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FY 1977 - 12/75 - Fifty Issues (3)
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6651724
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FY 1977 - 12/75 - Fifty Issues (3)
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White House Special Files Unit Files
Budget Review Decision Papers
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The original documents are located in Box 10, folder "FY 1977 - Fifty Issues (3)" of the
White House Special Files Unit Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 10 of the White House Special Files Unit Files at the Gerald R: Ford Presidential Library
Gun Control
The Bureau of Alcohol, Tobacco and Firearms will expand efforts
to curtail illegal commerce in firearms in large metropolitan
areas. This effort, which was directed by the President in
the Message on Crime, is designed to assist local law enforce-
ment efforts to curb violent crime by identifying and disrupting
illegal firearms distribution channels. An additional 500
Federal investigators will be employed to work closely with
local officials in the 11 largest metropolitan areas. The
program will begin with 180 additional investigators assigned
to Washington, D.C., and two other cities in 1976. In 1977,
the program will expand with 320 additional investigators.
Eleven cities in all will be covered. They are as follows:
Boston, Chicago, Dallas, Detroit, Los Angeles, New York,
Philadelphia, Pittsburgh, San Francisco, St. Louis, and
Washington, D.C. The Bureau is redirecting 60 investigators
from the suppression of illicit liquor to the new firearms
program. This redirection coincides with the decline in
illicit liquor activity.
FORD
LIBRARY
51
Illegal Aliens
Each year a great many aliens enter the United States illegally,
seeking economic opportunities that do not exist in the countries
from which they come. The number of illegal aliens in the
United States is uncertain, but 788,000 deportable aliens
were located in 1974--about twice the number of immigrants who
entered legally in that year.
Historically, illegal aliens have worked along the Southwest
border as agricultural laborers. Today, however, there are
increasing concentrations in urban, industrialized areas
throughout the country, and though some are willing to accept
employment for which Americans are unavailable, many others
compete for jobs of interest to American workers. All live
in fear of apprehension and are subject to economic exploitation
or abuse.
This influx of unauthorized immigrants has important but as yet
unclear implications for the United States. In 1975 the
President established a Domestic Council Committee on Illegal
Aliens and instructed it "to develop, coordinate and present
policy issues that cut across agency lines to provide better
programs for dealing with this national problem." Until the
Committee has finished its studies and recommended a compre-
hensive program for addressing the issues, the President has
instructed the Immigration and Naturalization Service
(Department of Justice) to concentrate its efforts on rigorous
enforcement of current immigration statutes.
The 1977 budget seeks to improve the balance within the
Immigration and Naturalization Service (INS) in the allocation
of resources devoted to apprehension, detention, and ultimate
expulsion of illegal aliens who live and work in metropolitan
areas of the United States. While the investigative arm of
the Service has the capability to identify relatively large
numbers of allegedly illegal aliens, little can be done with
those who are apprehended because of the inadequacy of
FORD
detention facilities, the limited number of detention and
deportation personnel and the lack of sufficient funds for
alien removal. Aliens are often held for a few hours and
released on their own recognizance prior to removal from the
country. As one would expect, few reappear as ordered. For
example, over a two month period in New York City, 449 persons
were apprehended and released pending arrangement of trans-
portation out of the country; only 22 returned on the date set
for their departure.
52
2
In keeping with the President's intent to enforce effectively
the immigration and naturalization statutes, staff resources
available to I&NS will be redeployed in 1977 and more than
$10 million will be added to the Service's budget for
detention and deportation. A new document control system and
other productivity improvements will make it possible to
reduce the number of inspectors al ports of entry by 133
positions; the investigative arm of the Service will be reduced
by 127 positions--primarily by decreasing the number of
investigators working on routine background checks. This will
enable the Service to employ 106 new detention guards and 98
deportation personnel. Border Patrol staff will be maintained
at 1976 levels.
Federal Bureau of Investigation (FBI)
The Federal Bureau of Investigation's (FBI's) budget will
decrease by approximately $14 million in 1977. The decrease
is partly due to declining workload from 1969 to 1975. The
FBI's investigative workload has decreased by approximately
22% from 1969 to 1975 while the agency workforce has increased
by almost 25% during the same period (see table below). This
downward shift is primarily explained by three factors: the
drop in desertion cases due to the disengagement from Viet
Nam and the creation of all volunteer armed forces, the
transfer of certain types of cases (stolen cars and thefts from
interstate shipment) to the States for investigation, and the
new policy of prioritizing FBI investigative casework.
Recognizing these changing trends in FBI workload, the 1977
budget assumes a 1% productivity increase in FBI workforce,
allowing a decrease of 250 positions. This proposal attempts
to bring the FBI workforce more in line with anticipated
workload, and at the same time recognizes the increased
complexity of the FBI's current investigative mission, particu-
larly in the areas of organized and white collar crime.
Workload VS. Agent Workforce
Investigative
Special
Matters
Agents
1969
859,666
6,832
1973
774,579
6,572
1974
745,840
6,564
1975
673,957
8,404
The 1977 budget also proposes to require 50% reimbursement from
the State and local governments for training provided by the FBI
as well as to reduce equipment purchases and premium pay.
To assure that trained agents are available to replace those agents
who must retire by January 1978, 80 temporary work-years were
provided in 1977 which will permit training of 450 new agents.
S3
Customs
The U.S. Customs Service budget will increase by $5 million in
1977. This net increase is due to pay and other price increases,
offset by reductions in staff and equipment purchases.
The decrease in staff relates to recent declines in workload
requirements from those levels previously anticipated. Previous
workload estimates assumed continuation of past increases in the
number of travelers and formal import entries which had been
averaging 8% over the past 10 years. Over 1,000 additional
average positions were added to handle the projected increase
in workload as shown below.
Est.
Act.
1973
1974
1975
1975
Formal import entries*
3,240
3,206
3,640
3,015
Persons arriving*
251,618
259,619
268,800
249,730
Average positions
11,772**
11,878
---
13,076
*Amounts in thousands
**Includes 702 average positions transferred to the Drug Enforce-
ment Administration under Reorganization Plan No. 2 of 1973.
The decreased workload in 1975 has reduced previous estimates for
1976 as shown below.
Previous
Revised
Est.
Est.
%
1976
1976
Difference
Formal import entries*
3,484
3,135
-10%
Persons Arriving*
278,200
257,000
-8%
Average Positions
---
13,255
--
*Amounts in thousands
The number of travelers and import entries is expected to increase
in 1977. However, the expected workload remains below that
previously expected as shown in the table below, for both 1975
and 1976.
Previous
Revised
Est.
Est.
Est.
1975
1976
1977
Formal entries*
3,640
3,484
3,355
Persons arriving*
268,800
278,200
267,000
Average Positions
realized or estimated
13,076
13,255
12,936
*Amounts in thousands
2
The reduction in staff of 319 average positions to 12,936
average positions in 1977 will provide a better balance
between staff and expected workload requirements. The
staffing level provides for processing workload at rates
which are similar to those achieved prior to 1975. The
effort to interdict drugs and other contraband will continue
to remain a high priority in the Customs Service.
Administratively Uncontrollable Overtime (AUO) for Law Enforcement
Officers
Federal Law (5 USC 5545) authorizes the heads of Federal law
enforcement agencies to award premium pay or "administratively
uncontrollable overtime" (AUO) to investigators and other law
enforcement officers who work irregular overtime hours on
schedules that cannot be predetermined and approved in advance.
In 1976, 22,000 employees of the Internal Revenue Service, the
U.S. Customs Service, the Secret Service, Treasury Department's
Bureau of Alcohol, Tabacco, and Firearms, the Federal Bureau of
Investigation, the Immigration and Naturalization Service, the
Drug Enforcement Administration and the U.S. Marshals' Service
are eligible to receive between $1,500 and $3,700 annually in
administratively uncontrollable overtime payments.
The practice of awarding premium pay is necessary to assure that
law enforcement officials will be compensated when they work
extra hours for legitimate reasons without prior supervisory
approval. For example, a narcotics investigator cannot always
know in advance that he will be following a suspect at the end
of his normal eight hour workday, and it would not be realistic
to terminate an active investigation simply because the clock
reaches 5:00 p.m.
Although AUO is necessary, improved management can be used to
reduce expenditures in this area. Agency allowances for
administratively uncontrollable overtime will be reduced by
about 25 percent in 1977, resulting in an outlay savings of
$17 million. Management personnel will be instructed to
tighten up on administrative regulations and work schedules
to assure that officers who must work irregular, unscheduled
and unsupervised overtime hours receive the full premium pay
to which they are entitled. Personnel on routine assignment
will be expected to complete their work in the normal eight
hour tour of duty or, when extra work is absolutely necessary,
to schedule supervised overtime in advance.
GERAL FORD LIBRARY
55
State and Local law enforcement assistance
The fight against crime, particularly violent crime, is primarily
a State and local government responsibility. The Federal
Government plays a supportive role by providing financial and
technical assistance to State and local governments and criminal
justice agencies to strengthen their ability to operate, effectively.
The 1977 budget continues to emphasize the importance of this
Federal assistance role, but in a manner which (1) features
greater selectivity in funding programs and projects with
potential for reducing crime and (2) more clearly distinguishes
between Federal, State, and local government capabilities and
responsibilities.
Specifically, for the Law Enforcement Assistance Administration
(LEAA), the major program for providing financial and technical
assistance, the budget requests $708 million in new budget
authority for 1977, down approximately 10% from the 1976 funding
level. The 1977 budget assumes greater selectivity and evaluation
of LEAA programs to determine their impact on crime reduction.
Major 1977 budget proposals include the following:
Matching block and discretionary grant programs are
down slightly from 1975 (approximately 6%) reflecting
the need for a more cautious approach in selecting
programs for funding which have potential for reducing
crime. The most significant new program proposed is
the "High Crime Area Program," an initiative to target
assistance funds to urban areas with high crime rates.
Programs which will aid in the evaluation of LEAA
effectiveness--planning grants; technical assistance;
research, evaluation, and technology transfer; and
data systems--will be maintained at approximately
the 1976 level.
FORD
The Law Enforcement Education Program, which provides
criminal justice system training for college students
LIBRARY
and State and local police officers, will be eliminated,
except for full-time students currently enrolled in
multi-year courses of study. This function can be more
appropriately funded and administered by State and
local governments. However, the transition quarter
budget does contain $40 million which will permit funding
of the 76-77 academic year for current students.
The new juvenile delinquency programs authorized by the
Juvenile Justice and Delinquency Prevention Act of 1974
will be funded at a level of $25 million. This will be
accomplished by a request of $10 million in new FY 77
56
2
obligational authority and a deferral until FY 77 of
$15 million from FY 76 appropriated funds. This new
program supplements more than $100 million currently
spent annually on juvenile delinquency from other
LEAA programs. This program will be intensely
evaluated during 1977 to determine its effectiveness.
The Federal Bureau of Investigation (FBI) also provides assistance
to State and local governments through its laboratory analysis
and training programs. The 1977 budget continues the laboratory
analysis program at current funding levels but requires State
and local governments to reimburse 50% of the costs of training
received from the FBI. This latter proposal recognizes the
unique law enforcement training capabilities of the FBI but
requires State and local governments to share the costs of the
program, from which they primarily benefit.
Internal Revenue Service
The 1977 Presidential budget provides continued emphasis on
revenue-generating activities which directly and indirectly
encourage voluntary compliance with internal revenue statutes.
Anticipated productivity increases, combined with greater
selectivity in choosing cases, are generally expected to
allow the 1977 program level to approach that of 1976.
Although average positions will be reduced by 3 percent below
1976, the 1977 level will still be comparable to 1975, as
shown in the table below. The budget level presumes that
additional measures will be taken to constrain property and
equipment procurement, space alterations, printing and postage,
graphic arts, administrative travel, executive training, use of
space, and agent overtime.
Average Positions
1974
1975
1976
1977
Actual
Actual
Estimate
Estimate
Executive direction and internal
audit and internal security
1,741
1,867
1,874
1,771
Data processing operations
24,817
26,035
26,623
26,412
Collection
11,243
12,326
12,604
11,383
Taxpayer Service
2,798**
3,380*
4,218
4,062
Audit of tax returns
25,488*
28,373
28,100
27,580
Tax fraud and special
investigations
3,793
4,130
4,062
3,675
Taxpayer conferences and appeals
1,409
1,423
1,494
1,445
Employee plans and exempt
organizations
1,568*
1,807
2,075
2,247
Other supporting programs
2,905
2,998
3,114
2,984
Total average positions
75,762
82,339
84,164
81,559
*
- Adjusted to separately identify average positions devoted to
employee plans and exempt organizations in audit (1,379) and
technical rulings and services (189), since these programs
were not separate budget activities in 1974.
** - Excludes some 700 staff years of Audit and Collection
employees detailed to this activity during filing season.
Reductions in executive direction, internal audit and other
support activities reflect overall reduction in the size of the
Service. The budget provides for processing the rising number
of tax returns filed each year, but with tight constraints
57
168
2
overall on related data processing operations. While the
reduction in Collection personnel is substantial Imost
10%--more than half is accounted for by completion of a
special inventory reduction effort in 1975 and 1976. While
Taxpayer Service is reduced 4% from the FY 1976 level, it is
20% over the 1975 level. This budget will allow assistance
to an estimated 40.2 million taxpayers, as compared with
41.9 million in 1976 and 41.0 million in 1975. Despite a
reduction of 520 average positions in Audit, total returns
examined are expected to increase about 10% in FY 1977 due
to a substantial increase in the number of routine audits
processed in the IRS service centers and a slight decrease in
comprehensive audits in IRS district offices. Average
employment for tax fraud activities is reduced some 9.5%,
reflecting in part the overall reductions in IRS employment
and in part, a closer scrutiny of staff years devoted to special
investigative efforts that have not been exclusively related to
tax administration. Fluctuations in the taxpayer conference
activity are directly related to changes: in the level of
audit activity. Personnel resources in employee plans will
concentrate on processing a substantial part of the anticipated
surge of employee pension plans to be filed during 1976 and
1977 under provisions of the Employee Retirement Income
Security Act of 1974.
Executive Office Employment
The Executive Office of the President performs a variety of
functions that will be continued in 1977. The following table
presents the full-time, end of year employment totals for
each of the offices over the three year period 1975-1977.
Employment Full-Time
6-30-75
6-30-76
9-30-77
Actual
Estimate
Estimate
White House Office
534
500
485
Executive Mansion and Grounds
78
82
82
Domestic Council
32
40
40
National Security Council
72
72
70
Office of the Vice President
30
30
30
Office of Management and Budget
603
660
640
Office of Federal Procurement
Policy
0
22
26
Council of Economic Advisers
35
46
39
Citizens Advisory Committee on
Environmental Quality
1
1
1
Council on Environmental Quality
51
44
40
Council on International Economic
Policy
28
29
21
Council on Wage and Price
Stability
37
44
42
Office of Special Representative
for. Trade Megotiations
45
45
49
Office of Telecommunications
Policy
61
48
41
Total
1,607
1,663
1,606
In 1977, employment will be reduced to 1975 levels for these
ongoing functions. Both 1976 and 1977 totals reflect the
additional 24 positions that were transferred to the Office of
Management and Budget and the Office of Federal Procurement
Policy by the Congress when it recently abolished the GSA Office
FORD
of Federal Management Policy.
The 1976 and 1977 totals will be increased by 30 positions when
the President's proposed legislation to create an Office of
Science and Technology is enacted. This will bring the 1976
level to 1,693 positions and the 1977 level to 1,636 positions.
58
New York City Seasonal Financing Fund
Public Law 94-143 authorizes the Treasury Department to make
short-term loans to the city through June 30, 1978, from
the New York City Seasonal Financing Fund. The amount of loans
outstanding may not exceed $2.3 billion at any one time, and
must be repaid within the year borrowed. These loans will
facilitate New York City borrowing during periods when local
expenditures exceed revenues and will be repaid when most
local tax revenue is received, usually between April and June.
New York City will pay into the General Fund of the Treasury
interest at the rate of 1% above Treasury borrowing rates.
As provided in Public Law 94-143, the outstanding loans will
be sold before the end of the Federal fiscal period to the
Federal Financing Bank; hence, they will not be reflected as
outlays in the budget.
FORD i LIBRARY
60
Regulatory Agencies
For 1977, the President's budget for the ten independent regulatory
commissions reflects his concern for needed reforms in the substance
and process of Federal regulation. His recommendations include re-
programming existing personnel (and in some cases adding resources)
in order that the agencies can better accomplish four priorities:
(1) better analysis of the economic consequences of regulations;
(2) reduction in delays of regulatory proceedings; (3) improved
consumer representation; and (4) greater emphasis on areas where
competition can supplement or replace regulation. Each agency is
discussed in more detail in the following paragraphs.
Civil Aeronautics Board
The CAB operational budget for 1977 is $21.7 million, about $1.8 million
over 1976. The CAB has indicated that it will pursue major reform of
air carrier economic regulation in 1977. The budget contains a staff
increase of 29 positions and the reprogramming of present resources
to priority regulatory reform activities. Principal reform initiatives
will include the modernization of Board procedures to minimize pro-
cedural delays, review and evaluation of ratemaking criteria such
as load factors and rate of return, evaluation of air carrier subsidy
and service to small communities, and improved analysis and research
for examination of agency policies and operations.
Commodity Futures Trading Commission
The CFTC budget for 1977 is $11.2 million, the same as in 1976.
At the same time its end-of-year employment ceiling (FTP) for 1976
is 450 which is 2% above the current staffing level but 29 below the
expected level on June 30, 1976. These reductions from projected
levels were made because the Commission has not demonstrated a need
for more resources. The Commission came into being April 21, 1975
(replacing the Commodity Exchange Authority). Its staffing pattern
for 1976 indicates that it will not reach its originally assigned
ceiling in the current year and therefore ought to reexamine its
staff requirements before requesting additional personnel.
Consumer Product Safety Commission
The 1977 budget maintains the President's original 1976 request level
for CPSC. In the light of substantial increases in 1975, this resource
level is sufficient to enable CPSC to make progress towards its essential
objective of reducing the unreasonable risks of injury from consumer
products. For 1976, a rescission of $5 million has been proposed to
reduce the CPSC appropriation to the President's request level.
Federal Communications Commission
The FCC program for 1977 will increase by 19 positions over program
levels for 1976.
61
2
These increased resources will be devoted to further implementation
of the Commission's automated data processing system--in its fourth
year in 1977. This effort is a major part of the agency's regulatory
reform program and is intended to speed up processing time for ap-
plications, license changes, and renewals for approximately six
million broadcast and citizen band licenses. By the end of 1977,
the FCC should show increased productivity in many processing
activities. This will improve public service and free existing
FCC resources for other, more important tasks.
Federal Maritime Commission
The program level for the Federal Maritime Commission (FMC) will be
essentially the same in 1977 as it is in 1976. The FMC is reviewing
its enabling statutes and administrative processes to determine where
regulatory improvements might be made.
Federal Power Commission
The 1977 budget for the Federal Power Commission provides a staff increase
of 60 positions and additional funding of $4.8 million over the 1976
levels. FPC's responsibilities for managing reduced supplies of natural
gas are growing in complexity and importance. Staff increases will
enable the Commission to investigate and manage diminishing interstate
gas supplies more effectively. The additions will also help avoid
delays in the availability of new natural gas from Alaska and alleviate
a growing backlog in FPC's hydroelectric licensing work. Further, the
President's 1977 budget includes additional funds to develop and improve
FPC's Regulatory Information System. The system will enhance FPC's
productivity by simplifying procedures under which companies report
data and generally streamlining the flow of regulatory paperwork.
Federal Trade Commission
The budget request for the FTC stresses its antitrust enforcement
responsibilities. Thirty new positions are proposed to supplement
existing antitrust staff. Outlays will rise from $46.9 million in
1976 to $52.6 million in 1977, with most of the increase attributed
to expanded antitrust enforcement.
Interstate Commerce Commission
The ICC proposes to pursue major reform of its regulatory processes
in 1977 with a net reduction in personnel levels. The reprogramming
of resources to priority reform activities and modernization of surface
transportation regulatory practices will enable the Commission to effect
meaningful reform and modernization of surface transportation economic
regulation. Principal reform activities are expected to include
implementation of procedural actions to expedite formal case processing,
development of a permanent planning capability, improved costs and
benefits analysis, emphasis on expanded general rulemaking to reduce
time consuming case-by-case adjudication, assessment and evaluation of
the compliance program, and examination of agency policies and operations.
3
Nuclear Regulatory Commission
Funding for NRC will increase substantially because of the
important role which NRC plays in ensuring that nuclear power
continues to be a safe and environmentally acceptable means
of generating electricity. The United States needs additional
nuclear power plants in order to achieve more energy independence
from foreign suppliers and to provide consumers with cheaper
electricity than alternative sources can provide. The additional
resources for NRC will help enable the U.S. to achieve the
benefits of nuclear power by assuring adequate attention to the
problems of safety, environmental effects, and safeguarding
nuclear materials against theft.
The NRC 1977 budget will permit continued progress in reducing
the time required to issue nuclear power reactor construction
permits. In the near term the Commission intends to reduce the
average time for license approvals from 21 months to 16 months,
and has established a near-term goal of 14 months. NRC's
inspection program will be expanded to keep pace with the
growth in the number of power reactors in operation or under
construction. Moreover, additional inspectors will be provided
for the nuclear safeguards and materials inspection function.
The 1977 budget provides for a 50% increase in outlays and a
35% increase in staff for the Nuclear Materials Safety and
Safeguards program. This program is responsible for designing
and implementing NRC's safeguards and nuclear materials
licensing program. A 23% increase in outlays for NRC's
regulatory research program (confirmatory assessment) is also
projected. Within this program, large increases are provided
for the high priority reactor safety research effort and further
research on safeguards, fuel processing, storage, transportation,
and disposal.
Securities and Exchange Commission
The budget provides for 57 more full-time permanent positions
in 1977 than 1976 to enable the SEC to implement the Securities
Acts Amendments of 1975. Additional funds are also included
for SEC support of the National Market Advisory Board. At the
same time these increases are taking place, the Commission will
be taking steps to manage better its existing resources:
Reallocating positions to high priority programs, funding
mandatory price increases within the current 1976 appropriation
and initiating management actions intended to permit future
reductions in employment subsequent to 1977.
General Revenue Sharing and General Purpose Fiscal Assistance
Since 1972, the Federal government has provided fiscal assistance
to State and local governments with a minimum of red tape and
administrative expense through General Revenue Sharing.
The present, five-year authorization for General Revenue Sharing
will end December 31, 1976.
The record shows that the program has been highly successful.
Already, of the $30.2 billion authorized, more than $23.5 billion
has been paid to nearly 39,000 states, counties, cities, towns,
townships, Indian tribes and Alaskan native villages. The money
is allocated equitably, according to formulas set forth in the
law, using data which are provided by the U.S. Bureau of the
Census and reviewed by the recipient governments themselves.
The funds are paid quarterly, in predictable amounts.
These funds have done much to strengthen the viability of our
Federal system of Government, a system predicated upon the shared
exercise of powers and responsibilities. Revenue Sharing combines
the efficiency of the Federal revenue raising system with the
experience and the accountability that comes from allowing locally
elected governments to set priorities for their own States and
communities. It has been the foremost of a number of recent
initiatives to reform Federal aid to States and localities so
that the governments in our system can work more effectively
together to meet the needs of our citizens.
When support was growing for the enactment of the current revenue
sharing program, our State and. local governments were struggling
with inadequate and regressive tax resources to meet the mounting
demand for services being placed upon them. While Federal
categorical aid programs of various types were available, they
did not provide a help for many of the problems facing local
governments. Federal grants often did not go to support basic
services, such as sanitation or fire protection, where help
was often needed. At the same time, the then available Federal
aid programs had the effect of making recipients adjust their
own priorities to areas where grant money was available. An
additional burden often present was the need to match the
Federal contribution with State and local funds. These
characteristics of aid programs produce a stifling effect on
the creativity and accountability of State and local governments.
In enacting General Revenue Sharing, Congress wisely concluded
that a new type of generalized, "no-strings" Federal assistance
was needed to get us back on the road to a sounder Federalism.
The revenue sharing funds distributed over the three years the
program has been in existence have helped the 50 States and
2
nearly 39,000 local communities maintain vital public services
and stabilize the crushing burdens of taxes upon which they
must depend as important sources of their own revenues.
The Administration has proposed extending the revenue sharing
program for 5 3/4 more years. The 3/4 year interval is designed
to take into account the forthcoming transition to a new October
Federal fiscal year. The program would next expire in September
1982. To permit State and local governments to properly plan
their FY 1977 budgets, it is important that Congress act soon
on this legislation.
The legislation which President Ford submitted to Congress in
April, 1975 would continue to provide $150 million annual
stairstep increases in funding level. The $150 million
increase which the existing program provides for its final
six-month entitlement period (July through December 1976) would
be spread out to cover a full twelve months. In effecting this
change, the Administration's proposed legislation authorizes that
$1.626 billion be distributed for the period beginning July 1, 1976,
and ending September 30, 1976, and that $6.542 billion be distributed
during the fiscal year beginning on October 1, 1976. The level of
funding increases by $150 million for each of the following fiscal
years through that beginning on October 1, 1981.
Over the 5 3/4 years during which the new program is to run, this
level of funding would result in a total distribution of $39.85
billion, plus a non-contiguous States' allowance of $27.5 million.
The $150 million stairstep increases represent approximately a
2.4% annual increase in funding at the present level of the
program. Measured another way, by FY 1982 the amount of
revenues shared will have increased by $937 million over the
current level of payments.
The President's proposal retains the present, uncomplicated
structure of the General Revenue Sharing program. State govern-
ments would continue to receive one-third of the total amount
allocated for each period; and the remainder would continue to
be allocated among units of local government. Only one
modification in the allocation formula has been suggested: an
increase in the maximum constraint imposed upon allocations to
local governments. Whereas the law now limits the amount a
local government can receive to 145% of the average local
statewide per capita-allocation, the President has recommended
increasing this limit to 175% at the rate of six percentage
points per year. This would permit additional funds to flow
to some larger, urban areas, with little net dollar loss to the
few places which now benefit from the effect of the constraint.
3
Improvements in the existing Act have also been proposed which
would clarify the nondiscrimination provisions of revenue
sharing law and require that opportunities be provided for
citizens to participate in decision-making with respect to
uses of the money.
General Revenue Sharing is by far the least expensive to
administer of the hundreds of Federal fiscal assistance programs
now in existence. This $30.2 billion, five-year program is
currently being administered by a total staff of approximately
100 persons at an annual operating cost of $3 million.
FEDERAL PAY
Background
Historically, the pay of Federal civilian white-
collar employees and of military personnel lagged
behind salaries for comparable work in the private
sector. The Pay Comparability Act of 1970 was designed
to bring the salaries of Federal white-collar employees
up to the same levels as comparable private sector
rates. Due to that law, virtually full comparability
now has been achieved except in the case of certain
executive, legislative, and judicial salaries which
are limited by other statutes. During the past six years,
pay raises have increased the salaries of Federal white-
collar employees by an average of 6.3% each year. Military
pay rates have been adjusted by the same average percentage
given to white-collar employees under the General Schedule.
Unlike salaries for white-collar employees and military
personnel, which are set on a nationwide basis, the pay
rates of Federal blue-collar employees (such as carpenters,
mechanics, and laborers) are set under a different system.
This "Federal Wage System" provides for comparability
between Federal and private sector pay rates in the same
locality and consists of 137 different locality schedules
established at varying times on an annual basis. Certain
features of the current law governing this system have
resulted in Federal blue-collar employees receiving rates
which exceed those paid their private sector counterparts.
For example, the present legal requirement that each grade
have five steps, with the second step equated to the
prevailing private sector rate, means that Federal blue-
collar employees in the upper steps are paid more than
comparable local rates.
Over the years, criticisms have been made and questions
raised (e.g., by the General Accounting Office) concerning
some of the methods currently used to measure comparability
for both white- and blue-collar workers. Accordingly,
in his 1976 Budget Message, the President announced his
intention to establish a high-level advisory group to
conduct a comprehensive review of the major Federal
civilian employee compensation systems and to present
to him policy recommendations on how the Federal Government
could best determine the appropriate levels of total com-
pensation for its employees.
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President's Panel on Federal Compensation
In June 1975, the President's Panel on Federal Com-
pensation was established. It was chaired by Vice
President Rockefeller. The primary objective of the
Panel's review was to ascertain any needed changes in
Federal compensation policies and practices, keeping
in mind the goal of a system which is fair and equitable
both to Federal employees and to the public and which,
at the same time, enables the Federal Government to
attract and retain a capable workforce.
After careful study, the Panel concluded that the
basic principle of comparability with the private sector
is the correct basis for setting Federal salaries, but
they also recommended a number of ways in which the
application of this principle can be improved. These in-
clude splitting the General Schedule (under which white-
collar employees are paid) into two schedules, in order to
more closely approach comparability; determining salaries
for clerical and technical employees on a locality basis;
further exploring the feasibility of comparing pay and
benefits on a total compensation basis; and using the
Advisory Committee on Federal Pay in ways that will
encourage a more cooperative relationship between labor
and management representatives in the comparability-
determination process.
Presidential Administrative Action
The President has approved the Panel's recommendations,
in broad outline, and has directed that steps be taken to
work out specific proposals. Some of the recommendations
involve administrative changes in the way white-collar
pay rates are compared with those in the private sector.
Decisions on the precise nature and extent of changes
in the methods used will depend, in part, on recommendations
of the President's pay agent, the Federal Employees Pay
Council, and the Advisory Committee on Federal Pay later
this year. For example, it has been decided that the pay
agent will broaden the occupational base of the wage survey
by including secretaries and computer operators. The
agent will be working with the Pay Council in the coming
months on the weighting of pay rates by employment distri-
bution and, for purposes of arriving at budget estimates,
it has been assumed that a decision on weighting methods
will be made prior to the October 1976 pay adjustment.
3
Legislative Changes
The President's Panel on Federal Compensation also
recommended reform of those aspects of the law governing
wage board pay rates that result in blue-collar Govern-
ment workers earning more than comparable non-Government
employees. The President will propose legislation to
achieve this purpose. The budget proposals include the
effect of this legislation and estimate a 3.4% pay
adjustment in the wage board system for FY 1977. It
should be noted that the estimates assume no employee
will receive increases of less than 3%.
Work has begun to develop legislation necessary to
implement other Panel recommendations. It is anticipated
that such legislation will be submitted to the Congress
early in the current session.
Economy and Pay Limitations
It is clear that, in the months ahead, the President
and the Congress will have to call upon all citizens for
continued restraint in order to maintain economic stability.
It would be inequitable and ineffective to issue such a
call unless the Executive Branch had exercised a degree of
economic restraint within its own house over those items
which are within its control. A possible restraint on
Federal salary increases is not intended to reflect
adversely on the Government's esteem for its employees,
but rather an overriding concern for the country and
its citizens as a whole.
Full comparability pay at this time might be incon-
sistent with other efforts to strengthen the economy and
bring inflation under better control. Thus, the President
is considering ways to limit the size of Federal pay
raises if it becomes necessary for the economic well-being
of the nation and until such time as economic and
budgetary objectives more nearly have been achieved. A
final decision on whether pay will be restrained, and
how, will be made by the President in the late summer
after a review of the economic conditions at that time
and of the recommendations of his pay agent, the Pay
Council, and the Advisory Committee.
4
Impact on FY 1977 Budget
The budget assumes that pay increases in October
1976 will be limited to 5% and that no employee will
get less than 3%. Each 1% increase in Federal pay
rates above this estimate would raise the Federal
payroll by approximately one-half billion dollars. A
return to comparability is assumed in FY 1978. The
total cost of pay increases for FY 1977, based on
these assumptions regarding civilian and military pay,
is about $2.4 billion distributed as follows (in billions) :
Defense
Other agencies
Total
Civilian personnel
.6
.8
1.3
Military personnel
1.0
*
1.0
Total
1.6
.8
2.4
*Less than $50 million.
Note: figures do not add due to rounding.
Budget Document Cross References
Further information on these matters can be found in
Part 5 of the Budget, under "Allowances," and in Special
Analysis H.
Federally-Administered Retirement Systems
The Federal Government operates five major retirement
systems:
-- Social Security
-- Railroad Retirement
-- Civil Service
-- Foreign Service Retirement
-- Military Service Retirement
The Administration is proposing improvements in all those
systems.
Summary of budget proposals
Social Security
The Administration is proposing a social security tax
increase of 0.3% for both employer and employee, effective
January 1, 1977. This will overcome the immediate problem
of trust fund annual outgo exceeding trust fund annual
income. For the average individual worker, this will
result in an increase in 1977 social security taxes of
$22.50. The added tax will increase trust fund revenues
by an additional $3.5 billion in 1977.
The Administration is also proposing legislation to cure
a flaw in the present method of computing social security
benefits. If left alone, this flaw would eventually result
in retirement benefits higher than pre-retirement wages.
The Administration proposal will keep in effect the same
ratio between retirement benefits and pre-retirement wages
that exist today.
The Administration is proposing three items of legislation
affecting benefits, which will save $826 million in FY 1977:
Prohibiting a retroactive lump-sum payment, if this
would permanently reduce a beneficiary's monthly check;
Making the retirement test a solely annual test, by
dropping the present monthly test; and
Beginning a phase-out of student benefits, with sup-
port of needy students to come from education programs.
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Federal Civilian and Military Retirement
These systems all increase benefits to account for the
change in. the Consumer Price Index (CPI), as does social
security. They all contain, however, an extra 1% add-on
to the change in the CPI; this feature progressively over-
compensates beneficiaries for increases in the cost-of-
living. The Administration is proposing legislation to
remove this feature from all the systems.
Social Security
The social security system, which provides retirement,
survivors, and disability benefits to covered workers,
is the largest social insurance program in the world.
Benefits are financed from contributions made by employers
and employees to the trust funds. Under current law, the
following payroll tax rates apply to employer and employee
on the first $15,300 in wages:
OASI
4.375%
DI
.575%
HI
.900%
Total Social Security 5.850%
Since both employer and employee pay this rate, the total
tax rate is 11.7%.
Social security covers approximately 90% of employment in
the United States. The major groups not covered are:
State and local employees, railroad workers, and Federal
military and civilian employees. In the current year,
social security benefits totaling $71.3 billion will be
paid to 32.1 million retired or disabled workers and
their dependents and survivors.
In general, a worker becomes insured for social security
purposes by earning (and paying social security taxes on)
a minimum of $50 per quarter for 40 quarters. An insured
worker's survivor and dependents are eligible for benefits
based upon the worker's earnings.
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The Near-Term Financing Problem
The most immediate problem facing the social security
trust funds is that they are paying more out in benefits
than they collect in social security taxes from current
workers. As a result, the trust funds' assets (generated
from cash surpluses from earlier years) are shrinking.
Under present law, the social security system will, if
current trends continue, use up trust funds resources by
the early 1980's.
In order to assure that trust fund resources are not
depleted further, the Administration is proposing a tax
increase of 0.3% on both employees and employers, effective
beginning January 1, 1977. On the average, this will
result in a $22.50 increase in social security taxes
deducted from an individual's wages in 1977.
In addition, the Administration is recommending three
other legislative changes to the OASDI program that would
have an immediate impact on its growth, with expenditure
reductions of as much as $.8 billion in fiscal year 1977.
They are as follows:
Prohibit lump-sum retroactive payment when this
would permanently reduce a beneficiary's monthly
check;
Remove the monthly retirement test, thus applying
the retirement test solely on an annual basis;
and
Phase out students' benefits.
The Longer-Term Financing Problem
Solving the near-term problem discussed above will not
completely eliminate a second "solvency-crisis" for the
social security system after the 1980's. While they may
seem a long way off, events taking place today are lending
to that problem in the future.
In short, today's working people are earning claims on the
social security system--that is, buying promises of future
retirement benefits by paying taxes today--which the trust
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funds will have enormous difficulty in paying. This is
caused primarily by a low birth rate which, if sustained,
will mean a lower ratio of workers-to-retirees in the
year 2000 and thereafter. Simply put, while we have 3
workers paying social security taxes to support each
retiree in 1975, in 2000 there will only be about 2 workers
per retiree. A lower ratio results in the need for higher
payroll taxes per worker since fewer of them are working
to support each retiree.
While there is little we can do about the birth rate, we
can try to see that the retirement benefits for today's
working men and women are kept within reason and within
the ability of the labor force of the next century to
pay. A substantial portion of the projected deficiency
could be avoided by removing a flaw in the current method
used to compute social security benefits. If left unchanged,
it would more than compensate future beneficiaries for
increases in wages that occur between now and the time they
retire. It even could lead to the situation where many
future beneficiaries could receive a higher income from
social security than they previously had obtained from
working. The Administration is proposing to eliminate
this flaw by maintaining for all future beneficiaries the
same ratio of benefits to pre-retirement earnings that
exists for people who retire today. By making this change,
roughly half of the projected long-term actuarial deficit
would be eliminated.
Civil Service Retirement
The civil service retirement and disability system was
created to provide annuities for eligible Federal employees
and their survivors. Membership in the civil service
retirement system consists of approximately 2.7 million
employees. As of June 30, 1976, about 1,472,000 retired
employees and survivors will receive monthly benefits
totaling over $8.0 billion annually. The system is fi-
nanced by matching contributions from the government and
from employees. Benefits are based upon years of service
and the average of the highest 3 years of earnings.
Annuities under the CSC retirement system are adjusted to
provide cost-of-living increases to reflect increases in
the Consumer Price Index (CPI). Whenever the CPI increases
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by 3% above the base month and remains at that level or
higher for 3 consecutive months, the annuity is increased
by the highest percentage reached during the 3-month
period, plus 1%, effective on the first day of the third
month after the 3-month period, with the increase actually
paid on the first of the following (sixth) month. The 1%
add-on was enacted in 1969 to compensate for the lag
between price increases and annuity increases. It is
neither a timely nor an accurate method of maintaining the
purchasing power of an annuity over time. It undercom-
pensates slightly in the short run and progressively over-
compensates in the long run. In the long run, in other
words, this provision provides increases in annuities
which are larger than the increases in the CPI.
Vast increases have occurred in payment to Federal
retirees during the last 5 years. The average civil
service retirement payment to annuitants has risen from
$283 per month (June 30, 1970) to $528 per month (June 30,
1975). Elimination of the 1% add-on will save $69 million
in 1977.
Military Retirement
The military retirement system is noncontributory, and
is financed by appropriations to the Department of Defense.
In the current year, benefits of $6.9 billion dollars will
be paid to 1.1 million retired military personnel.
Benefits are based upon years of service and basic pay
immediately prior to retirement. A minimum of 20 years of
service is required for eligibility for retirement and the
maximum annuity can be no higher than 75% of basic pay
immediately prior to retirement.
The average payment to military annuitants has risen from
$372 per month (June 30, 1970) to $452 per month (June 30,
1974).
The military retirement system contains the same 1% add-on
as the civil service retirement system. The Administration
is proposing legislation to eliminate the 1% bonus from the
military retirement system as well as the civil service
retirement system. This will result in outlay savings of
$215 million in 1977.
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Railroad Retirement
The railroad retirement system covers railroad workers,
and is the only federally-administered retirement system
for a specific industry's employees. Railroad retirement
benefits are composed of two tiers: the first is equiva-
lent to a social security benefit and is financed in the
same manner, i.e., employers and employees pay a total of
5.85% each on the first $15,300 of earnings. The second
tier, equivalent to a staff pension, is financed by a tax
on employers of an additional 9.5% of payroll. In addi-
tion, a $250 million annual payment is made from appropri-
ated funds to cover the cost of the windfall portion of
benefits received by persons covered under the railroad
retirement and social security systems. This windfall
benefit will be phased out by the year 2000, and the
appropriated funds payment will cease. In the current
year, $3.5 billion in retirement, disability and survivors
benefits will be paid to slightly over 1 million recipients.
Under the Administration's proposal to increase the social
security tax by 3% each for employer and employee, the tax
rate on railroad employers and employees to finance the
first tier of benefits will also rise by .3% to 6.15% each
in January 1, 1977.
Foreign Service Retirement
The Foreign Service retirement system, generally quite
similar in operation to the civil service retirement sys-
tem, covers approximately 8,000 employees of the Department
of State, the United States, Information Agency, and the
Agency for International Development. In the current year,
$66 million will be paid under this system to Foreign Service
annuitants, who will number approximately 4,500 on
June 30, 1976.
The Foreign Service retirement system contains the same 1%
bonus feature as the civil service and military retirement
systems, and the Administration is proposing legislation to
eliminate that feature. This will reduce outlays by
$1 million in 1977.
Drug Abuse: Prevention, Treatment, and Law Enforcement
Drug abuse is a tragic national problem which strikes
at the heart of our national well-being. Counting
narcotic-related crime, addicts' lost productivity,
criminal justice system costs, and treatment and
prevention program as major items, estimates range
from a conservative $10 billion upwards to $17 billion
a year. In addition, the costs in terms of ruined
lives, broken homes, and divided communities is
incalculable.
Accordingly, the highest priority has been given to
eliminating this threat over the past half decade, with
total Federal expenditures growing from less than $100
million to over three quarters of a billion dollars for
a comprehensive program of prevention and treatment, law
enforcement, and international control. Real progress
was made, but by early 1975, it was clear that conditions
were worsening and that gains of prior years were being
eroded. For example, "street" availability of heroin
measured by price and purity, was increasing. Waiting
lists for treatment existed again, after almost having
disappeared. Drug related deaths and drug related
appearances in hospital emergency rooms were increasing.
Drug related crimes were on the upsurge.
&
FORD
Deeply concerned about this evidence of increasing
availability and use of drugs, President Ford directed
GERALD
LIBRARY
a high priority review of the entire Federal effort in
drug law enforcement, treatment and prevention, and inter-
national control. He asked for a frank assessment of
the extent of the problem and for detailed recommendations
for making the Federal program more effective. The President
has endorsed the resulting White Paper on Drug Abuse, and
the numerous Federal agencies and departments involved in
the drug program are moving rapidly to implement its major
recommendations for minimizing the adverse effects and social
costs of drug abuse.
The President's FY 1977 budget requests sufficient funds to
implement all of the white papers major recommendations.
For example, in line with white paper recommendations,
additional resources are provided for:
the growing problem of amphetamine and barbiturate
abuse. The white paper concludes that chronic,
intensive, and medically unsupervised use of amphetamines
and barbiturates ranks just behind heroin abuse as a
major social problem, affecting several hundred
thousand Americans. To respond, the budget requests
funds for treatment demonstrations for abusers of
these substances, and provides 20 new positions within
the Drug Enforcement Administration (DEA) for
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2
strengthened regulatory and compliance activities
aimed at preventing diversion of amphetamines and
barbiturates from licit production;
additional community treatment capacity. Funds are
included for the National Institute on Drug Abuse (NIDA)
to fund at least 7000 new community treatment slots
and to recover 1000 lost to inflation, thus providing
Federally-supported community-based capacity to treat
102,000 individuals at one time. In addition, other
managerial actions will ensure greater utilization of
existing community mental health institutions for
drug users, and the treatment capacity of the Bureau
of Prisons, the Veterans Administration, and the
Department of Defense for their specialized clientele will
be maintained;
better targeting of law enforcement effort at high
level traffickers. The Drug Enforcement Administration
will add 82 positions for improved intelligence and
laboratory analysis aimed at supporting the existing
investigation and enforcement effort. In addition,
research will be focused on improving our capability
to monitor drug abuse trends, and on developing tools
and techniques to. improve the productivity of investi-
gations and agents;
improve job opportunities for ex-addicts. Additional
funds are provided for a joint HEW/Labor program to
investigate ways to provide employment opportunities
for persons in and completing treatment, so that the
distressing situation of returning to the same
conditions which led to drug use can be avoided. In
addition, other managerial actions should ensure
improved application of our vocational rehabilitation
services to drug users.
These specific budget increases are relatively modest because
it was the unanimous conclusion of the task force which
prepared the white paper that the most significant progress
could be made in the drug program through (1) more selectivity
and targeting in the use of the current $750 million budget;
(2) better intra- and inter-agency management; and (3) more
effective mobilization and utilization of all the resources
available in the Federal Government, State and local governments,
the private community and from foreign governments engaged
in the world-wide effort to combat drug trafficking. In line
with this concept, the budget provides for:
3
continued material and technical support for
other nations involved in the fight against drug
trafficking and for the training of foreign narcotic
agents;
continuation of the DEA Task Force Program which
capitalizes on joint Federal and local efforts,
and continued training and laboratory support
for State and local officers;
a major multi-year program within the National
Institute on Drug Abuse to evaluate the outcome
of various types of treatment.
In addition to these budgetary actions, existing resources
are being retargeted to focus law enforcement efforts on
high level drug traffickers and to ensure that treatment is
provided to those individuals suffering most from drug abuse.
Other actions underway should ensure increased interface
between the treatment and criminal justice systems to assure
that apprehended drug users are identified and provided
opportunities for treatment. In the area of inter-agency
coordination, officers of the Drug Enforcement Administration,
the Immigration and Naturalization Service, and the U.S.
Customs Service and their respective cabinet departments
have prepared and signed joint "Memoranda of Understanding"
identifying operating guidelines which should end jurisdictional
disputes and improve cooperation between them.
In the international area, the President has spoken personally
to Presidents Echeverria of Mexico and Lopez-Michelsen of
Columbia and with Prime Minister Demirel of Turkey in an
effort to strengthen cooperation among all nations involved in
the fight against illicit drug traffic. Attorney General
Levi has recently discussed mutual drug control problems
with the Attorney General of Mexico, and the President has
directed Secretary of State Kissinger to express to the
Mexican government his personal concern that we explore
opportunities for improved control.
The President has also directed the Domestic Council Drug
Abuse Task Force which prepared the white paper to reconvene
and prepare recommendations for improving our ability to
control drug trafficking along the southwest border.
4
The President has also taken steps which require Congressional
approval before they come into force. For example, he has
proposed a mandatory minimum sentence for drug traffickers.
He has urged Congress to ratify the Convention of Psycho-
tropic Substances, so the United States can fulfill our
obligation to other nations of the world to see that strong
international controls exist for all drugs. Finally, the
President has stated that he will send to the Congress a
comprehensive message on drug abuse establishing a framework
for broad government responses in the weeks ahead.
EFFORTS TO INCREASE OPERATING EFFICIENCIES
Federal agencies are making a concerted effort to
take actions to increase their operating efficien-
cies and thereby reduce program costs.
Following are some examples of proposed agency
efforts to increase operating efficiencies. Be-
cause these examples address specific efforts
within an agency, they do not necessarily explain
the overall changes in agency employment levels.
Agriculture
The Department of Agriculture plans to eliminate
700 overhead positions through improved manage-
ment procedures and greater use of computer
processes for administrative purposes.
The proposed consolidation of categorical grant
programs to feed needy children will free 320
positions in the Food and Nutrition Service and
will result in improved program administration.
Commerce
Consolidation of weather observation activities
and improvements in weather analysis and pre-
diction techniques are anticipated to increase
productivity that will result in savings in the
National Oceanographic and Atmospheric Adminis-
tration. Similar productivity increases are
expected in processing patent applications at
the Patent Office and in producing statistical
data series by the Bureau of the Census. Com-
bined, these efforts will permit a reduction of
191 full-time permanent positions.
Defense
Proposed actions to adjust fringe benefits and
to correct inequities in the current military
compensation system will save over $200 million
in 1977 and $400 million in 1978.
Civilian employment will be reduced through con-
solidation of functions. Estimated savings are
$100 million in 1977 and $400 million in 1978.
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The Department of Defense plans to reduce the
amount of administrative travel 5% below 1975
levels. In addition, permanent change of sta-
tion travel is to be reduced by implementing
policy changes to (1) permit reassignment over-
seas from Hawaii, rather than requiring an
intermediate tour in the continental United
States; (2) create a limited home basing program
that allows dependents to remain at a home base
during unaccompanied overseas tours; and (3)
require prescribed average overseas tour lengths
avoiding shortened tour periods. Program savings
are estimated to be about $250 million in 1977.
Construction programs for 1977 will be limited
to those essential for mission performance.
The reduced family housing program, which is
being held to a lower level than was appropriated
by Congress in 1976, reflects more reliance on
available housing in the local community.
Estimated program savings are about $900 million
in 1977.
Efficiencies are proposed in training and pro-
ficiency flying programs, including expanded
use of simulator and other training aids that
allow substantial fuel savings. Estimated
savings in 1977 are about $200 million.
Favorable 1975 recruiting experience permits
lower levels in future enlistment bonuses.
Reductions proposed will save about $30
million in 1977.
Health, Education, and Welfare
The Social Security Administration (SSA) will
increase its producvitity by 3% in 1977,
enabling SSA to handle its work with 2,350
fewer staff-years than if it operated at 1976's
productivity levels.
The proposed consolidation of 27 separate grants
for education into a single block grant will
reduce current administrative costs associated
with each of the individual programs. In addi-
tion, the block grant will permit States to use
funds according to their own needs and priori-
ties in the area of education.
3
A health block grant will be proposed to con-
solidate medicaid and 15 narrow categorical
health programs that provide funds for various
health services groups, communities, or delivery
mechanisms. As in the case of the education
block grant, this proposal will result in a
reduction of administrative program costs and
will also eliminate about 2,400 positions.
Increased productivity and 46 additional po-
sitions will help the Guaranteed Student Loan
Program to intensify its collection activities
and meet its 1977 collection target of $33
million.
Housing and Urban Development
Significant reductions are envisioned in
community planning and development staff due
to the replacement of categorical programs
by the more efficient Community Development
Grant Program.
Productivity increases are projected in the
mortgage insurance, property management, and
other activities of the Department.
Justice
The Federal Bureau of Investigation assumes a
1% increase in agent productivity to (1) achieve
a more appropriate balance between workforce and
anticipated caseload and (2) assure continued
caseload selectivity.
Productivity gains in the Immigration and
Naturalization Service will result in reduced
outlays for port-of-entry inspections and
background investigations of immigrants
seeking U.S. citizenship.
Overtime costs will also be reduced through
productivity increases and management improve-
ments.
4
Labor
The Employment Service anticipates a savings
of 534 staff-years as a result of increased
efficiency and reduction of administrative
and management support activities. Estimated
savings of $53 million are expected in 1977.
Based on experience and Federal-State plans to
improve procedures, the Unemployment Insurance
Service expects a 3% increase in productivity
for the base staff which will save about $11
million. In addition, efforts to automate
certain procedures in the unemployment insurance
service in a limited number of States will also
result in savings in future years.
Transportation
Technological advances have enabled the Coast
Guard to automate previously manned lighthouses.
Maintenance and watchstanding personnel require-
ments are decreased by about 75%. In 1977, 30
military positions will be eliminated as a
result of this program.
As a result of automation efforts in the air
traffic control operation, the Federal Aviation
Administration (FAA) is able to moderate the rate
of growth of the air traffic controller workforce
required to ensure a safe and efficient air
transportation system.
A significant portion of FAA's facilities and
equipment program will be directed toward
replacing equipment and modifying facilities
where the maintenance workload has been ex-
cessive. This approach is cost effective in
that the workload demand for maintenance staff
is lessened.
Treasury
The Internal Revenue Service plans increased
productivity of 2% for staff devoted to the
following functions: data processing, collec-
tions, taxpayer services, audit, tax fraud,
taxpayer conferences, and review of employee
retirement plans.
5
The U.S. Customs Service plans on a 2.4% staff
reduction based on increased productivity.
This reduction should not adversely affect the
processing of expected workload or the inter-
dicting of drugs and other contraband.
Nuclear Regulatory Commission
Continued progress is expected in reducing the
time required to issue a nuclear power reactor
construction permit. The average time will be
reduced from 21 months to 16 months during 1977.
The goal is to reduce this time period to an
average of 14 months.
National Foundation on the Arts and the Humanities
The Foundation expects to process 14% (or
3,500) more applications for assistance during
1977. This will be accomplished through in-
creased productivity and with little or no
increase in administrative costs.
National Aeronautics and Space Administration
NASA proposes a reduction of 500 civil service
positions and related reductions of approximately
900 staff-years of contractor support effort, as
the result of an extensive "institutional assess-
ment" designed to clarify the roles and missions
of NASA field centers. When completed in FY 1979,
the manpower adjustments are projected to result
in savings of about 3,700 staff-years -- an 8%
reduction below the 1976 employment levels.
Jan. 17, 1976
FY 1977 Budget
Indian Programs
Budget Summary:
1976
1977
%
Agency/Program
Outlays
% of
Outlays
% of
Change
$ in M
Total
$ in M
Total
76-77
1. Bureau of Indian
Affairs
1,097
69
1,048
68
-4
2. Indian Health Service
339
21
348
23
+3
3. HEW/Office of Native
American Programs
39
3
39
3
--
4. Commerce/Economic
Development Admin.
21
1
17
1
-19
5. Dept. of Labor/Compre-
hensive Employment and
Training Act, Title III
48
3
50
3
+4
6. HEW/Indian Education Act
42
3
34
2
-19
Total
1,585
100
1,536
100
-4
Program Summary:
1. Bureau of Indian Affairs (Interior)
- A broad range of public services is provided to
approximately 580,000 Indians and Alaskan natives
including management of their lands under laws,
FORD
treaties, and trust obligations.
2. Indian Health Service (HEW)
- Provides the primary health resource for 518,000
Native Americans (most, but not all, of those served
by the Bureau of Indian Affairs) through 150 hospitals
and health centers and over 300 health stations.
3. Office of Native American Programs (HEW)
- Successor program to Office of Equal Opportunity
programs for Indians.
- Supports special projects contributing to social
and economic development of Native Americans.
67
2
4. Dept. of Labor/Comprehensive Employment and Training
Act of 1973 (CETA)
- Section 302 establishes a nationally-administered
Indian Manpower Program. The funds provided this
program are a percentage of total amounts available
for Title I of the same act.
- Authorized activities include on-the-job training,
job referral, institutional training, public service
employment, and other manpower services.
5. Economic Development Administration (EDA)
- Operates under the authority of the Public Works
and Economic Development Act of 1965 (Public Law
89-136), wherein certain Federal or State Indian
reservations qualify as redevelopment areas.
- Provides grants for planning and technical assistance
for overall reservation economic development and
individual project planning and grants for public
works assistance to improve the reservations infra-
structure in support of economic development.
6. US Office of Education/Indian Education Act (HEW)
- Provides financial assistance to local education
agencies for supplemental education needs of Indian
children.
Budget Policy Highlights:
- A new program of grants, training, and technical assistance
for strengthening tribal government will be instituted by
BIA in support of the Indian Self-Determination Act. An
increase in budget authority of $22 million is provided
for this purpose for a total of $33 million in 1977.
- Increases, though modest, are provided for operation
of many BIA programs and activities, e.g. education,
housing, and resources management, on which Indian tribes
have expressed their priorities.
3
- Outlays for the Indian Health Service will rise, with
an emphasis on ambulatory care and construction of
hospitals, clinics, and sanitation facilities.
Reductions and deferrals:
- The 1977 total for BIA programs, however, is down about
$50 M. The largest decrease is in the payments under
the Alaska Native Claims Settlement Act, which by law
drops from $70 M to $30 M in FY 1977. Two other decreases
are in uncontrollable trust fund outlays ($13 M) and the
planned use of most of the revolving fund in 1976.
- The BIA construction budget for 1976 reflects a deferral
of $10.9 M in budget authority for construction grants
to public school districts in Indian reservation areas.
This is being done in part as a means to restrain the
growth in Federal outlays since this is a new program
and in part because this program partially duplicates
existing HEW programs providing assistance to public
schools in reservation impacted areas.
- A rescission of $15 M in 1976 budget authority for the
Indian Education Act programs of the Office of Education
is proposed, and the 1977 budget authority is set at the 1976
level after rescission. The $15 M was the increase in
enacted appropriations for 1976 over the $42 M included
in the President's budget for that year, and the rescis-
sion is proposed because it is believed that $42 M is
sufficient to achieve the purposes of this program.
- Reductions in funding for Indians in the Economic Devel-
opment Administration programs is consistent with the
overall reductions in these programs.
TRENDS IN FEDERAL CIVILIAN EMPLOYMENT
Total employment in the executive branch (excluding
the Postal Service) between June 30, 1975 and
September 30, 1977 is estimated to decrease by
nearly 16,000 (from 2,106,400 to 2,090,500). With
the exception of 1973, civilian employment is ex-
pected to reach its lowest level since 1966.
Federal civilian employment will be less than 20%
of employment by all governmental units (Federal,
State and local) as compared to more than 36% in
1947. As a percentage of the total employed labor
force, Federal employment is projected at 3% in
1977; the lowest level since World War II. During
the same period the percentage of State and local
employees has risen steadily from 6 to 13 percent
of the total employed labor force.
The commonly used and most meaningful employment
measure is full-time permanent employment. The
attached table displays, by major agency, full-
time permanent employment in the executive branch
from 1975 to 1977. (For additional information
refer to Special Analysis H "Civilian Employment
in the Executive Branch" U.S. Budget, 1977.)
FORD
LIBRARY
68
SUMMARY OF FULL-TIME PERMANENT CIVILIAN
EMPLOYMENT IN THE EXECUTIVE BRANCH
As of June 30
As of Sept.
1975
1976
30, 1977
Change
Agency
Actual
Estimate
Estimate
1976-77
Agriculture
79,133
80,400
80,400
Commerce
28,711
28,900
28,700
-200
Defense-mil.func.
954,721
930,700
924,000
-6,700
Defense-civ.func.
29,069
29,100
29,100
HEW
129,285
135,000
128,900
-6,100
HUD
15,142
15,000
15,700
700
Interior
58,088
59,200
59,300
100
Justice
49,032
51,600
51,700
100
Labor
13,427
14,600
14,900
300
State
22,324
22,900
22,900
Transportation
70,345
72,400
72,600
200
Treasury
108,138
113,500
110,000
-3,500
Energy Rsch & Dev
Administration
7,457
8,300
8,400
100
Env. Protection Agen.
9,160
9,600
9,600
GSA
36,400
36,800
36,000
-800
NASA
24,333
24,300
23,800
-500
VA
184,502
196,600
198,100
1,500
Other:
AID
6,185
6,200
6,200
CSC
6,670
6,800
6,900
100
FEA
2,978
3,200
1,800
-1,400
Nuclear Regulatory
Commission
2,006
2,300
2,500
200
Panama Canal
13,768
13,800
13,800
Selective Svc Sys
2,121
200
100
-100
SBA
4,127
4,300
4,400
100
Tennessee Valley
Authority
14,084
15,100
15,500
400
U.S. Information
Agency
8,662
8,800
8,800
Miscellaneous
37,484
40,200
40,200
Subtotal
1,917,352
1,929,800
1,914,300
-15,500
Contingencies
2,000
5,000
3,000
Subtotal
1,917,352
1,931,800
1,919,300
-12,500
Postal Service
558,311
542,600
543,600
1,000
Total
2,475,663
2,474,400
2,462,900
-11,500
211
IMPROVING FEDERAL MANAGEMENT
Each year the Federal Government reviews its respon-
sibilities and programs to seek improved methods of
focusing Federal resources on their highest priority
objectives. These reviews and studies have two
principal aims: improving the effectiveness of
Federal programs in achieving their intended aim;
and providing better management to reduce the costs
of Federal programs.
While many of the studies for 1977 have not yet been
determined, the following is a representative sample
of the major studies which are currently under way or
proposed:
STUDIES OF OVERALL FEDERAL MANAGEMENT, ADMINISTRATION
AND COMPENSATION
Commission on Federal Paperwork: This 2-year
study commission, with membership drawn from the
Executive, Congress, and the general public, convened
in October to develop methods of reducing the
reporting burden imposed on the public by numerous
Federal forms. The Commission's final report will
be submitted in December, 1977.
Privacy Protection Study Commission: This
Commission, established by the Privacy Act of 1974,
will examine the implications of government infor-
mation gathering and recordkeeping on the privacy
of individuals. The Commission will make recom-
mendations for enhancing individual privacy in the
future through better data management and computer
security policies.
Personnel Management Evaluations: The 1977
budget provides additional funds for the Civil
Service Commission to expand the number of full
audits and reviews of agency personnel management
systems. These reviews which will focus on job
classification practices and grade escalation are
expected to result in more efficient agency personnel
systems that will cost the government less.
FORD
712
Implementation of Recommendations of the
President's Panel on Federal Compensation: As part
of the implementation of the pay panel recommendations,
the Civil Service Commission will test through research
the total compensation approach. Through this approach,
the principle of comparability could be extended to
include benefits as well as pay.
Overhead Costs of Government: OMB has
initiated a set of interagency working groups to
develop methods for reducing government overhead and
administrative expenses.
Consumer Representation Plans: OMB and the
Consumer Protection Agency are working with 17 Federal
agencies to develop consumer representation plans,
aimed at giving consumers a greater voice in the
decisions of government which affect them, and
development of better consumer education and
information.
Productivity Improvements: An interagency
task group has developed a system to measure Federal
government productivity. Further studies will be
conducted to determine how government productivity
can be raised. Cooperation with the new National
Center on Productivity and Quality of Work Life is
expected.
Interagency Medical and Nonperishable
Subsistence Supply Management Committee: This
committee will establish a single system for
Government-wide management of medical and non-
perishable subsistence items for the Federal
government. By eliminating duplication by
executive agencies, the system will provide
increased effectiveness at a lower cost to the
Government.
Federal Audiovisual Committee: This
committee will develop and implement a policy to
eliminate duplication of audiovisual products,
services, equipment and personnel within the
Federal government. This policy will also elimi-
nate unwarranted government competition with the
private sector in the acquisition of audiovisual
services.
Interagency Committee for Food Procurement:
This committee will develop Federal marketing infor-
mation techniques to permit effective planning by
government agencies in their procurement of food
products. Better planning will reduce the cost of
food and facilitate the planning of meals by
dietitians.
Interagency Task Group on Procurement and
Supply of Commercial Products: The purpose of this
task group is to develop principles and guidelines
for procuring commercial products competitively
without the necessity of developing and using
Federal specifications. The objective is to
achieve greater economy and efficiency in the
procurement, storage and distribution of commercial
products.
Interagency Task Group for Small Research
and Development Firms: This task group will identify
ways to insure better use of the high technology
capabilities of small business firms. Specifically,
it will develop techniques for increasing contract
awards to small research and development firms so
that the innovative and economical contributions of
these firms to the Nation's technology base can be
preserved.
Interagency Federal Procurement Data System
Committee: This committee will establish a system
to collect, develop, and disseminate executive
agency procurement data that satisfies the needs
of the Congress, the executive branch, and the
private sector. The system will provide government-
wide statistics on the approximately $66 billion
expended annually for goods and services to meet the
needs of the government.
Grants Management Improvement Study: OMB is
currently conducting a study to better distinguish
between procurement and assistance-type relationships
and to further streamline assistance programs.
Joint Funding Study: OMB is working with a
variety of Federal agencies to assure the effective
implementation of the Joint Funding Simplification
Act. Regulations governing the program will be
promulgated in early 1976 and should facilitate
the delivery of Federal support for multi-purpose
projects.
Project Notification and Review Systems
Study (A-95) : During FY 1976, OMB is planning a
comprehensive evaluation of project notification
and review systems which are designed to facili-
tate state and local government evaluations of
federally assisted programs.
Intergovernmental Information Systems: OMB
is continuing to work with Federal agencies to
improve the availability of information on grant
programs to state and local governments. During
FY 1976, this will include expanded reporting on
projected budget changes, and more timely reports
on grant award decisions.
Assessment of Federal Field Coordination:
OMB will undertake assessment of Federal field
coordination systems including a comprehensive
review of Federal Regional Councils.
Quadrennial Commission on Executive,
Legislative, and Judicial Salaries: As provided
by public law, this commission will be appointed
this calendar year to study and make recommendations
to the President on the problem of "pay compression"
for high Federal officials, whose salaries are often
below those paid private sector executives with
comparable or less extensive responsibilities.
This commission will complete its report in time
for the President to prepare recommendations to
the Congress in January, 1977.
Comprehensive Plan for Federal Statistics:
All Federal statistical agencies with OMB leader-
ship are working with advisory committees and
policy advisory groups to determine needs for
improved statistical programs and to identify low
priority programs which should be discontinued.
A preliminary version of the plan, which will out-
line statistical developments throughout the 1900's,
will be available by early 1977.
GNP Data Improvement Project: A project
team is working under the direction of a public
advisory committee to review the data requirements
for improved estimates of components of the gross
national product. These estimates provide a
critical statistical framework for economic policy
decisions. The recommendations are expected by
mid-year 1976.