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    "ocrText": "The original documents are located in Box 36, folder \"Office of Management and Budget -\nGeneral (5)\" of the Philip Buchen Files at the Gerald R. Ford Presidential 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 Gerald R. Ford donated to the United\nStates of America his copyrights in all of his unpublished writings in National Archives collections.\nWorks prepared by U.S. Government employees as part of their official duties are in the public\ndomain.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 of the Philip Buchen Files at the Gerald R. Ford Presidential Library\nTHE WHITE HOUSE\nWASHINGTON\nmis\nJuly 1, 1976\nMEMORANDUM FOR:\nPAUL O'NEILL\nFROM:\nPHIL BUCHEN\nP.\nAttached is correspondence between Chrysler and GSA concerning\nGSA's interpretation and implementation of the Buy American Act.\nInsofar as GSA and DOD have procurement regulations which\ntreat differently the same Canadian auto products, I believe it\nwould be appropriate for the Office of Federal Procurement\nPolicy to look into this issue. I do not favor one interpretation\nover the other, but I do wonder whether the Federal Government\nshould have such inconsistencies in its procurement policy.\nGERAL,\nTHE WHITE HOUSE\nWASHINGTON\nJuly 1, 1976\nMEMORANDUM FOR:\nPAUL O'NEILL\nFROM:\nPHIL BUCHEN\nP.\nAttached is correspondence between Chrysler and GSA concerning\nGSA's interpretation and implementation of the Buy American Act.\nInsofar as GSA and DOD have procurement regulations which\ntreat differently the same Canadian auto products, I believe it\nwould be appropriate for the Office of Federal Procurement\nPolicy to look into this issue. I do not favor one interpretation\nover the other, but I do wonder whether the Federal Government\nshould have such inconsistencies in its procurement policy.\nCERALD\n?\nares\nMay 26, 1976\nMr. W. C. Hoffarth\nGeneral Services Administration\nFederal Supply Service\nCrystal Mall, Bldg. 4, Room 921\nWashington, D.C. 20406\nDear Bill:\nChrysler Corporation continues to be quite concerned over certain\naspects of the Buy American Act, specifically as they apply to our\nmedium tonnage trucks built at our Windsor Truck Plant in Canada.\nIt would be greatly appreciated if you could clarify to us GSA's\nrulings in certain areas of this Act which have posed a problem to\nour company and are directly responsible for our failing to respond\nto certain solicitations.\nFirst, a clarification of the word \"component\" as used in the Buy\nAmerican Act is requested. It is Chrysler's position that truck\nmodels assembled at the Windsor Truck Plant which contain more than\n50% U.S. -manufactured parts and assemblies, which are subsequently\nshipped to a domestic body builder for completion and whose value\nexceeds 50% of the completed unit, should not be considered as a\nsingle foreign-made component subject to a 6% penalty.\nSecondly, an explanation of GSA's position that a complete unit,\nmanufactured at the Windsor Truck Plant and containing more than 50%\nU.S. -made components, be subjected to a 6% penalty. Chrysler\nCorporation's viewpoint is that such a vehicle should not be assessed\nan additional 6% at the time of bid evaluation based on the fact that\nthe majority of parts, assemblies, and components are U.S.-produced.\nFinally, Chrysler must take issue with GSA's apparent position that it\nis more important where a vehicle is assembled rather than the per-\ncentage of domestically produced parts, assemblies, and components\nused in the final unit. The basic intent of the Buy American Act\nappears open to question when it is possible to have a vehicle assembled\ndomestically and containing 51% U.S. components considered a \"domestic\nend product\" but yet have a Windsor-produced unit with 75% U.S. content\nbe considered foreign and subject to a 6% penalty.\nFORD\nGERALD\n1100 CONNECTICUT AVE., N.W., WASHINGTON, D.C. 20036\nGSA's rulings and interpretations concerning the Buy American Act\nas set forth in the Federal Procurement Regulations not only serve\nto restrict bidding but also appear to be in direct conflict with the\nU.S.-Canadian Automotive Trade Agreement, one of the purposes of which\nis to expand trade in automotive products between the United States\nand Canada. In addition, the military (TACOM) accepts Windsor-built\nvehicles, regardless of percentage of content, the same as domestically\nproduced vehicles with no penalty of any type imposed.\nYour statements and clarifications regarding the foregoing points would\nbe of great assistance. Thank you for your continued cooperation.\nVery truly yours,\nF. R. Henderson\nManager, Federal Government\nVehicle Sales\nFRH:msh\ncc: Mr. Philip W. Buchen\nCounsel to the President\nThe Hon. William S. Broomfield\nThe Hon. Elford A. Cederberg\nMr. Calvin J. Collier\nChairman, Federal Trade Commission\nFORD & 03RALD LIBRARY\n1100 CONNECTICUT AVE., N.W., WASHINGTON, D.C. 20036\nJUN 15 1976\nMr. F. R. Henderson\nManager, Federal Government Vehicle Sales\nChrysler Motors Corporation\n1100 Connecticut Avenue, NW\nWashington, D. C. 20036\nDear Frank:\nThis is in response to your letter dated May 26, 1976, regarding\nour position on the application of the Buy American Act to vehicles\nassembled in Canada.\nCanadian goods and other foreign items are being evaluated in\naccordance with the Buy American Act as 1t is implemented by the\nFederal Procurement Regulations, FPR Subpart 1-6.1.\nUnder FPR Section 1-6,101(a), the term, \"Components\" 1s defined\nas \"...articles, materials and supplies which are directly incor-\nporated in end products\". In the case of manufactured products\nthe Buy American Act is applied to the end product itself and\nto the components directly incorporated in the end product, but\nis not applied to the supplies that are used in the manufacture\nof such component. Thus, an end product, in accordance with\n1-6.101 (d), 1s domestic in origin if (1) it is manufactured in\nthe United States and (2) the cost of its components which are\nmanufactured in the United States exceeds 50 percent of the cost\nof all its components.\nIf a completed vehicle is manufactured in Canada, it will be\nconsidered foreign regardless of the percentage of its domestic\ncomponents or supplies. Similarly, if a component is manufactured\nin Canada it will also be viewed as a foreign component regardless\nof the percentage of domestic supplies which were used in manufacturing\nthe component.\nIn instances where your firm indicates that it will offer a vehicle\nthat is partially built in Canada, such as & cab and chassis, and\nthen shipped into the United States for mounting of a body or\nother components and the value of the body or other components\n1s less than 50 percent of the total cost of the completed vehicle,\nthe Buy American differential will be applicable because the\nCanadian produced cab and chassis is a foreign component and the\nvalue of the component exceeds 50 percent of the total cost of\nthe vehicle.\n&\nFORD\nGERALD\nLIBRARY\n2\nIn regard to your statement that our interpretation of the Buy\nAmerican Act restricts competition, I cell to your attention\nour previous conversations wherein you were advised that one of\nyour major competitors also builds its cab and chassis in Canada\nand the Buy American differential is applied. The purpose of\nour conversation, from my viewpoint, was an attempt to convince\nyour firm to bid its Canadian built vehicles to induce competition\nsince both bids would be evaluated equally as far as the Buy\nAmerican differential was concerned.\nFurther, we do not find that our application of the Buy Ameri can\ndifferential to Canadian built vehicles is in conflict with the\nUnited States-Canadian Automotive Trade Agreement of January 16, 1965,\n(Congressional Record of January 22, 1965, Vol. III - Part 1, Page\n1061). The agreement between the United States and Canada concerning\nautomotive products appears to be primarily directed towards the\nliberalization of United States and Canadian automotive trade\nthrough the alimination of customs duties and related tariff barriers.\nIn our opinion, however, nothing in the agreement nor in the\nAutomotive Products Trade Act of 1965 (79 Stat. 1016), providing\nfor the implementation of the agreement, affords a basis for our\ndisregard of the provisions of the Buy American Act and Executive\nOrder No. 10582 in connection with automotive procurements. In\nfact, we consider the \"Agreement\" as applying to normal commercial\ntrade rather than to Government procurements.\nWe are aware that the Department of Defense, particularly for\nvehicles purchased for the military through TACOM, does not consider\nCanadian built vehicles as foreign made items and therefore does\nnot apply the Buy American Act to them. However, the Department\nof Defense and the General Services Administration are governed\nby two separate sets of regulations, which are respectively, the\nArmed Services Procurement Regulations (ASPR) and the Federal\nProcurement Regulations (FPR). As stated in ASPR Section 6-103.5,\nthe Secretaries of the Department of Defense have determined that,\nwith certain exceptions, application of the Buy American Act\nrestrictions to Canadian goods would be inconsistent with the\npublic interest. However, the Administrator of the General Services\nAdministration has not made such a determination, and the FPR\ntreats Canadian goods as any other foreign goods (FPR Section\n1-6.101).\nWe understand that you are seeking to obtain a similar implementation\nof the Buy American Act under the Federal Procurement Regulations\nthrough channels other than this office. II you are successful\nin obtaining a change in our regulations, this office, of course,\na\nFORD\nGERALD\nLIBRARY\n3\nwill evaluate future offers in accordance with any such revision.\nHowever, our present decision 1s as stated in the preceding paragraphs.\nIf you have any further questions regarding this matter please\ncontact us.\nSincerely,\n(Signed) W. C. Hoffarth\nW. C. HOFFARTH\nChief, Heavy Vehicles Branch\ncc: Official File - Buy American Act\nReading File - FYPH\nFY\nFYP\nLPO\nFB\nFV - Mr. Philip G. Read\nFPP\nWCH/14/76 :WCHOFFARTH :npb :16-78188 :6/14/76\nCONCURRENCE:\nLPO HDG 6/15/76\nDATE\nFYP H.G.Higden\nDATE 6/15/70\nFORD & 0ERALD LIBRARY\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nJuly 26\n400pm\nDate:\nTime:\nFOR ACTION:\nDick Parsons\nCC (for information): Jack Marsh\nKen Lazarus\nJim Cavanaugh\nRobert Hartmann\nEd Schmults\nMax Friedersdorf\nFROM THE STAFF SECRETARY\nDUE: Date: July 27\nTime: 930am\nSUBJECT:\nFirst 1977 Special Message under the Impoundment\nControl Act of 1974\nACTION REQUESTED:\nFor Necessary Action\nFor Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nplease return to judy johnston, ground floor west wing\nCounsel's Office has no strong objection to this rescission proposal\nbut requests that the President be advised that Senator Hruska\n(ranking Republican on the relevant Senate Appropriations Sub-\ncommittee) has communicated his opposition to the proposal (copy\nof letter attached). In view of Senator Hruska's position and the\nabsence of authority to reserve any of these funds due to the unique\nnature of the Corporation, the proposal can only have symbolic utility --\nthere is simply no chance of Congressional acceptance of the proposed\nrescission.\nKen Lazarus 7/27/76\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nFORD Libe\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJames M. Cannon\ntelephone the Staff Secretary immediately.\nFor the President\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\n1976\nSIGNATURE\nMEMORANDUM FOR:\nTHE PRESIDENT\nFROM:\nJames T Lynn\nSUBJECT:\nFirst 1977 Special Message under\nthe Impoundment Control Act of 1974\nThe first 1977 special message under the Impoundment Control\nAct of 1974 is attached for your signature.\nIn the message, you propose rescission of $45 million appropri-\nated above your $80 million budget request for payment to the\nLegal Services Corporation (LSC). The funds were appropriated\nin the State, Justice, and Commerce, the Judiciary, and Related\nAgencies Appropriation Act, 1977 (P.L. 94-362).\nThe rescission proposal would, if accepted by the Congress,\nhave the following program effects: (1) prevent increased\ngrantee staff salaries, (2) prevent expansion of LSC's admin-\nistrative staff, and (3) delay greater geographic coverage for\nthe program until evaluations are completed by LSC for all of\nits existing legal services grantees. The proposed rescission\nwould also reduce outlays in 1977 by $40 million and 1978 by\n$5 million.\nRECOMMENDATION\nI recommend that this proposal be transmitted to the Congress\nnot later than July 28, 1976. The timing of transmittal for\nthis proposed rescission has a special sensitivity. Our General\nCounsel is of the opinion that funds appropriated for payment\nto LSC (an independent, non-profit corporation) may not be\nreserved by OMB. In order for the 45 day congressional considera-\ntion period to be completed before the funds become available on\nOctober 1, 1976, the proposed rescission must be transmitted\nbefore the beginning of August.\nAttachment\nFORD\nTO THE CONGRESS OF THE UNITED STATES:\nIn accordance with the Impoundment Control Act of 1974,\nI herewith propose rescission of $45 million in budget\nauthority appropriated for payment to the Legal Services\nCorporation.\nApproval of this rescission proposal will reduce Federal\nspending by $45 million over 1977 and 1978. The proposed\nrescission would prevent unneeded expansion of Legal Services\nCorporation activities and delay greater geographic coverage\nuntil program evaluations are completed.\nThe details of the proposed rescission are contained in\nthe attached report.\nTHE WHITE HOUSE,\nsano\nCONTENTS OF SPECIAL MESSAGE\n(in thousands of dollars)\nRescis-\nBudget\nsion #\nItem\nAuthority\nOther Independent Agencies\nLegal Services Corporation\nR77-1\nPayment to the Legal Services\nCorporation\n45,000\nSummary of Special Messages\nfor FY 1977\n(Amounts in thousands of dollars)\nRescissions Deferrals 1/\nFirst special message\n45,000\n1/ Deferrals for fiscal 1977 cannot be proposed until October 1,\n1976, in accordance with section 1013 of P.L. 93-344.\nRescission Proposal No:\nR77-1\nPROPOSED RESCISSION OF BUDGET AUTHORITY\nReport Pursuant to Section 1012 of P.L. 93-344\nAgency\nLegal Services Corporation\nNew budget authority\n$125,000,000\nBureau\n(P.L. 94-362 )\nOther budgetary resources\nAppropriation title & symbol\nTotal budgetary resources\n125,000,000\nPayment to the Legal Services\nCorporation - 8160501\nAmount proposed for\nrescission\n$ 45,000,000\nOMB identification code:\nLegal authority (in addition to sec. 1012):\n31-22-0501-0-1-751\nAntideficiency Act\nGrant program\nX\nYes\nNo\nOther\nType of account or fund:\nType of budget authority:\nX\nAnnual\nX\nAppropriation\nMultiple-year\nContract authority\n(expiration date)\nNo-year\nOther\nJustification\nA rescission of appropriation authority under Section 1012 of the Impound-\nment Control Act of 1974 (P.L. 93-344) is proposed for $45 million for the\nLegal Services Corporation (LSC) The funds for LSC were appropriated in\nthe Departments of State, Justice, Commerce, the Judiciary, and Related\nAgencies Appropriation Act, 1977 (P.L. 94-362).\nFor fiscal year 1977 LSC requested, independent of the Administration,\na $60.3 million budget increase (above the $80 million Administration\nrequest) primarily to fund higher grantee attorney salaries and adminis-\ntrative expenses and expand the legal services programs' geographic\ncoverage. The Administration's budget request for LSC was made in the\ncontext of other competing priorities within the 1977 Budget.\nThis rescission for the additional amount appropriated over the Budget\nreflects the following considerations:\n(1) In its first year of existence (1976) the Corporation received\na 29% increase in its appropriation level over the previous\nyear's funding for the legal services program. The 1977 add-on\nrepresents another 35% increase over the 1976 appropriation.\n(2) Factors which should reduce the 1977 funding level below the B.\nFORD\nPrior to 1976, the legal services program was administered QUEALO by\n1976 appropriated level include:\nthe Community Services Administration.\n2\n(a) One-time costs in 1976 which will not need to\nbe incurred in 1977, such as start-up organiza-\ntional costs, special projects (e.g., back-up\ncenter study), and non-recurring supplemental\nfunding for certain grantees.\n(b) Savings which should be achieved in 1977 by\ndirectly conducting activities formerly\nhandled by back-up centers.\n(c) Reduced administrative costs for grantees due\nto the greater availability of well-qualified\nlawyers in the labor market.\n(3) Administrative overhead costs are projected by LSC to rise\nby over 80% in only two years at a time when reductions in\nsuch costs for regular Federal agencies have been urged by\nthe President and within the Congress.\n(4) Consideration by the Congress should be given to other sources\nof legal services for those who cannot afford private counsel.\nFor example, under authority of Section 308 of Title III of\nthe Older Americans Act of 1965, as amended, $1,125,000 of\nfiscal year 1977 funds have been reserved for the development\nof State level legal services activities for the aging. In\naddition, legal services programs can be sponsored by State\nand local governments through the Social Services (Title XX)\nand General Revenue Sharing programs. Private sponsorship\nof legal services (e.g., State and local legal aid societies,\nfoundations, donated legal assistance, reduced fees for low\nincome clients, etc.) should also be reviewed before major\nfunding increases are approved for LSC.\n(5) The Administration has urged that prior to any significant\nexpansion of the legal services program, LSC evaluate its\nexisting legal services grantees. Such evaluations, subject\nto public comment and review, should use standardized criteria\nand appraise grantees' quality, determine their needs, and\nassess the resources available from alternate providers.\nFurthermore, LSC's mandated studies on the existing staff-\nattorney program and alternative methods of delivery of\nlegal services should also be completed in fiscal year\n1977 before additional programs are funded.\nFORD\n3\nEstimated Effects\nThis rescission proposal for $45 million will prevent increased\ngrantee staff salaries and an expansion of LSC's administrative\nstaff. Greater geographic coverage for the program will be\ndelayed until evaluations based on standardized criteria are\ncompleted by LSC for all of its existing legal services grantees.\nOutlay Effect (estimated in millions of dollars)\nComparison with President's 1977 Budget:\n1. Budget outlay estimate for 1977\n82.8\n2. Outlay savings, if any, included in the budget\noutlay estimate\n-0-\nCurrent Outlay Estimates for 1977:\n3. Without rescission\n125.7\n4. With rescission\n85.7\n5. Current outlay savings (line 3-line 4)\n40.0\nOutlay Savings for 1978\n5.0\nOutlay Savings for 1979\n-0-\nR77-1\n4\nRELATED AGENCIES\nLegal Services Corporation\nPAYMENT TO THE LEGAL SERVICES CORPORATION\nOf the funds appropriated under this head in the Departments\nof State, Justice, and Commerce, the Judiciary, and Related\nAgencies Appropriation Act, 1977, to enable the Department\nof the Treasury to make payment to the Legal Services Corpora-\ntion to carry out the purposes of the Legal Services Corpora-\ntion Act of 1974 (P.L. 93-355), $45,000,000 are rescinded.\nTHE WHITE HOUSE\nWASHINGTON\n7/26/76\nTO: JIM CAVANAUGH\nRobert RDL D. Linder\nOMB\nTHE WHITE HOUSE\nWASHINGTON\nJuly 27, 1976\nDear Roman:\nThis is in response to your letter of July 22, relating to the\nFiscal 1977 appropriation for the Legal Services Corporation.\nPursuant to your request, the President has been apprised of\nyour opposition to a rescission of the $45 million appropriated\nabove the $80 million budget request. Additionally, I wanted\nto advise you of the fact that due to the unique nature of the\nLegal Services Corporation, OMB has not reserved and does\nnot intend to reserve any of the funds appropriated to the\nCorporation, an independent, non-profit entity. Thus, even\nassuming a rescission proposal under the Impoundment\nControl Act of 1974, the full appropriation will be available\nto the Corporation, absent affirmative Congressional action,\nas of October 1, 1976, the first day of the new fiscal year.\nI shall arrange to have you informed as soon as a decision is\nreached on the rescission proposal.\nWith best wishes,\nSincerely,\nThil\nPhilip W. Buchen\nCounsel to the President\nThe Honorable Roman L. Hruska\nUnited States Senate\nWashington, D. C. 20510\ncc: Max Friedersdorf - For Direct follow-up when decision is\nreached on the rescission proposal.\nJim Lynn - FYI\nJOHN L. MCCLELLA ARK., CHAIRMAN\nwarrans. MAGNUSON, WASH.\nMILTON R. YOUNG, N. DAK.\nJOHN =. STENNIS, MISS.\nROMAN L. HRUSKA, NEBR.\nJOHN D. PASTORE, R.L\nCLIFFORD P. CASE, N.J.\nPURCEPT C. AYRD. W.VA.\nHIRAM L. FONG, HAWAII\nvvo.\nEDWARD W. BROOKE, MASS,\nMONE\nMARE MATTIELO 0173.\nMinited States Benate\n28, WIS.\nTED ALASKA\nMONTOYA, N. MEX.\nCHARLES NCC MATHIAS. JR., MD\nDANIEL K. INCUYE, HAWAII\nRICHARD S. SCHWEIKER, PA.\nCOMMITTEE ON APPROPRIATIONS\nERNEST F. HOLLINGS, S.C.\nHENRY BELLMON, OKLA.\nBIRCH SAYH, IND.\nWASHINGTON. D.C. 20510\nTHOMAS F. EAGLETON, MO.\nLAWTON CHILES, FLA.\nJ. BENNETT JOHNSTON, LA.\nWALTER D. HODOLESTON, KY.\nJuly 22, 1976\nJAMES R. CALLOWAY\nCHIEF COUNSEL AND STAFF DIRECTOR\nMr. Philip W. Buchen\nCounsel to the President\nThe White House\nWashington, D. C.\nDear Phil:\nIt is my understanding that the President may recommend\nrescission of $45 million from the Fiscal 1977 appropriation for the\nLegal Services Corporation. This would mean a proposed reduction\nfrom $125 million to $80 million.\nYour good offices were most helpful in the recent decision\nnot to propose a rescission of the Corporations $4.3 million Fiscal 1976\nsupplemental appropriation. I am again asking your assistance to head\noff this latest action.\nAs the ranking Republican member of the responsible appropria-\ntion subcommittee, I have given careful attention to the Corporations\nrequest. I know the board chairman personally and have consulted\ncarefully with him regarding the program's plans and funding levels.\nAlthough I had reservations about the authorizing legislation, I am\nconvinced that the program is operating responsibly within the law.\nThe $125 million appropriation has my support. It is a responsible\nlevel for the forthcoming fiscal year.\nAlthough I understand the difficult budget priority choices\nfacing the President, I do not believe this proposed rescission is\nconstructive. I do hope my concern will receive careful consideration.\nWith kind personal regards,\nSincerely,\nRoman L. Hruska\nis\nFORD\nUnited States Senator\nNebraska\nGERALD\nRLH:dpj\nTHE WHITE HOUSE\nACTION MEMORANDUM\nWASHINGION\nLOG NO.: OMB\nDate:\nJuly 31, 1976\nTime:\nFOR ACTION:\nCC (for information):\nJim Cannon\nMax Friedersdorf\nJack Marsh\nPhil Buchen\nAlan Greenspan\nDave Gergen\nBob Hartmann\nJim Lynn\nFROM THE STAFF SECRETARY\nDUE: Date:\nTuesday, August 3\nTime: 10 A.M.\nSUBJECT:\nBrent Scowcroft memo 7/31/76 re\nDefense Budget Message\nACTION REQUESTED:\nFor Necessary Action\nX For Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nI favor the middle option of forwarding a message\nthat outlines only a more limited supplemental.\nT.W.B.\nPhilip W. Buchen\nCounsel to the President\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nFORD is LIBRARY GERALD\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJim Connor\ntelephone the Staff Secretary immediately.\nFor the President\nMEMORANDUN\nTHE WHITE HOUSE\nWASHINGTON\nACTION\nCONFIDENTIAL - GDS\nJuly 31, 1976\nMEMORANDUM FOR:\nTHE PRESIDENT\nFROM:\nBRENT SCOWCROFT\nB\nSUBJECT:\nDefense Budget Message\nJim Lynn has forwarded to you the attached defense budget message\nasking Congress for a $2. 4 billion reinstatement of deleted FY 1977\nprograms, a $1. 1 billion cut of those unrequested funds added by the\nCongress, and $1. 4 billion in additional funding to cover legislative\ninaction on our various defense economy proposals and a new request\nfor recruiting funding.\nI strongly support the programs for which funding is requested, but I do\nbelieve I should point out the possibility of some political difficulties\nwhich could be created by the all-inclusive aspect of the message in its\npresent form. Therefore, in weighing your decision, I believe you should\nconsider the following factors.\nThere are two general public perceptions of the defense budget -- the\npositive aspect of security and the negative element of high costs.\nBased upon the FY 1977 Defense Authorization Bill which you recently\nsigned, we are on particularly strong ground on both of these aspects.\nThe defense budget provides for important improvements in U.S. military\ncapability across the board, in land, sea, and air forces for strategic and\ngeneral purpose roles. This argument is solid even given the changes made\nin certain programs (most notably shipbuilding) by Congress. For the first\ntime in almost a decade, you have (in FY 1976 and FY 1977) increased our\nannual real dollar investment in national defense.\nOn the cost side, we have taken steps to save over $3 billion next year\nalone and $23 billion in the next five years through various economy\nmeasures. To the extent that Congress fails to act on that portion of these\nitems requiring new legislation, we have a strong argument to take to the\npublic as to Presidential budgetary restraint and Congressional inaction\nand perpetuation of inefficiency.\nCONFIDENTIAL - GDS\nWHM 5/8/00\nGERALD\nCONFIDENTIAL - GDS\n2\nWe will maintain this dual position of strength whether or not there is\na budget supplemental. Turning to the supplemental itself, I am con-\ncerned that its net results could turn out to be negative, While there is\nno doubt we are on strong ground in this message regarding such program\nas the AEGIS ships, the inclusion of virtually all the items cut from the\noriginal request ($2. 4 billion out of approximately $2. 9 billion) may aliena\nborderline supporters in Congress. This package would seem to constitute\na degree of argument with legislative budget adjustments unprecedented in\nrecent history. By strong implication we are saying that all our requests\nwere critically important and none of the Congressional action was tolerab\nin other words, it is a 100 percent insistence on our judgment. This\npotentially antagonistic implication is reinforced by the message's challeng\nthat Congress additionally delete the $1. 1 billion in programs added to our\noriginal request or accept responsibility for their cost implications when\nadded on top of our own large reclama.\nA resubmission of this size and at this time could hamper our otherwise\nstrong position that Congress has not exercised fiscal constraint and is\nrisking renewed inflationary trends. You have told Congress and the\npublic that the defense economies we proposed are critical and must be\nacted upon now in order to allow savings in FY 1977. You have already\nsent the Congress a strong message on this in your signing statement for\nthe FY 77 Defense Authorization Bill.\nConversely, limiting your reclama to the really critical items -- the\nAEGIS ships (DDG-47 destroyer) and the CSGN Nuclear Strike Cruiser\nadvanced procurement funding--would highlight your ongoing and forceful\nactions to continue to improve our military capability. It would dramatize\nyour position on strengthening capability and at the same time reduce the\nnegative aspects of budget size. In sum, it may be that to include restor-\nation of the many other small program cuts is not worth the potential\npolitical price.\nRECOMMENDATION\nThat you indicate your decision on the attached budget supplemental messag\nApprove the message (sign the message at Tab A)\nForward a message outlining a more limited supplemental\n(AEGIS and economies).\nDefer sending a message.\nCONFIDENTIAL - GDS\nOMB\nTHE WHITE HOUSE\nWASHINGTON\nAugust 6, 1976\nDear Mr. Andersen:\nThis is in response to your letter of July 15 regarding\nthe proposed Omaha Federal Office building.\nAs you know, the Office of Management and Budget is\ncharged with the responsibility of reviewing such\nproposals. Accordingly, I have referred your letter\nto that office for a substantive response. I under-\nstand OMB conducts a careful and detailed review of\nsuch proposals, which takes some time. However, they\nhave assured me that they will proceed diligently on\nthis matter.\nThank you for your expression of interest in this\nproposal, and please give my personal regards to\nJim Paxson.\nSincerely,\nPhilip W. Buchen\nCounsel to the President\nMr. Harold W. Andersen\nPresident\nOmaha World-Herald\nWorld-Herald Square\nOmaha, Nebraska 68102\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON D.C. 20503\nAUG 5 1976\nMEMORANDUM FOR: PHILIP BUCHEN\nFROM:\nDANIEL P. KEARNEY\nSUBJECT:\nPublic Inquiry - Harold W. Andersen\nWe received a letter similar to the attached from Mr. Andersen\ndirectly. We have prepared a reply, a copy of which is also\nattached. Since Mr. Andersen has gone to the trouble of\nsending at least three letters on this subject, we thought\nthat a more satisfactory response from his point of view\nwould be to send the one substantive response from OMB, and\nacknowledgement responses from the other persons to whom he\nhas written directly. For your convenience, we have attached\nan acknowledgement response for your signature.\nAttachments\n#251 ADLES\nTHE WHITE HOUSE\nWASHINGTON\nJuly 26, 1976\nplearmy\nMEMORANDUM FOR:\nPAUL O NEILL\nFROM:\nPHILIP BUCHEN\n)\nCould you please advise me on\nthe attached?\nAttachment\nOmaha Chorld-Berald\nThe Newspaper of the Midlands\nHAROLD W. ANDERSEN\nWorld-Herald Square\nPresident\nOmaha, Nebraska 68102\nJuly 15, 1976\n(402) 444-1000\nMr. Philip W. Buchen\nWhite House Counsel\nThe White House\n1600 Pennsylvania Avenue, N.W.\nWashington, D. C. 20500\nDear Mr. Buchen:\nI have written James Lynn and Richard Cheney to ask their help in\nexpediting an Omaha federal office building. At the suggestion of Jim\nPaxson, known to you through his efforts to preserve President Ford's\nbirthsite here in Omaha, I write to ask if you, too, could help to move the\noffice building project along quickly.\nIn April, the General Services Administration sent to OMB a prospectus\nfor a $27,000,000, 321,000-square-foot federal office building and a\n$3,600,000 refurbishing of an existing federal office building. GSA had\nestablished a strong need for the project and assigned it a high priority.\nFor many years The World-Herald has spearheaded efforts to revitalize\ndowntown Omaha. We believe that the proposed office building is a crucial\npart of a major downtown rebuilding effort, stimulated mostly by the private\nsector, that could arrest the spread of urban sprawl.\nThe proposed federal office building would fulfill a demonstrated\nneed for space for federal agencies. It would also complement the community's\nefforts to redevelop the city's core.\nAnything you could do to help would be appreciated very much.\nSincerely,\nHand W.\nHWA:DK\nHarold W. Andersen\nis\nFORD\nGERALD\nLIBRARY\nEXECUTIVE OFFICE OF THE PRESIDENT\nUNITED\nOFFICE OF management AND BUDGET\nWASHINGTON, D.C. 20503\nMr. Harold W. Andersen\nPresident\nOmaha World-Herald\nWorld-Herald Square\nOmaha, Nebraska 68102\nDear Mr. Andersen:\nThank you for your letter of July 15 to the Director\nconcerning the proposed Federal office building in\ndowntown Omaha.\nWe are presently evaluating the General Services\nAdministration's prospectus for this project. We\nrecently requested and received additional data from\nGSA to assist us in this assessment. The information\nyou supplied in your letter on construction activity\nin the private sector provides an additional set of\nfacts which will be helpful.\nWe appreciate your interest in this proposal as\nPresident of Downtown Omaha, Inc. Thank you for taking\nthe time to inform us of your views.\nSincerely yours,\nActing Director\n11.\nFORD\nGERALD\nLIBRARY\nOmaha\nThe\nNewspaper\nof\nthe\nMidiands\nJCGET\nCORRESPONDENCE to:\nHAROLD W. ANDERSEN\nWorld Herald Square\nPresident\nMAN\nControl Reply for 10pl\nMR. Vegrney Omaha,\nNebraska 68102\nJuly 15, 1976\n(402) 444-1000\nMr. James T. Lynn\nNot Due Date:\nDirector\nOffice of Management and Budget\nInfo Copies:\n0416 7-30\nThe White House\n1600 Pennsylvania Avenue, N.W.\nWashington, D. C. 20500\nDear Mr. Lynn:\nI write to ask for your help in expediting a new federal office building\nin downtown Omaha.\nThe Omaha World-Herald, for many years, has spearheaded efforts to\nrenovate the downtown area. I know the Ford Administration shares this news-\npaper's hope that by revitalizing the nation's central cities, the country can\nslow the flight of business to the suburbs and the resultant urban sprawl, with\nits adverse effects on energy efficiency, affordable housing and environmental\nhealth.\nAs president of Downtown Omaha, Inc., an organization of 175 businessmen,\nprofessional people and downtown property owners dedicated to economic development\nand promotion, I have taken a special interest in a handful of highly justifiable\nconstruction projects.\nThe private sector has shown its confidence in the downtown area by\ninvesting more than $120,000,000 since 1965. In the last few weeks, firm plans\nhave been made for a $14,000,000, 120,000-square-foot state office building and\neducation center; a $20,000,000, 350,000-square-foot utility company office\nbuilding; a 200,000-to-300,000-square-foot office building combined with a\n1,000-car parking garage; and a $1,500,000 addition to the convention center.\nThe prospects for substantial development that would arrest downtown\ndeterioration are very bright.\nWe were encouraged to learn that in April the General Services\nAdministration sent to the Office of Management and Budget a prospectus for a\n$27,000,000, 321,000-square-foot federal office building to be built in downtown\nOmaha, together with a $3,600,000 refurbishing of an existing federal office\nbuilding. GSA had concluded that there was a demonstrated need for the project.\nWe understand that GSA gave it a very high priority.\nThe progress of this project through the federal establishment has not\nkept pace with the pressure on GSA to find first-class space for several\ngovernment agencies. Recently the Missouri River Division of the Army Corps of\nEngineers set in motion a move from downtown to a suburban location. GREAT\nLIBRARY\nMr. James T. Lynn\nJuly 15, 1976\nPage Two\nWith GSA having publicly announced plans for a new federal office\nbuilding in February, 1975, owners of older downtown buildings realize that leases\nwith federal agencies would be short-term. Therefore, these owners cannot\njustify the expense of modifying their buildings for GSA's unique specifications.\nIf your office could expedite the federal office building, it would not\nonly be fulfilling a demonstrated need for space, but it would also be playing a\nkey role in supporting the private redevelopment of our city's core.\nWe would appreciate anything you can do.\nHarrld Sincerely, Harold W. W. Andersen ankrea\nHWA: DK\nFORD is OFRATO LIBRARY\nOMB\nTHE WHITE HOUSE\nWASHINGTON\nAugust 7, 1976\nMEMORANDUM FOR: BARRY ROTH\nFROM:\nPHIL BUCHEN\nT.\nSUBJECT:\nCIA BUILDING\nAt your request, I did talk to Tony Lapham on\nAugust 3rd about either cutting down the cost\nof the proposed project or having his office\nrender an opinion that, because funds for the\nproject have already been appropriated, no\nprospectus for the building is required. I\nassume he will get back in touch with either\nyou or me on the matter. So that your file is\ncomplete, I enclose the Ogilvie memorandum to\nJack Marsh.\nAttachment\nFORDO is GERALD LIBRARY\nm\nB\nTHE WHITE HOUSE\nWASHINGTON\nAugust 11, 1976\nMEMORANDUM FOR:\nDON OGILVIE\nFROM:\nPHIL BUCHEN\nT.\nAttached is a copy of a memorandum sent to\nme by John E. Murphy, Deputy Administrator\nof the Agency for International Development.\nI would like to arrange a meeting next week\non this subject and would appreciate your\nbeing able to attend. I have also sent a\ncopy of this to Assistant Attorney General\nScalia and will ask him to participate also.\nAttachment\nOMB\nTHE WHITE HOUSE\nWASHINGTON\nNovember 17, 1976\nMEMORANDUM FOR:\nDAN KEARNEY\nFROM:\nPHILIP BUCHEN P.W.B\nAttached is a recent letter to me from\nJudge Noel Fox to which is attached a\nletter written to him by Cal Collier\nwhen he was Associate Director for\nEconomics and Government.\nI would appreciate your responding to\nJudge Fox with a copy to me.\nCC: William Seidman\nAttachments\nTHE WHITE HOUSE\nWASHINGTON\nNovember 17, 1976\nDear Noel:\nAfter receiving your letter concerning\nthe court space situation in the new\nFederal Building in Grand Rapids, I\nimmediately passed it on to Mr. Daniel\nKearney, Cal Collier's successor. I\nhave asked him to respond directly to\nyou, and he will keep me informed.\nSincerely,\nThey Buchen\nCounsel to the President\nThe Honorable Noel P. Fox\nChief Judge\nUnited States District Court\nWestern District of Michigan\nGrand Rapids, Michigan 49502\nTHE WHITE HOUSE\nWASHINGTON\nNovember 29, 1976\nMEMORANDUM FOR:\nJIMCONNOR PHIL BUCHEN\nBK\nFROM:\nBOBBIE KILBERG\nTHROUGH:\nPHILIP BUCHEN P.\nSUBJECT:\nQuadrennial Commission Report\nThe Counsel's Office approves Jim Lynn's memo on\nthe above subject.\nHowever, we would suggest that Peter Peterson's\npress conference not be held at the White House\nin order to assure that the press clearly under-\nstands that the President has not studied or\ncommitted himself to the Committee's recommendations.\nAttachment\nTHE WHITE HOUSE\nCTION MEMORANDUM\nWASHINGTON\nLOG NO.:\nte: November 29, 1976\nTime:\nFOR ACTION:\nCC (for information):\nFYI-Bill Nicholson\nPhil Buchen\nAlan Greenspan\nJim Cannon\nJerry Jones\nMax Friedersdorf\nRon Nessen\nJack Marsh\nFROM THE STAFF SECRETARY\nDUE: Date:\nTime:\nCOB Today\nSUBJECT:\nJames T. Lynn memo, 11/29/76 re\nQuadrennial Commission Report\nACTION REQUESTED:\nFor Necessary Action\nX For Your Recommendations\nPrepare Agenda and Brief\nDraft Reply\nX For Your Comments\nDraft Remarks\nREMARKS:\nPLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.\nIf you have any questions or if you anticipate a\ndelay in submitting the required material, please\nJim Connor\ntelephone the Staff Secretary immediately.\nFor the President\nEXECUTIVE OFFICE OF THE PRESIDENT\nOFFICE OF MANAGEMENT AND BUDGET\nWASHINGTON, D.C. 20503\nNOV 29 1976\nMEMORANDUM FOR:\nTHE PRESIDENT\nFROM:\nJames T. Lynn\nSUBJECT:\nQuadrennial Commission Report\nThe Quadrennial Commission on Executive, Legislative,\nand Judicial Salaries has been operating for several\nweeks, and it is clear that the members are doing a\ncommendably thorough and conscientious job under the\nchairmanship of Peter Peterson. They have completed\ntheir public hearings and are now drafting their report.\nDuring this process, the Chairman will be touching base\nwith key Congressmen and perhaps others. The Commission\nis planning to review a first draft within the next few\ndays and is hoping to have its final meeting on\nNovember 30, with delivery of the printed report shortly\nthereafter.\nIf you concur, Chairman Peterson wants to release the\nformal report as soon as it has been delivered to you.\nHe would like to be able to hold a press conference and\ncommence, in earnest, a public education compaign con-\ncerning the desperate need to do something about execu-\ntive and judicial compensation. For this purpose, he\nreally will need to be free to use the Commission's\nreport.\nWe believe it is in your best interests to let the report\ngo public in advance of submitting your own executive\nsalary recommendations in the budget. Mr. Peterson is\nwilling, and it would seem preferable, to let the expected\ncontroversy focus on him for a month or more before you\nmake your recommendations. Of course, if asked, you\nprobably would want to indicate your continued support\nfor some adjustment without committing yourself to any-\nthing very specific. This provides time for you to better\ngauge public and media reaction and to consult with the\ncongressional leadership on your recommendations. Chairman\nPeterson would expect to do what he can to enlist under-\nstanding and support both prior to and after your decision\nand up to the point of congressional action on your recom-\nmendations.\n2\nThe main argument for withholding a report such as this\nwould be to give you time to review it and formulate a\nposition before its release. In this case, there seem\nno compelling reasons for doing SO. On the contrary,\nbecause of the great interest in the subject, there is\nstrong likelihood of leaks or damaging speculation if\nthe report is not released. We believe it best that the\nCommission's findings and rationale be made available,\nalong with their actual recommendations. Otherwise,\ncongressional and other opponents are likely to take\nadvantage of the opportunity to begin cricizing the\nrecommendations without the counter-balancing effect\nof the Commission's findings. In short, there are serious\nrisks in delay, with little or nothing to be gained.\nIt would be appropriate and useful for you to receive\nthe report personally from the Chairman and, perhaps\nthe entire Quadrennial Commission of nine. This could\nbe followed immediately by a meeting of the Chairman\nwith the press in the White House. Pete Peterson or\nRon Nessen could emphasize that you have not studied\nor committed yourself to the Commission's recommendations.\nSince Peterson needs an answer by the Commission's next\nmeeting on the 30th, I plan to inform him that I believe\nthis general approach will be acceptable to you, unless\nyou advise me otherwise before the 30th.\nOMB\nJanuary 14, 1977\nDear Congressman Fisher:\nAfter carefully considering your request that the\nPresident seek by Executive Order to extend the\ncoverage of 5 U.S.C. Section 6103(c), we have\ncome to the conclusion that it would be inadvisable\nfor the President to attempt to go beyond the\nexpressed intent of Congress.\nYou mentioned that an earlier Executive Order issued\njust prior to the 1973 Inauguration date may consti-\ntute a precedent for extending the application of the\nstatute. However, on careful analysis of the situation\nat that time, we find that such Executive Order attempted\nto meet circumstances not covered by the statute, namely\nwhere the Inauguration Day came on a Saturday when most\nFederal employees were not regularly scheduled to work.\nThe Order at the conclusion of Section 1 specifically\nprovided that the statute remained applicable to\nemployees who were regularly scheduled to work on\nJanuary 20, 1973, and therefore would not almon or\nexpand the effect of the statute for the day\nspecified in the statute.\nI trust this explanation clarifies our views under\nthe present statutory situation. Possibly you will\nwant to have the statute amended prior to the next\nInauguration Day.\nSincerely,\nPhilip W. Buchen\nCounsel to the President\nThe Honorable Joseph L. Fisher\nU. S. House of Representatives\nWashington, D. C. 20515\n,\nJack Marsh, Dick Cheney,\nbec: Bill Nichols\nPaul O'Neill, Ed Preston\nNo'D\nTHE WHITE HOUSE\nWASHINGTON\nJanuary 12, 1977\nMEMORANDUM FOR:\nWILLIAM NICHOLS\nFROM:\nPHILIP W. BUCHEN\nT.\nSUBJECT:\nRequest from Congressman Fisher\nthat the President Issue an\nExecutive Order for January 20,\n1977\nAttached at TAB A is a copy of 5 U.S.C. Section 6103.\nCongressman Fisher calls attention to the fact that\nsubsection C of that statute omits Loudoun and Prince\nWilliam Counties and certain cities in the Washington\narea where Federal employees are entitled to a holiday\non Inauguration Day. He points out that this discrep-\nancy was corrected by Former President Nixon with\nExecutive Order 11696 at TAB B.\nThe Congressman is requesting that a similar Order be\nissued by President Ford applying to January 20, 1977.\nIn view of the short time available, I would appreciate\nyour early decision on whether to recommend such a step\nand your proceeding to provide for assurance of such an\nExecutive Order if it is acceptable to the President.\nAttachments\nCC: Jack Marsh\nJim Lynn\nDick Cheney"
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