce the benefits of some households with relatively high\ngross incomes and large shelter expenditures. Depending on the shelter deduction limit assumed, program costs\ncould be reduced $500-$700 million.\nOther consideration:\nChanges of this sort are now being considered by the Domestic Council Task Group.\nGERALD\n3.\nFORD\n\"additive with other food stamp issues\n1977 Outlay Reductions (Part II)\nUSDA/Food Stamps\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\n/\nrescission action\nX\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n6,800\n6,800\n6,900\n6,900\nXXX\n7,200\nOMB recommendation\n6,660\n6,660\n6,625\n6,625\nXXX\n6,925\nSuggested reduction\n-140\n-140\n-275\n-275\nXXX\n-275\nActions required:\nResubmit proposed legislation which would make SSI. & public assistance recipients eligible for Food Stamp benefit\nonly if they qualify under Food Stamp income and assets test.\nProgram impact:\nThis proposal would reduce Food Stamp participation by approximately 1.2 million. Program costs would\ndecrease $250-300 million. Reduced participation would impact elderly households.\nOther consideration:\nChanges of this sort are now being considered by the Domestic Council Task Group.\nBERALD YORK\n1977 Outlay Reductions (Part II)\nUSDA/Food Stamps\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\n/\ndeferral action\nX\nother administration action\n/\n/\nrescission action\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n6,800\n6,800\n6,900\n6,900\nXXX\n7,200\nOMB recommendation\n6,800\n6,800\n6,600\n6,600\nXXX\n6,800\nSuggested reduction\n-0-\n-0-\n-300\n-300\nXXX\n-400\nActions required:\nAdministrately implement an allotment schedule based on the current Economy Food Plan and providing individualized\ncomputation of coupon allotment for all recipient households: and a partial hold-harmless of current participants:\nRegulations along these lines are in process.\nProgram impact:\nWould decrease the cost of bonus coupons by $300 million annually. The proposal would reduce allotment\nlevels for about two thirds of participating households. The major impact would be on the one and two-\nperson households. This proposal would incur an increase in Administrative costs (certification and issuance).\nOther consideration:\nSEFALD FORD\n* This proposal is related but distinct from the Domestic Council effort.\n1977 Outlay Reductions (Part II)\nUSDA/Food Stamps\n(dollars in millions)\nDate:\n9/5/75\n/\n/\nappropriation request\n/\n/\ndeferral action\n/\n/\nother administration action\n/\n/\nrescission action\nX\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n6,800\n6,800\n6,900\n6,900\nXXX\nXXX\nOMB recommendation\n6,800\n6,800\n6,740\n6,740\nXXX\nXXX\nSuggested reduction\n--\n--\n160,\n160\nXXX\nXXX\nActions required:\nLimit cost-of-living increases to 60% of the change in the applicable index.\nProgram impact:\nFood Stamp recipients would receive lower allotments than those to which they might be entitled without\na \"cap\".\nOther consideration:\nCongressional enactment is unlikely in view of FY 1976 experience with a similar proposal.\n1977 Outlay Reductions (Part II)\nUSDA/Child Nutrition\n(dollars in millions)\nDate:\n9/5/75\n/\nappropriation request\n/\ndeferral action\nother administration action\n/\n/\nrescission action\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nCutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n2,580\n2,520\n2,790\n2,720\nXXX\n3,115\nOMB recommendation\n2,580\n2,520\n1,695\n1,610\nXXX\n1,740\nSuggested reduction\n-0-\n-0-\n-1,095\n-1,110\nXXX\n-1,375\nActions required:\nAmend the Block Grant proposal to include use of food stamps by children from eligible households for payment\nof school meals. Children from participating food stamp households would be able to purchase meals (now provided\nfree or at a reduced price) using coupons which represent their per meal portion of the households food stamp\nallotment. Severe administrative problems such as determination of children's per meal cost in food stamps by\nage, sex and household allotment levels may be encountered and need study. Use of food stamps for this purpose,\nhowever, could reduce the duplication of Federal nutritional support which provide more than 100% of nutritional\nneeds.\nProgram impact:\nReduced participation of non-needy children since Block Grant treats only with needy children.\nOther consideration:\n-- Non-enactment of H.R. 4222 in FY 76: programs authorized under the continuing resolution (includes non-enactment\nof Administration's cost-of-living caps) - simple extension of current law.\n-- Enactment of the Administration's Block Grant proposal in FY 77 which would replace a number of narrow\ncategorical programs (including the Special Supplemental Foods for Women, Infants and Children;\nFood Donations; and Special Milk) with a comprehensive State grant.\nGERALD\n*If H.R. 4222 becomes law, FY 76 outlays would be increased to $2,942 million. FY 77 and 78 costs would\nproportionately increase.\nFORD\n1977 Outlay Reductions (Part II)\nCCC/Peanut Price Support\n(Dollars in Millions)\nDate: September 5. 1975\n/_/\nappropriation request\n11\ndeferral action\n/x/\nother administrative action\n11\nrescission action\nII\nsubstantive legislation\n1-1\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\nXXX\n620\nXXX\n587\nXXX\n670\nOMB recommendation\nXXX\n520\nXXX\n387\nXXX\n420\nSuggested reduction\nXXX\n100\nXXX\n200\nXXX\n250\nActions required:\nReturn to USDA's former practice of selling surplus peanuts (acquired under the price support program) to\ncrushers for conversion into peanut oil. Currently CCC crushes the peanuts and holds the oil for sale\nwhen prices are higher than at present.\nProgram impact:\nPeanut oil prices would be lowered. Outlays would be reduced as shown.\nOther consideration:\nThe current run-up in costs for the peanut program is a result of a decision to make the program look so\nbad that Congress would pass peanut legislation more to the Administration's liking. Although the\nstrategy is not working, USDA is continuing with it, and has proposed shipping the oil through P.L. 480\nrather than selling it commercially.\nA return to the old practice would mean abandonment of the strategy but not an abandonment of the effort to\nreform the peanut program.\n1977 Outlay Reductions (Part II)\nCCC/Tobacco Price Support\n(dollars in millions)\nDate: September 5, 1975\nII\nappropriation request\n11\ndeferral action\n/x/\nother administrative action\n11\nrescission action\nII\nsubstantive legislation\nII\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\nXXX\n89\nXXX\n102\nXXX\n128\nOND recommendation\nXXX\n89\nXXX\n52 XXX\n78\nSuggested reduction\nXXX\n0\nXXX\n50 1/ XXX\n50 1/\nActions required:\nReduce poundage quotas to bring production into better balance with demand.\nProgram impact:\nWould reduce amount of burley and flue-cured tobacco farmers could produce and thus reduce CCC loan outlays.\nOther consideration:\nWould reduce pressure to ship surplus tobacco under Food for Peace program.\n1/ An approximation. Harder estimate expected to follow discussions with USDA.\nis FORD GERALD LIBRARY\n(\n1977 Outlay Re cions (Part II)\nUSDA: Technical Assistance to Farmers and Landowners\n(dollars in millions)\nDate: September 5, 1975\n[*\nappropriation request\n1-1\ndeferral action\nI_/\nother administrative action\n11\nrescission action\nI_/\nsubstantive legislation\nI_/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n200\n201\n200\n200\nXXX\n200\nOMB recommendation\n200\n201\n150\n150\nXXX\n150\nSuggested reduction\n--\n--\n50\nXXX\n50\nActions required:\nReduce budget request for Soil Conservation Service (conservation operations).\nProgram impact:\nPreparation of farm plans (soil suitability for various farm operations) and other technical assistance to\nfarmers and landowners would be severely curtailed.\nOther consideration:\nAlthough there are no specific studies of this program, the assistance it provides improves the income of\nthe recipient; such assistance is available, for a fee, from private organizations.\n1977 Outlay Reductions (Part II)\nUSDA Water and Sewer Grants\n(Dollars in Millions)\nDate: September 5, 1975\n/x/\nappropriation request\nII\ndeferral action\nII\nother administrative action\n[ ]\nrescission action\nII\nsubstantive legislation\n11\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlavs\nAmount:\nCurrent estimate\n150\n66\n150\n70\nXXX\n200\nOMB recommendation\n150\n66\n--\n20\nXXX\n150\nSuggested reduction\n--\n150\n50\n50\nActions required:\nA one-year moratorium on providing new funding for water and sewer grants for FY 1977.\nProgram impact:\nEliminate the availability of grants during FY 1977 for approximately 700 water and sewer projects. The\nroughly 1,000 projects to be assisted by the $400 M water and sewer 5% loan program would have to be\nimplemented on a \"loan only\" basis rather than - on the average - with 1/3 grant assistance. The previous\ngrant moratorium - FY 1974, when grant funding was reduced to $24 M - did not prevent full utilization of\nwater and sewer loan funds - $470 M. The lowest income communities would likely not be eligible for project\nassistance on a 'loan only\" basis.\nOther consideration:\nThis program would be included in any future reforms of community or economic development programs (e.g.,\nconversion to block grants).\nCOMMERCE\nDEPARTMENT OF COMMERCE\n1977 OUTLAY REDUCTIONS\n(dollars in millions)\nRevised\nPlanning\nCurrent\nSuggested\nplanning\nProgram\nguidance\nAdjustments\nestimate\nreductions\nguidance\nEDA/Regional Commissions\n452\n+190\n642\n0\nMaritime\n691\n-\n691\n0\nNOAA\n556\n-\n556\n0\nPatent\n84\n-\n84\n0\nDIBA\n61\n-\n61\n0\nNBS/OT\n74\n-\n74\n0\nCensus\n100\n-\n100\n0\nMinority Business\n51\n-\n51\n0\nAll other (including offsetting receipts)\n(20)\n-\n(20)\n0\nSavings from using Job Opportunities funds\n-\n-\n-\n10\nPersonnel reductions\n-\n-\n-\n1\nTotal\n2049\n+190\n2239\n11\n2228\nGERALD LUBURIT ? FORD\nSUMMARY OF OUTLAY REDUCTIONS\nDEPARTMENT OF COMMERCE\n(dollars in millions)\nEffect on outlays in\n1976\n1977\n1978\nA. 1977 Planning guidance\nXXX\n2,049\nXXX\nAdjustments:\nIncrease resulting from\n$375M for Job\nOpportunities\nXXX\n190\nXXX\nCurrent estimate.\n1,789\n2,239\nXXX\nB. Suggested program reductions:\nJob Opportunities Program*\n0\n- Reduction in Commerce\n0\n10\n- Reduction in other agencies\n0\n70\nC. Personnel reduction\nXXX\n1\nTotal suggested reduction\n0\n11\n0\nRevised 1977 planning guidance and\nrelated 1976 amount\n1,789\n2,228*\nXXX\n*\nEvery effort would be made to use Job Opportunities funds to substitute for otherwise required 1977\noutlays by Commerce and other Federal agencies. We estimate potential reduction of $10M in Commerce\nand $70M in other agencies which have not yet been identified.\nDERALD\n9804\n1977 Outlay Reductions (Part II)\nCommerce/Job Opportunities Program\n(dollars in millions)\nDate: September 5, 1975\nappropriation request\ndeferral action\nX\nother Administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n--\n125\n:\n190\nXXX\n--\nOMB recommendation (net\nincrease in outlays)\n:\n125\n--\n110\nXXX\n--\nSuggested reduction\n---\n80\nXXX\nAction Required:\nFederal agencies would be requested to submit and the Secretary of Commerce would be instructed to select\nprojects for Job Opportunities funding which to the maximum extent consistent with authorizing legislation\nwould reduce the requirement for FY 1977 expenditures.\nProgram Impact:\nAgency projects now planned for FY 1977 which would otherwise result in FY 1977 expenditures would be\nfunded with the FY 1975 Job Opportunity appropriations of $375M.\nAND GERALD FORD\nOther Consideration:\nCongressional opposition to this approach would be severe if actions in this direction are too blatant and\nmight result in congressional prohibitions to use the money as a substitute for other Federal funds.\nSenator Montoya particularly has advocated that priority in the allocation of funds go to State and local\nprojects.\n+\nENGINEERS\nCORPS OF\nCORPS OF ENGINEERS\n1977 Outlay Reductions\nRevised\nPlanning\nCurrent\nSuggested\nplanning\nProgram\nguidance\nAdjustments\nestimate\nreductions\nguidance\nConstruction\n2122\nXXX\n2122\n200\n1922\nEmployment reduction\n7\n-7\nTotal\n2122\nXXX\n2122\n207\n1915\nGERALD\n?\nFORD LIBRARY\nSUMMARY OF OUTLAY REDUCTIONS\nCORPS OF ENGINEERS\n(dollars in millions)\nEffect on outlays in\n1976\n1977\n1978\nA.\n1977 Planning guidance\nXXX\n2122\nXXX\nCurrent estimate\n1997\n2122\nXXX\nB. Suggested program reductions:\nConstruction\n20\n200\n400\nC.\nEmployment reduction:\n4\n7\n7\nTotal suggested reduction\n24\n207\n407\nRevised 1977 planning\nguidance and related\n1976 amount\n1973\n1915\nXXX\n1977 Outlay Reductions (Part II)\nCorps of Engineers/Construction\n(dollars in millions)\nDate:\nSeptember 5, 1975\nappropriation request\ndeferral action\nother administration action\nrecission action\nsubstantive legislation\nother congressional action\nAmount:\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nCurrent estimate\n1271\n1268\n1450\n1559\nXXX\n1485\nOMB recommendation\n1251\n1248\n1250\n1359\nXXX\n1085\nSuggested reduction\n-20\n-20\n-200\n-200\nXXX\n-400\nActions required:\nReduce the current pace or curtail Corps of Engineers construction on some of the\n294 flood control, water supply, navigation and hydroelectric projects now underway\nby (A) proposing recission of funds for a large proportion of the new construction\ncontracts to be let after January 1, 1976, and (B) reducing the currently anti-\ncipated budget request in 1977. Although there is a large number of projects in\nthis program, less than half have contracts to be let within the appropriate time\nframe. The size of the savings desired ($200 M) largely eliminates the possi-\nbility of selectively choosing among them.\nBEYALD\n9001\nProgram impact:\nApproximately 130 projects would be affected by the construction slowdown; about\n50 of these would be shutdown completely -- have no work in progress -- for various\nlengths of time. This would allow all hydroelectric power on-line dates to be\nmet. The selection of the projects would be arbitrary and depend solely on when\ncontracts were due as discussed above.\nOther considerations:\nThere are particular projects which could be picked out for environmental or\neconomic reasons for termination (such as CEQ's dirty dozen) saving considerable\namounts now and in the future. The more practical approach, however, would be\nthe procedure recommended.\nThe unemployment rate in the construction industry is at a high level. A $200 M\nreduction from the current planning level would imply an unemployment impact of\nabout 10,000 jobs in the private sector.\nThese projects are generally popular with the Congressional delegation involved.\nHEW\nDepartment of Health, Education, and Welfare\n1977 Outlay Reductions\n(millions)\n1977\nRevised\nPlanning\nCurrent\nSuggested\nplanning\nProgram\nguidance\nAdjustments\nestimates\nreductions\nguidance\nHealth agencies\n5,104\n5,104\n5,104\nMedicaid\n8,327\n711\n9,038\n-1,230\n7,807\nMedicare\n18,336\n1,837\n20,173\n-2,500\n17,673\nEducation programs\n6,503\n837\n7,340\n-406\n6,934\nIncome maintenance and\nother\nPublic assistance\n4,977\n1,072\n6,049\n-353\n5,696\nSocial services\n1,100\n1,240\n2,340\n-857\n1,483\nOASDI\n83,534\n704\n84,238\n-3,254\n80,984\nCoal miners benefits.\n987\n987\n-15\n972\nSupplemental security\nincome\n5,874\n5,874\n-170\n5,704\nHuman development\n...\n1,505\n1,505\n-200\n1,305\nAll other\n150\n150\n150\nEmployment reduction\n(agency-wide)\n---\n---\n---\n-33\n-33\nTotal\n136,397\n6,401\n142,798\n-9,018\n133,780\nGERALD\n0601'S\n0601\nSummary of Outlay Reductions\nDepartment of Health, Education, and Welfare\n(dollars in million)\nEffect on Outlays in\n1976\n1977\n1978\nA.\n1977 planning guidance & related\n1976 amount\nXXXX\n136,397\nXXXX\nAdjustments\nCongressional failure to enact\ncost savings legislation:\nMedicare\nXXXX\n1,837\nOASDI\nXXXX\n704\nPublic Assistance\nXXXX\n353\nSocial Services\nXXXX\n1,000\nMedicaid\nXXXX\n711\nOverride of Education\nappropriations bill veto\nXXXX\n837\nXXXX\nXXXX\n5,442\nXXXX\nGERALD\n?\nReestimates of the Base:\nPublic Assistance\nXXXX\n719\nFORD\nSocial Services\nXXXX\n240\nXXXX\n959\nLIBRARY\nXXXX\nCurrent estimate\n127,089\n142,798\nXXXX\nB.\nSuggested program reductions\nMedicare:\nCurrent estimate\n16,833\n20,173\n23,193\nOMB recommendation\n16,833\n17,673\n20,393\nSuggested reduction\n-2,500\n-2,800\nMedicaid:\nCurrent estimate\n7,765\n9,037\n10,188\nOMB recommendation\n7,765\n7,807\n8,948\nSuggested reduction\n-1,230\n-1,240\nSummary of Outlay Reductions\nDepartment of Hea\n,\nEducation, and Welfare\n(Con't)\n(doll\nin millions)\n2\nEffect on Outlys in\n1976\n1977\n1978\nPublic Assistance:\nCurrent estimate\n5,763\n6,049\n6,308\nOMB recommendation\n5,763\n5,696\n5,955\nSuggested reduction\n---\n-353\n-353\nSocial Services:\nCurrent estimate\n2,331\n2,340\n2,400\nOMB recommendation\n2,331\n1,483\n800\nSuggested reduction\n---\n-857\n-1,600\nAging/Nutrition:\nCurrent estimate\n131\n135\n100\nOMB recommendation\n131\n44\n20\nSuggested reduction\n---\n-80\n-80\nRehabilitation Services:\nCurrent estimate\n686\n740\n720\nOMB recommendation\n686\n620\n515\nSuggested reduction\n---\n-120\n-205\nBlack Lung:\nCurrent estimate\n996\n991\n1,021\nOMB recommendation\n996\n976\n1,001\nSuggested reduction\n---\n-15\n-20\nOASDI:\nCurrent estimate\n72,865\n84,238\n92,966\nOMB recommendation\n72,865\n80,984\n89,527\nSuggested reduction\n---\n-3,254\n-3,439\nSSI:\nCurrent estimate\n5,517\n5,874\n6,103\nOMB recommendation\n5,517\n5,704\n5,833\nSuggested reduction\n---\n-170\n-180\nSummary of O- 'ay Reductions\nDepartment of Health\nducation, and Welfare\n3\n(Con't) (dollars in millions)\nEffect on Outlays in\n1976\n1977\n1978\nTitle I, ESEA:\nCurrent estimate\n1,755\n1,895\n1,897\nOMB recommendation\n1,755\n1,830\n1,800\nSuggested reduction\n---\n-65\n-97\nAdult Education:\nCurrent estimate\n66\n66\n66\nOMB recommendation\n34\nSuggested reduction\n-32\n-66\n-66\nVocational Education - Basic\nGrants:\nCurrent estimate\n186\n446\n396\nOMB recommendation\n186\n396\n352\nSuggested reduction\n---\n-50\n-44\nWork-Study:\nCurrent estimate\n287\n313\n310\nOMB recommendation\n......\n287\n212\n166\nSuggested reduction\n---\n-101\n-144\nNon-Student Assistance:\nCurrent estimate\n284\n243\n274\nOMB recommendation\n284\n119\n108\nSuggested reduction\n---\n-124\n-166\nC. Employment Reduction\n(agency-wide)\n---\n-33\n-33\nTotal suggested reduction\n-32\n9,018\n-10,467\nRevised planning guidance\n127,057\n133,780\nXXX\n1977 Outlay Red\nions (Part II)\nMedicare\n(dollars in millions)\nDate:\nSeptember 5, 1975\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n18,364\n16,833\n21,533\n20,173\n23,193\nOMB recommendation\n18,364\n16,833\n21,533\n17,673\n20,393\nSuggested reduction\n-2,500\n-2,800\nActions required: Legislation would be proposed to freeze the Medicare payment rates for hospitals\nand physicians for one year beginning July 1, 1976. Hospital cost increases would be permitted, if\napproved by a State, within a maximum of an aggregate average 5% per diem State-wide. Physicians\nwould also be required to accept Medicare payment as full compensation, i assignment, and pro-\nhibited from charging patients more than specified deductible and coinsurance in law (savings of\n$1 billion in 1977 and $800 million in 1978). Any limitation on hospital cost increases must be\narbitrary since there is no agreement by the medical profession or by the public as to what\nconstitutes \"quality\" of care or how much is a fair or reasonable cost for hospital care. A freeze\non physician reimbursement is justifiable on grounds that physician fees should be permitted to\nrise only if higher prices are needed to induce more persons to enter medical schools or if public\npolicy dictates that prices should be allowed to increase to restrict use of services. Since neither\nof these reasons is now applicable, there is no basis in social welfare for allowing physician\nincomes to increase beyond their current level.\nThe Medicare cost-sharing proposal would continue to be supported (savings of $1.5 billion in 1977\nand $2.0 billion in 1978). This proposal is consistent with principles in nearly all of the\n2\nnational health insurance proposals that recognize that moderate cost-sharing is needed to prevent\nunnecessary utilization of services and that limits must be established on total cost-sharing for\nadequate financial protection. The major element of the proposal is to require beneficiaries to\npay 10% of charges from the 2nd to 60th day of hospitalization, which is now free. Lengths of\nstay in the Medicare program are often longer than necessary, reflecting variation in the supply\nof hospital beds. For example, in the West--which has 5.9 hospital beds for 1,000 population--\nlengths of stay for Medicare beneficiaries average 10.1 days. In the Northeast--which has 8.7\nhospital beds per 1,000 population--lengths of stay average nearly 50% longer--15.0 days. The\ncost-sharing proposal also includes separate $750 limits on cost-sharing for hospital and\nphysicians' services, replacing current potential liability of about $4,500 for inpatient\nservices and unlimited financial liability for physicians' services.\nProgram impact: Medicare hospital cost increases would be reduced from about 14% to 5% per diem\nand Medicare physician fee increases would be frozen rather than rising about 10%. To the extent\nthat a hospital's cost rise exceeded approved limits, these costs would be passed on to other payors\nof hospital expenses. The overall 5% limit would permit States to assess the justification for\nincreases on a case-by-case basis. Announcement of the proposals in the budget would permit nearly\nsix months for hospitals to adjust spending plans. Less restrictive limits would make transition\na more manageable problem but reduce savings. Some hospitals and physician may, however, refuse\nto serve Medicare patients under these reimbursement policies. The cost-sharing proposal would\nincrease cost-sharing for a typical hospital stay from about $100 to about $275. The proposed $750\ncost-sharing limits would assist less than 1% of beneficiaries.\nOther considerations: The cost-savings estimates are uncertain and include an assumption that\nfuture legislative proposals would not permit hospitals and physicians to \"catch-up\" for the limit\nperiod in 1978. Adjusting such, maximum increase amounts by an index, e.g., the CPI, is one alter-\nnative for future years. Congress will oppose the Administration proposals.\n1977 Outlay Re\nions (Part II)\nMedicaid\n(dollars in millions)\nDate:\nSeptember 5, 1975\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n7,765\n7,765\n9,037\n9,037\n10,188\n10,188\nOMB recommendation\n7,765\n7,765\n-7,807\n-7,807\n-8,948\n-8,948\nSuggested reduction\n-1,230\n-1,230\n-1,240\n-1,240\nActions required: Medicaid program expenditures would be limited in FY 1977 by putting a cap on\ncost increases eligible for Federal matching consistent with the proposed Medicare limits, i.e., a\n5% limit on increases in institutional per diem costs and no increase in physician fees (savings of\n$400 million in 1977 and $300 million in 1978). These Medicaid limits would reflect the view that\nit is a State responsibility to control health costs through planning and regulation and that the\nFederal budget should not be liable for open-ended spending for health programs for which States\nlargely determine the eligibility, benefits, and reimbursement rates. The limits are essentially\narbitrary, but would create incentives for firmer State actions to control per unit costs of health\nservices.\nLegislation would again be proposed to lower the minimum Federal share of Medicaid from 50% to 40%\nin the highest income States (savings of $700 million and $800 million), and thus more equitably\nrelate Federal matching to States' ability to pay. Current law relates the Federal share of\nMedicaid to State per capita income-but assures that the Federal Government will pay at least 50%\nof costs for the wealthiest States. As a result, these States have generally established higher\neligibility and benefits than lower income States. Over 50% of Federal Medicaid outlays now go to\nonly six States, and over 30% to just two States--New York and California.\nFORD\n2\nLegislation would also be proposed to end Federal Medicaid matching for State purchase of the\nMedicare physician insurance program for eligible Medicaid beneficiaries (savings of $130 million\nin 1977 and $140 million in 1978). The premium for this program is already more than 50% sub-\nsidized by Federal funds and the Federal matching through Medicaid results in a Federal subsidy\nof 75% of State costs.\nProgram impact: These proposals do not require benefit reductions, but could have that effect.\nStates could pay for higher costs than allowed by the \"cap\" on Federal matching from their own\nfunds. Announcement of the proposal in the January budget would give States nearly nine months in\nwhich to revise their budget and health costs control plans. The change in the minimum Federal\nmatching would impact heavily on only a few of the thirteen States. About $350 million of the\n$700 million in FY 1977 savings would be in payments to New York, $140 million in California, $70\nmillion in Illinois, and $50 million in New Jersey. The elimination of the Federal Medicaid match\nfor State government purchase of the Medicare physician insurance program would leave State expenses\nmore than 50% subsidized by Federal funds. This would still be a bargain for most States, which\ncould be expected to continue to purchase such coverage.\nOther considerations: No \"catch-up\" inflation is assumed for FY 1978.\nCongress, however, is unlikely to enact these proposals. Savings estimates are uncertain. The\nMedicaid program could also be \"capped\" or limited in other ways, e.g., by setting maximum limits\non eligibility, by putting a ceiling on average per capita spending, by lowering the Federal\nmatching for optional services, etc. The development of such options will depend on decisions\nmade concerning future Medicaid structure in the context of national health insurance.\n1977 Outlay Reductions (Part II)\nSRS/Maintenance Payments\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\n/\nrescission action\nX\n/\nsubstantive legislation\n/\nother congressional action\n1976*\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n6294\n5763\n6049**\n6049**\nXXX\n6308**\nOMB recommendation\n6294\n5763\n5696\n5696\nXXX\n5955\nSuggested reduction\n--\n:\n-353\n-353\nXXX\n-353\nActions required:\nRepropose cost-saving legislation contained in 1976 budget, to restrict the Federal matching percentage option\nto the Medicaid formula, revise work-related expense provisions and increase the number of redetermination\nperiods, and collect child support.\nProgram impact:\nIn the case of the matching percentage, nine states, mostly low income lower payment level southern states,\nwould be required to use the Medicaid formula. Approximately one in seven AFDC families would experience\na change in the calculation of their child care and work-related expenditures. Every family would be\nsubject to the redetermination process, which would tend to remove ineligibles and eliminate overpayments more\nrapidly, though with partially offsetting higher State administrative expenses. There are 2,000,000 AFDC\nfamilies for which a liable absent parent is not supplying child support. Under this legislative proposal,\na share of the amounts collected would be earmarked for the family, in addition to its welfare benefit.\nOther consideration:\nNo action has been taken by Congress on these proposals, and further action is unlikely since these proposals\nwere included in a legislative package that included several other, more controversial items, such as the\n5% cap on social security benefits.\n2\n1976 estimates reflect the latest HEW report to Congress (July 15, 1974) on current program level and\nassumes July 1, 1976 effective date of legislative proposals. 1976 BA also includes an added $531 M\nto provide for FY 1975 costs paid out of advance from 1976 appropriations.\nAssumes constant caseload of 11,354,000 persons with average monthly benefits of $74.55 in 1977 and\n$78.00 in 1978, reflecting substantial increases in 1975 and 1976, as portrayed in the HEW quarterly\nreport to Congress. Also reflects loss of $260 M in Quality Control savings due to change in method\nof calculating State error liability. Cost of non-AFDC items is assumed constant at $660 M.\n1977 Outlay Reduc ons (Part II)\nSRS/Social Services\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n2331\n2331\n2340\n2340\nXXX\n2400\nOMB recommendation\n2331\n2331\n1483\n1483\nXXX\n800\nSuggested reduction\n-857\n-857\nXXX\n-1600\nActions required:\nProposed legislation to reduce the Federal matching rate from 75% to 65% in 1977 and to 50% in 1978. (The 1976\nbudget proposed such reductions for 1976 and 1977 respectively.)\nProgram impact:\nAssumes the states will maintain or slightly increase their funding participation in this program. Practically\nevery State would lose approximately one-third of its Federal grant in 1976, with consequent reduction or\nelimination of a wide range of services (including child care, protective services, food delivery, services to\nalcoholics and drug addicts, etc.) currently affecting approximately 5.5 million individuals. While this pro-\ngram is not especially meritorious intrinsically, the proposed reduction cannot be justified on programmatic\ngrounds, but instead would be simply an effort to shift a major share of the burden of funding from the Federal\ngovernment to the states.\nOther consideration:\nCongress has already placed a $2.5 billion ceiling on Federal expenditures for this program, but has not\nshown any interest in the existing 1976 budget proposal. Under extreme pressure from states and localities,\nit is highly likely that no action would be taken by the Congress to reduce the matching rate. There is\nevidence that the social services program tends to increase dependency for individuals. Placing a greater\nfunding burden on the states may result in the elimination of some of the more ineffective services.\nGERALD\nFORD\n1848817\n1977 Outlay Redue tons (Part II)\nOHD/Aging Nutrition\n(dollars in millions)\nDate:\n8/19/75\nX\nappropriation request\ndeferral action\nother administration action\n/\nrescission action\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n100\n131\n100\n135\nXXX\n100\nOMB recommendation\n100\n131\n--\n55\nXXX\n20\nSuggested reduction\n-100\n-80\nXXX\n-80\nActions required:\nThis program duplicates services provided under the Older American's Act Title III authority as well as other\nprograms -- a Spring Preview issue. As an alternative, these programs could be consolidated with a single\nappropriation request. This action would allow for a phase-out of the Title VII -- Aging Nutrition program.\nHowever, this proposal would require either no request for FY 1977 funds or legislation to terminate the Title VII\nprogram, justified on the grounds that this is a welfare-type benefit with no income test, and that poor elderly\ncan buy such meals with food stamps while wealthier elderly could pay the cost of their food.\nProgram impact:\n275,000 elderly per day (1.3 million annually) would be required to pay for their meal, pay an increased amount,\nor discontinue utilizing such service.\nOther Consideration:\nA wide array of services are linked with the provision of meals. Thus, termination of Title VII might have an\nadverse effect on the HEW effort to provide services to the elderly which may delay ínstitutionalization.\nImpact measures (evaluations) of these activities will not be available prior to the FY 1978 budget review.\n1977 Outlay Reductions (Part II)\nHEW/OHD/RSA\n(dollars in millions)\n9/5/75\nDate:\n/\nappropriation request\n/\ndeferral action\n/\nother administration action\n/\nrescission action\nX\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n720\n686\n720\n740\nxxx\n720\nOMB recommendation\n680\n686\n675\n680\nXXX\n590\nSuggested reduction\n-40\n--\n-45\n-60\nXXX\n-130\nActions required:\nPropose legislation to reduce the Federal share from 80% to 75%. The program, as originally enacted by the Congress\nrequired a 50% match. Over the years the Federal match has \"creeped\" upward. This action would more closely\napproximate this activity to matching provisions contained in the Social Services Block Grant and the Allied Services\nproposal. Such an action would be a step towards moving to consolidate these programs.\nProgram impact:\nThis proposal assumes that the States would be able to supply enough additional matching funds to keep the overall\nprogram level constant. This legislative authority is an entitlement to the States up to their ability to match\nFederal funds to the authorization level. If the States do not raise additional revenues to meet the modified match,\nthe proposal could reduce the Federal requirement to as low as $540 million - thus generating a potential BA savings\nof $180 million, with outlay savings of about $115 million in 1977.\nOther consideration:\nThe Congress will not be receptive to a proposal which reduces funding for Vocational Rehabilitation.\nIn addition, the President has decided to call a White House Conference on Handicapped Individuals in\nDecember, 1976, which would place further obstacles to reduced funding.\n1977 Outlay Reductions (Part II)\nHEW/OHD/RSA\n(dollars in millions)\nDate:\n8/19/75\n/\nappropriation request\ndeferral action\nX\n/\nother administration action\n/\n/\nrescission action\nX\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n720\n686\n720\n740\nXXX\n720\nOMB recommendation\n680\n686\n645\n680\n645\nXXX\nSuggested reduction\n-40\n-0-\n-75\n-60\nXXX\n-75\nActions required:\nConsideration of this proposal is subordinate to Medicaid modifications proposed by Health Branch. Nonetheless,\npropose modifications of the regulations for Medicaid and the Vocational Rehabilitation Services (VR) programs\nto require use of Medicaid authority to provide medical services to VR clientele. The Social Security Act would\nrequire amendment.\nProgram impact:\nPresently, States utilize VR authority to provide required health services for rehabilitation - 80% Federal match.\nThis proposal would require States to utilize Medicaid - 50% Federal match. VR regulations presently require\nthat other benefits be utilized insofar as they are adequate and do not interfere with achieving the rehabilitation\nobjective of an individual. HEW conservatively estimates 10% of the VR expenditure is health related.\nOther consideration:\nStates will resist the additional State costs resulting from the reduced match. However, additional State costs\nmay serve to introduce added efficiencies into the program.\n1977 Outlay Reductions (Part II)\nHEW/SSA/Black Lung\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nX\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n996\n996\n991\n991\nXXX\n1021\nOMB recommendation\n996\n996\n976\n976\nXXX\n1001\nSuggested reduction\n--\n--\n-15\n-15\nXXX\n-20\nActions required:\nLimit cost-of-living increase to the same level as the Federal salary increase (to which this program's\nbenefits are tied) --i.e., enactment of proposed 60% limit on CPI increases.\nProgram impact:\nBeneficiaries would receive less than the expected benefit increase.\nOther consideration:\nGERALD\n?\nEnactment is extremely unlikely.\nFORD\n1977 Outlay Reductions (Part II)\nDHEW/SSA/OASDI\n(dollars in millions)\nDate:\n9/5/75\n/\nappropriation request\n/\ndeferral action\n/\nother administration action\n/\nrescission action\nX\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n68,388\n74,681\n79,055\n84,238\nXXX\n92,966\nOMB recommendation\n68,388\n74,681\n79,055\n81,788\nXXX\n90,366\nSuggested reduction\n--\n--\n--\n-2,450\nXXX\n-2,600\nActions required:\nLimit cost-of-living increase to 60% of the increase in the applicable index.\nProgram impact:\n31 million beneficiaries would receive less than the expected benefit increase.\nOther consideration:\nEnactment is extremely unlikely.\ncros\n1977 Outlay Reductions (Part II)\nDHEW/SSA/OASDI\n(dollars in millions)\nDate:\n9/5/75\n/\nappropriation request\ndeferral action\n/\nother administration action\n/\n/\nrescission action\nX\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n68,388\n74,681\n79,055\n84,238\nXXX\n92,966\nOMB recommendation\n68,388\n74,681\n79,130\n83,534\nXXX\n92,232\nSuggested reduction\n--\n+75\n-704\nXXX\n-739\nActions required:\nEnactment of 1976 cost-savings legislation (elimination of monthly retirement test and retroactive payment of\nactuarially-reduced benefits.)\nProgram impact:\nThe proposal to eliminate retroactive payments (which was recommended by the 1971 Advisory Council on Social\nSecurity), provides that social security benefits not be paid retroactively for months before an application\nis filed when this would require a permanent reduction in the beneficiary's future monthly benefits. The\nadvisory council recommendation is intended to insure that an OASDI beneficiary's continuing benefit income,\non which he has to rely for the remainder of his life, is not reduced. The proposal would make the law more\nconsistent with the objective of providing adequate benefit income for the aged.\nThe retirement test would be modified SO that it would no longer include a monthly test except for the first\nyear an individual receives a cash benefit. This proposal would make the retirement test more equitable and\nless complex thereby increasing public understanding and acceptance, and providing for more efficient\nadministration.\nGERALD\nOther consideration:\nUnlikely of enactment (proposed for 1975 and ignored).\nFORD\n2849917\n1977 Outlay Reductions (Part II)\nSSA/HEW/OASDI\n(dollars in millions)\nDate:\n9/5/75\n/\nappropriation request\n/\ndeferral action\n/\nother administration action\n/\nrescission action\nX\n/\nsubstantive legislation\n/\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n68,388\n74,681\n79,055\n84,238\nXXX\n92,966\nOMB recommendation\n68,388\n74,681\n79,055\n84,138\nXXX\n92,866\nSuggested reduction\n--\n--\n--\n-100\nXXX\n-100\nActions required:\nEnactment of legislation barring receipt of minimum OASDI benefits by those receiving other publicly-\nfinanced pension benefits (primarily Federal employees).\nProgram impact:\nWould reserve welfare-weighted minimum benefit for originally intended recipients -- long-term, low wage\nworkers. Increases program efficiency and equity.\nGERALD FORD\n1977 Outlay Reductions (Part II)\nHEW/SSA/SSI\n(dollars in millions)\nDate:\n9/5/75\n/\nappropriation request\n/\ndeferral action\n/\nother administration action\n/\nrescission action\n/\nsubstantive legislation\n/\nother congrressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n5,517\n5,517\n5,874\n5,874\nXXX\n6,013\nOMB recommendation\n5,517\n5,517\n5,704\n5,704\nXXX\n5,833\nSuggested reduction\n--\n--\n-170\n-170\nXXX\n-180\nActions required:\nLimit cost-of-living increases to 60% of the change in the applicable index.\nProgram impact:\n4.5 million beneficiaries would receive less than the expected benefit increase.\nOther consideration:\nEnactment is extremely unlikely.\n1977 Outlay Reduction (Part II)\nAttachment B\nHEW/OE Education for the Disadvantaged: Title I, ESEA\nDate: 9-5-75\nX\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n1,900\n1,755\n1,900\n1,895\nXXX\n1,897\nOMB recommendation\n1,800\n1,755\n1,800\n1,830\nXXX\n1,800\nSuggested reduction\n-100\n--\n-100\n-65\nXXX\n-97\nActions required: Propose a rescission of $100 million in FY 1976 budget authority and\nan immediate budget amendment for the advance funded amount for FY 1977 that is in the\nFY 1976 President's budget. Since this program is advance funded, the impact of these\nreductions would not be felt until FY 1977.\nProgram impact: The overall impact of this reduction would be a decrease in the national\naverage per pupil expenditure under this program of some $18 from $277 to $259 per child.\nIf State and local educational agencies want to maintain the average per pupil expend-\nitures at projected levels, they should do so from their own revenues. This suggestion\nis based upon the following considerations.\n-- There is an estimated $930 billion from prior year obligations which States\nhave yet to draw upon.\n2\nPast evaluations, although some three years old, have indicated that an\naverage per pupil expenditure of $300 has, in some instances, been\neffective. Consequently, $300 per child became a norm of effectiveness.\nHowever, that evaluation also indicated that there were instances and\nstudies that showed that amounts less than $300 (in some cases $200) have\nbeen effective in significantly increasing pupil achievement.\nOther consideration: There have been major efforts in the past several budgets to\nconsolidate certain Federal education programs. Some success has been achieved\nwith the smaller programs. However, Congress has been extremely reluctant to\n\"bloc-grant\" large programs. In addition, any \"hold-harmless\" would prevent the\nachievement of any savings from the 1977 planning target.\nBERALD\nFORD\n1977 Outlay Reductions (Part II)\nAttachment B\nHEW/OE Adult Education\n(dollars in millions)\nDate:\n9-5-75\nX\nappropriation request\ndeferral action\nother administration action\nX\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n68\n66\n68\n66\nXX\n66\nOMB recommendation\n--\n34\nXX\nSuggested reduction\n-68\n- -32\n-68\n-66\nxx\n-66\nActions required:\nRescind the advanced funded portion of the 1975 appropriation for Adult\nEducation and immediately amend the 1976 budget request to eliminate the Adult Education\nadvance funding request available for obligation in FY 1977.\nProgram impact: Terminates Federal support for this activity which currently serves some\n1 million adults in literacy training and similar activities. If State and local educational\nauthorities wish to continue to support this activity, they can do so from their own\nrevenues. However, the implications of this proposal with regard to the Voting Rights Act are\npotentially significant. It could hinder citizens who are illiterate from achieving\nliteracy through adult education. The Voting Rights Act of 1975 defines illiteracy as\nfailure to complete the fifth primary grade. In terms of voter turnout and registration,\nthe inability to read and write has had an impact on participation. Further, adult educa-\ntion programs have provided the potential of reducing the unemployment and welfare rolls\nthrough increased employability. However, at present, the Federal Government is also\nproviding nearly $3 billion through Social Services and the Work Incentive program which\ncan (and is, in part) being used to overcome illiteracy among welfare recipients.\nOther consideration: It is unlikely that Congress will approve this reduction.\n1977 Outlay Reductions (Part II)\nAttachment B\nHEW/OE Vocational Education/Basic Grants\n(dollars in millions)\nDate:\n9-5-75\nX\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\n.\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n359\n186\n302\n446\nXXX\n396\nOMB recommendation\n359\n186\n208\n396\nXXX\n352\nSuggested reduction\n-94\n-50\nXXX\n-44\nActions required: Reduce the appropriation request by $94 million in FY 1977. This would be an\nacceleration of approximately one-year in the proposed increase in non-Federal support in this area.\nProgram impact: The Federal formula grants to States, used to maintain, extend, or improve vocational\neducation programs, would be reduced. If State and local educational agencies wish to keep the program at\nprojected levels, they should do SO from their own revenues. This proposed reduction is reflected in the\nlegislation the Administration has submitted to the Congress. Rather than continue basic State support,\nthe legislation would allow Federal funds to be targeted on demonstration and \"capacity building\"\nactivities. In addition, GAO has recently issued a study that indicates that there are high overhead costs\nat the State level. HEW maintains that this is not the case, however.\nOther consideration: It is unlikely that this proposal will meet with congressional approval.\n1977 Outlay Reductions (Part II)\nAttachment B\nHEW/OE Work-Study\n(Dollars in millions)\nDate:\n9-5-75\nX\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n250\n287\n250\n313\nXXX\n310\nOMB recommendation\n106\n287\n106\n212\nXXX\n166\nSuggested reduction\n-144\n-144\n-101\nXXX\n-144\nActions required: Rescind FY 1976 funds and alter the ratio of Federal/non-Federal\nmatching funds from the current one non-Federal to four Federal to a one-to-one basis. Program regulations\nwould have to be amended accordingly. This results in a savings in FY 1977 of some $100 million. There is\nan evaluation study of the program done by the Bureau of Applied Social Research at Columbia University.\nOne of the conclusions of that study, as well as the consensus of evaluation opinion and congressional\ntestimony, is that the subsidy could be cut without materially affecting the willingness of colleges to\nhire college work-study students. Some estimates of the increased share that colleges could be persuaded\nto pay without any employment impact, are as high as 50% of the wage.\nProgram Impact: If institutions of higher education SO wished, they would make up the reduction in\nFederal support from their own revenues. No student employment impact since total level of effort would\nremain constant.\nOther consideration: It is unlikely that this proposal will meet with the approval of the Congress.\n1977 Outlay Redu\non (Part II)\nAttac ent B\nHEW/OE Non-Student Assistance Portion of Higher Education Support\n(dollars in millions)\nDate: 9-5-75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n200\n284\n198\n243\nXX\n274\nOMB recommendation\n--\n284\n--\n119\nXX\n108\nSuggested reduction\n-200\n--\n-198\n-124\nXX\n-166\nActions required: Rescind funds for all non-student assistance higher education programs.\nThis would place the Federal role as one based entirely upon direct support for students\nin postsecondary education.\nProgram impact: This would eliminate all non-student assistance programs, such as insti-\ntutional support for developing (ie. minority) institutions, support for disadvantaged\nstudents, cooperative education, etc. This would place considerable strain upon the\nhigher educational community. However, we believe that continued emphasis upon the BEOGs\n(Basic Educational Opportunity Grants) program, which serves a great many disadvantaged\nstudents at those institutions that traditionally have served poor students and are now\nreceiving Federal institutional aid, will offset these reductions. Greater numbers of\nthese students, due to BEOGs support, should insure institutional vitality. Although\nthe impact could be reduced by phasing the program out over 4 - 5 years, such an approach\nwould not produce the assigned 1977 outlay reductions.\nBERALD TOHO\n2\nOther consideration: This would complete the process, already recommended by the\nPresident, of giving aid to needy students, allowing them to pick their college,\nrather than subsidizing the colleges. Since Congress rejected this year's first\nstep, it is unlikely that this reduction will be accepted by the Congress.\nHUD\nDEPARTMENT OF HOUSING AND URBAN DEVELOPMENT\n1977 OUTLAY REDUCTION\n(Outlays in Millions of Dollars)\nRevised\nPlanning\nCurrent\nSuggested\nPlanning\nProgram\nGuidance\nAdjustments\nEstimate\nReduction\nGuidance\nFederal Housing Administration\nFund\n1,000\n+500\n1,500\n-308\n1,192\nGovernment National Mortgage\nAssociation: Special\nAssistance Functions Fund\n87\n...\n87\n...\n87\nHousing Payments\n2,560\n...\n2,560\n...\n2,560\nPayments for the Operation of\nLow-Income Housing Projects\n550\n550\n-120\n430\n...\nCommunity Development Grants\n2,450\n...\n2,450\n...\n2,450\nComprehensive Planning Grants.\n67\n...\n67\n-45\n22\nUrban Renewal\n1,125\n...\n1,125\n...\n1,125\nFlood Insurance\n130\n...\n130\n...\n130\nAll Other\n254\n...\n254\n-15\n239\nTotal\n8,223\n+500\n8,723\n-488\n8,235\nGERALD\nR.\nFORD\nSUMMARY OF OUTLAY REDUCTIONS\nDepartment of Housing and Urban Development\n(dollars in millions)\nEffect on outlays in\n1976\n1977\n1978\nA.\n1977 Planning guidance\nXXX\n8,223\nXXX\nAdjustments:\nFHA Fund increase in net claims under\nmortgage insurance programs\nXXX\n+500\nXXX\nCurrent estimate\n5,808\n8,723\nXXX\n(Current estimate, excluding sale of\ntandem mortgages deferred from 1975\nto 1976)\n(7,980)\n(8,723)\n(xxx)\nB. Suggested program reductions:\nFederal Housing Administration mortgage\ninsurance programs:\nHigher mortgage insurance premiums\n---\n-18\n-26\nIncreased foreclosures on multifamily\nprojects in default\n---\n-250\n-125\nDiscontinuation of premium rebates\n---\n-40\n-40\nPayment for the Operation of Low-\nIncome Housing Projects\n---\n-120\n-300\nComprehensive Planning Grants\n-10\n-45\n-40\nResearch and Technology\n-5\n-15\n-10\nTotal suggested reduction\n-15\n-488\n-541\nRevised 1977 planning guidance and related\n1976 amount\n5,793\n8,235\nXXX\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\nFHA Fund/Mortgage Insurance Premiums\n(dollars in millions)\nDate:\n9/4/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n1,570\n1,500\n1,500\n1,500\n1,000\n1,000\nOMB recommendation\n1,570\n1,500\n1,482\n1,482\n974\n974\nSuggested reduction\n-0-\n-0-\n18\n18\n26\n26\nActions Required: Make each mortgage insurance program actuarially sound by raising\ninsurance premiums where warranted. Annual premiums for high risk programs would be\nincreased up to the 1-percent statutory limit.\nProgram Impact: The increase in the annual cost of mortgage insurance would reduce the\nvolume of insurance written (estimate not available). It is not clear, however, what\nimpact this would have on claims. To the extent the marginal homebuyer is squeezed out,\nclaims would drop. On the other hand, if the risks still using FHA insurance turned to\nthe conventional market, the default rate would increase. The proposed action would\nrequire poor families to pay higher premiums.\nOther Considerations: Good estimates of actuarially sound premiums are available for\nsingle-family programs; the estimates for the multifamily programs are less reliable.\nHUD opposed this action last year on the grounds that the Department could not defend\nit with the default data then available. The data has improved considerably since then,\nbut HUD's likely reaction to this alternative is unclear. HUD is setting up a committee\nto review the role of FHA and to develop a Presidential options paper. HUD probably\nwould prefer to have this reduction considered as part of that decision process.\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\nFederal Housing Administration Fund\n(dollars in millions)\nDate:\n9/4/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n1,570\n1,500\n1,500\n1,500\n1,000\n1,000\nOMB recommendation\n1,570\n1,500\n1,460\n1,460\n960\n960\nSuggested reduction\n-0-\n-0-\n-40\n-40\n-40\n-40\nActions Required: Enactment of legislation halting the rebate of premiums under mutual\nand cooperative insurance funds.\nProgram Impact: The provision for mutuality does not appear to have a significant\ninfluence on the demand for FHA insurance. Few families are aware of the possibility\nof a rebate when they obtain FHA insurance. Consequently, few potential insureds would\nbe influenced by this change. Those homebuyers who would be dissuaded from FHA insurance\ncould still turn to conventional financing.\nOther Considerations: HUD contends that this would be controversial, and that enactment\nprobably would be difficult to obtain. It also would be unfair to those few families\nwho obtained FHA insurance with the expectation of receiving rebates. HUD has noted\nthat even with legislation, it is possible that these participants would still be\nlegally entitled to payments. If this turned out to be the case, no savings would\nresult in 1977 or 1978.\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\nFederal Housing Administration Fund\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n1,570\n1,500\n1,500\n1,000\n1,000\n1,000\nOMB recommendation\n1,570\n1,500\n1,250*\n1,250*\n875\n875\nSuggested reduction\n-0-\n-0-\n-250*\n-250*\n-125\n-125\nActions Required: Accelerate foreclosure and sale of assigned multifamily housing mort-\ngages. This would involve instituting foreclosure on all mortgages assigned for (say)\nmore than 6 months, followed by sale in \"as-is\" condition.\nProgram Impact: Sale proceeds would offset outlays elsewhere in the budget. This action\nmight lead to rent increases under new ownership, creating a financial Lurden on lower\nincome families. However, the large write-downs in capital value needed to sell the\nprojects, plus the location of many projects in low-income areas would tend to limit such\nincreases. Tenants would still be better off than comparable families not benefiting from\nthe implicit subsidy of large write-downs. Moreover, they could be protected from severe\nchanges in rental charges through grandfather clauses or priority on Section 8 subsidy\nlists. Greater emphasis on foreclosure-and-sale would have a favorable impact on manage-\nment efficiency, and thus reduce default claims over time.\nOther Considerations: Congress would probably respond with operating subsidies to keep the\nprojects afloat, or a statutory ban on foreclosures. HUD would resist this action on\npolitical grounds, although the Department's own analysis of the multifamily default\nproblem indicates that this is the most cost-effective solution.\n*\nAssumes 13% reduction in 1977 inventory, instead of a 13% increase.\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\nPayments for the Operation of Low-Income Housing Projects\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n525\n210\n572\n550\n637\n602\nOMB recommendation\n525\n210\n272\n430\n337\n302\nSuggested reduction\n-0-\n-0-\n-300\n-120\n-300\n-300\nActions Required: Enactment of legislation removing the ceiling on rents which public\nhousing tenants may be charged (the so-called Brooke amendments)\nProgram Impact: On tenants-Repeal of the Brooke amendment would allow local housing\nauthorities (LHA's) to charge public housing families higher rents, although deep\nsubsidies on behalf of these families (covering 100% of capital costs, including\ninterest) would continue to hold rents well below those prevailing in the private\nmarket. While LHA's would not be obligated to take this opportunity, it would provide\njustification for reducing operating subsidies via the Performance Funding System.\nHigher rents would represent a major financial burden for the poorest of these families,\nalthough they would still be much better off than families with similar incomes who do\nnot live in public housing.\nOn LHA's--LHA's would suffer financially, as tenants faced with rent increases stage\nrent strikes and increase vandalism. This would not affect the Performance Funding\n2\nSystem, and therefore there need not be any offsetting increase in operating\nsubsidies.\nOther Considerations: HUD would argue that the savings--even from complete repeal\nof the Brooke amendment would be infinitesimally small in 1977 because of delays\nin implementation due to phase-in of rent adjustments, court suits, and the like.\nWhile complete repeal of the rent ceiling is most unlikely, some improvements might\nbe possible that would reduce operating subsidy requirements (e.g., legislation\nrequiring LHA's to charge the maximum rents, improvements in the definition of\nincome).\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\n701 Comprehensive Planning Grants\n(dollars in millions)\nDate:\n9/5/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n50\n113\n50\n67\n50\n45\nOMB recommendation\n0\n103\n0\n22\n50\n5\nSuggested reduction\n-50\n-10\n-50\n-45\n-0-\n-40\nActions Required: Suspension of the 701 Comprehensive Planning Grants Program in 1976\nand 1977. This would require a budget amendment and/or a rescission of the 1976\nappropriation. No funding would be requested for 1977.\nProgram Impact: The 701 program is one of 45 Federal planning assistance programs.\nGrants for planning activities are awarded on a discretionary, case-by-case basis, and\nthere is little equity in the allocation of funds--a recipient who has traditionally\nreceived a large proportion of the 701 funds will tend to receive that same proportion\nin the future. The larger, more sophisticated State and local governments receive more\nfunding because they are better equipped to cope with the paperwork involved in applying\nfor grants. The 701 funding pattern for 1974 illustrates the traditional yearly funding\npattern:\n2\nPercent\nRecipient\nNumber Eligible\nof Total Funding\nStates\n55\n24\nMetropolitan regional bodies\n270\n28\nLarge cities\n422\n23\nNonmetropolitan regional bodies\n388\n16\nCounties and small cities\n20,000\n9\nSuspension of the program should have no impact on any high priority projects; presumably,\nthey would be undertaken by local governments with or without Federal funds. Marginal\nprojects could not be financed. However, under the Community Development Block Grant\nProgram, funds may be used for activities leading to formulation of a comprehensive\ncommunity development plan and enhancement of a recipient's policy-planning-management\ncapacity--the same types of activities financed by 701. Further, the House Appropriations\nCommittee, in its report on the 1976 HUD appropriations bill, endorsed the use of community\ndevelopment block grants as a supplementary source of planning funds. HUD is studying the\nissue as to whether community development block grants can be used for all activities\neligible under 701. Some 701 recipients, specifically regional bodies, are not eligible\nfor community development block grants; they would lose their independent financing and,\nthus, be dependent on recipients of community development block grant money to finance\nregional planning activities.\nOther Considerations: The 701 program is politically very sensitive.\nAttachment B\n1977 Outlay Reductions (Part II)\nDepartment of Housing and Urban Development\nResearch and Technology\n(dollars in millions)\nDate:\n9/4/75\nappropriation request\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n57\n61\n65\n65\n65\n65\nOMB recommendation\n57\n56\n35\n50\n65\n55\nSuggested reduction\n-0-\n-5\n-30\n-15\n-0-\n-10\nActions Required:\nDefer $15 million in 1976 budget authority and reduce the 1977 appropriation request from\n$65 million to $35 million.\nProgram Impact:\nThis action would allow the Department to continue major ongoing research activities\nfocusing on housing allowances, lead-based paint hazards, energy conservation, and State\nand local management. The cutback would not allow for the initiation of any new research\nprojects (e.g., research on safety and standards, environmental improvement, and public\nservice delivery).\nOther Considerations:\nOpposition from within the Department would be most intense. HUD believes a $70 million\nresearch program is the irreducible minimum.\nINTERIOR\n1\nDEPARTMENT OF THE INTERIOR\n1977 OUTLAY REDUCTIONS\nRevised\nPlanning\nCurrent\nSuggested\nplanning\nProgram\nguidance\nAdjustments\nestimate\nreductions\nquidance\nIndians\n$921\n0\n$921\n$8\n$913\nTerritories\n125\n0\n125\n0\n125\nRecreation\n900\n0\n900\n66\n834\nEnergy and Minerals\n498\n0\n498\n0\n498\nLand Management\n505\n0\n505\n51\n454\nWater\n633\nO\n633\n50\n583\nPower\n-6\n0\n-E\n0\n-5\nAdministration\n49\nO\n49\n0\n49\nEmployment Reduction\n14\n-14\nTotal, Gross\n$3,624\n$0\n$3,624\n$189\n$3,635\nOffsetting Deductions\n-1,438\nO\n-1,438\n0\n-1,438 -\nTotal, Net\n$2,186\n$0\n$2,186\n$189\n$1,997\nFORD\nSUMMARY OF OUTLAY REDUCTIONS\nDEPARTMENT OF THE INTERIOR\n(dollars in millions)\nEffect on outlays in\n1976\n1977\n1978\nA.\n1977 Planning guidance\nXXX\n2,186\nXXX\nAdjustments:\nXXX\n0\nXXX\nCurrent estimate\n2,469\n2,186\nXXX\nB.\nSuggested program reductions\nBureau of Reclamation con-\nstruction\nCurrent Estimate\n602\n614\n620\nOMB Recommendation\n592\n564\n620\nSuggested Reduction\n10\n50\n-0-\nLand and Water Conservation Fund\nCurrent Estimate\n292\n338\n292\nOMB Recommendation\n292\n288\n282\nSuggested Reduction\n-0-\nI\n50\n10\nOffice of Surface Mining and\nReclamation\nCurrent Estimate\n20\n51\n100\nOMB Recommendation\n0\n0\n0\nSuggested Reduction\n20\nGERALD\n51\n100\n.d\nFORD\nLIBRANY\nEffect on outlays in\n1976\n1977\n1978\nBIA construction and road\nconstruction\nCurrent Estimate\n140\n140\n140\nOMB Recommendation\n140\n132\n134\nSuggested Reduction\n0\n8\n6\nPark Service road construction\nCurrent Estimate\n39\n38\n35\nOMB Recommendation\n39\n30\n28\nSuggested Reduction\n0\n8\n7\nPark Service planning and\nconstruction\nCurrent Estimate\n54\n47\n45\nOMB Recommendation\n54\n39\n38\nSuggested Reduction\n0\n8\n7\nTotal Suggested Reduction\n-30\n-175\n-130\nC.\nEmployment Reduction\n-14\n-14\nRevised 1977 planning guidance and\nrelated 1976 amount\n2,439\n1,997\nXXX\n1977 Outlay Reductions (Part II)\nBureau of Reclamation\n(dollars in millions)\nDate:\nSeptember 5, 1975\nappropriation request\nX\ndeferral action\nother administration action\nrescission action\nsubstantive legislation\nother congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n592\n602\n660\n614\nXXX\n620\nOMB Recommendation\n582\n592\n610\n564\nXXX\n620\nSuggested reduction\n10\n10\n50\n50\nXXX\n0\nActions required:\nDeferring $10 million for construction contracts in February 1976 would result in an\noutlay reduction below the current estimate for 1977 of approximately $50 million\nbecause these multi-year contracts have small outlays in the first year, and larger\noutlays in future years.\nProgram impact:\nThe Bureau of Reclamation's program is federally managed construction through competi-\ntive bid, fixed price contracts, aimed at economic development in the West, i.e.,\nirrigation, municipal and industrial water supply and hydroelectric power development.\nIrrigation project costs are partially repaid by the irrigators over 50 years with no\ninterest. Power and municipal and industrial water supply costs are repaid over 50\nyears with interest currently computed at approximately 4%, well below the Treasury's\ncurrent borrowing costs.\nOngoing work in all the Bureau of Reclamation's seven regions will be slowed down,\nbut no ongoing projects would be terminated. The projects affected by the deferral\nare primarily irrigation projects that are at best economically marginal and require\nhuge Federal subsidies but some power and water supply projects are affected also.\nNo shutdown costs would be incurred.\nOther consideration:\nA $50 million reduction from the current planning level would imply an unemployment\nimpact of about 2,500 jobs in the private construction industry.\nThe congressional delegations in the 17 Western States very strongly support the\nBureau's program.\nGERALD\nR.\nFORD\nLIBRARY\n1977 Outlay Reductions (Part II)\nInterior/Land and Water Conservation Fund\n(dollars in millions)\nDate: Sept. 4, 1975\nX\nAppropriation request\nDeferral action\nOther Administration action\nRescission action\nSubstantive legislation\nOther congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n330\n292\n392\n338\nXXX\n292\nOMB recommendation\n330\n292\n332\n288\nXXX\n282\nSuggested reduction\n-0-\n-0-\n60\n50\nXXX\n10\nActions required:\nThe current allowance for FY 1977 budget authority consists of $30 million in CA for\nwhich no appropriations to liquidate have been sought in recent years, $62 million\nto repay prior advances to the fund, $176 million in grants to States, $6 million for\n-\nsalaries and expenses, and $118 million for Federal agency land acquisition. It is\nproposed that the entire $60 million be taken from the Federal land acquisition pro-\ngram, reducing it by one-half.\nProgram impact:\nThe Federal land acquisition monies are used for recreation, wildlife and conserva-\ntion programs in national parks, forests, and wildlife refuges. This reduction would\ndelay land acquisition for these program areas by about one-half year: but since the\nland can be acquired in subsequent years, no serious long-term program consequences\nwould result. There is no specific programmatic justification for not spending at\nthe projected level -- except that some lower priority activities would be postponed\nuntil following years.\nOther consideration:\nThis is a very politically sensitive program, and many Congressmen will react strongly.\n1977 Outlay Reductions (Part II)\nInterior/Office of Surface Mining and Reclamation\n(dollars in millions)\nDate: Sept. 4, 1975\nAppropriation request\nDeferral action\nX\nOther Administration action\nRescission action\nSubstantive legislation\nOther congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n30\n20\n66\n51\nXXX\n100\nOMB recommendation\n0\n0\n0\n0\nXXX\n0\nSuggested reduction\n30\n20\n66\n51\nXXX\n100\nActions required:\nThe FY 1977 allowance assumed enactment of a stripmining bill. The President's veto\nof this bill has been sustained, and the budget levels shown above forecast no future\naction on this issue. No specific affirmative action is needed to achieve reductions.\nProgram impact:\nThe program impacts of this reduction are, in effect, the myriad differences between\nthe Administration's position on stripmining and that of the Congress. These dif-\nferences have been debated at length and are supported by several FEA, Interior,\nCommerce, CEQ and congressional studies.\nGERALD\n?\nFORD\nLIBRARY\n1977 Outlay Reductions (Part II)\nInterior/BIA Construction and Road Construction\n(dollars in millions)\nDate: Sept. 4, 1975\nX\nAppropriation request\nX\nDeferral action\nOther Administration action\nRescission action\nSubstantive legislation\nOther congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n61\n140\n61\n140\nXXX\n140\nOMB recommendation\n61\n140\n54\n132\nXXX\n134\nSuggested reduction\n0\n0\n7\n8\nXXX\n6\nActions required:\nReduce program levels in each of the two accounts by $7 million in FY 1977, generating\noutlay savings of $8 million in the first year and $6 million in the second. Since\nthe road construction program involves contract authority, this will require an\nincrease in the deferral of CA from that which would otherwise be proposed.\nProgram impact:\nThis would effectively delay the construction of an estimated two schools for a year,\nleaving approximately 600 Indian children in either overcrowded or outdated school\nfacilities for that year. The reduction in road construction would delay the program\nby only two months or less. There is no specific programmatic justification for not\nspending at the projected level -- except that some lower priority activities would\nbe postponed until following years.\nGERALD\nR.\nFORD\nLIBRARY\nOther consideration:\nBoth programs are receiving increased congressional attention since authority now\nexists to use these funds to assist non-Indian local governments in Indian-impacted\nareas. While some criticism from Indians would result, the major sources of opposi-\ntion will be Senators and Congressmen from Arizona, New Mexico and the Northern\nPlains States.\n1977 Outlay Reductions (Part II)\nInterior/National Park Service Road Construction\n(dollars in millions)\nDate: Sept. 4, 1975\nX\nAppropriation request\nX\nDeferral action\nOther Administration action\nRescission action\nSubstantive legislation\nOther congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n0\n39\n0\n38\nxxx\n35\nOMB recommendation\n0\n39\n0\n30\nXXX\n28\nSuggested reduction\n0\n0\n0\n8\nXXX\n7\nActions required:\nThe request for appropriations to liquidate CA would be reduced and an increase in\ndeferrals of $15 million in obligations would be proposed.\nProgram impact:\nThis would represent a reduction of approximately one-third in the program level\nfor FY 1977, entailing delays in road construction. However, no permanent serious\nconsequences would be involved. There is no specific programmatic justification\nfor not spending at the projected level -- except that some lower priority\nactivities would be postponed until following years.\nOther consideration:\nThis account is regularly the subject of \"congressional add-ons\" and this reduction\nwould be resisted. Since it involves both an appropriation request and a deferral\naction, it is subject to two types of review by the Congress.\nGERALD\n?\nFORD\nLIBRARY\n1977 Outlay Reductions (Part II)\nInterior/National Park Service Planning and Construction\n(dollars in millions)\nDate: Sept. 4, 1975\nX\nAppropriation request\nDeferral action\nOther Administration action\nRescission action\nSubstantive legislation\nOther congressional action\n1976\n1977\n1978\nBA\nOutlays\nBA\nOutlays\nBA\nOutlays\nAmount:\nCurrent estimate\n23\n54\n54\n47\nXXX\n45\nOMB recommendation\n23\n54\n39\n39\nXXX\n38\nSuggested reduction\n0\n0\n15\n8\nXXX\n7\nActions required:\nReduce appropriation request and program level for the construction of facilities in\nNational Parks by nearly 30 percent from the proposed FY 1977 level. The current\nestimate for FY 1976 as shown above represents a one-time reduction in requests to\npermit the agency to use the large unobligated balances it has been carrying forward\neach year.\nProgram impact:\nThis would involve delays in making a wide range of improvements in National Parks,\nbut would have no serious long-range program consequences. There is no programmatic\nbasis for this reduction, except that lower priority activities would be postponed.\nOther consideration:\nGERALD\n?\nThis account is often subject to congressional add-ons, and this reduction would\nincur strong opposition in the Congress.\nFORD\nLIBRAST"
}