Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
7336214
label
President's letter to Congress about budget deferrals and rescissions
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
7336214
sourceUrl
contentType
document
title
President's letter to Congress about budget deferrals and rescissions
citationUrl
collections
White House Press Releases (Ford Administration)
Press Releases
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
7336214
levelOfDescription
item
productionDates
day
20
logicalDate
1974-09-20
month
9
year
1974
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
18f0f1748116d3fc
ocrText
Digitized from Box 2 of the White House Press Releases at the Gerald R. Ford Presidential Library
FOR IMMEDIATE RELEASE
SEPTEMBER 20, 1974
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
The recently enacted Congressional Budget and
Impoundment Control Act of 1974 provides new procedures
for executive reporting and congressional review of actions
by the executive branch affecting the flow of Federal
spending. It thereby serves to make the Congress a full
partner in the continuing struggle to keep Federal spending
under control.
The new law provides that the executive branch may
seek to alter the normal course of spending either through
deferrals of spending actions or by asking the Congress to
rescind authority to spend. The use of funds may be
deferred unless either House of the Congress enacts a
resolution requiring that they be made available for
spending. For executive rescission proposals to take
effect, the Congress must enact rescission bills within 45
days of continuous session.
Following these procedures, I am today reporting the
first in a series of deferrals and proposed rescissions.
As is often the case in the institution of new pro-
cedures, and in the implementation of new laws, there are
questions as to what the law may require of the executive
branch and what the Congress may expect. In this instance,
the Attorney General has determined that this act applies
only to determinations to withhold budget authority which
have been made since the law was approved.
However, I am including in today's submission to the
Congress reports on some actions which were concluded before
the effective date of the act. While these items are not
subject, in the Attorney General's opinion, to
congressional ratification or disapproval as are those
addressed in the recent law, I believe that it is appro-
priate that I use this occasion to transmit this
information to the Congress.
Reasonable men frequently differ on interpretation
of law. The law to which this message pertains is no
exception. It is particularly important that the execu-
tive and legislative branches develop a common understanding
as to its operation. Such an understanding is both in
keeping with the spirit of partnership implicit in the law
and essential for its effective use. As we begin manage-
ment of the Federal budget under this new statute, I would
appreciate further guidance from the Congress. The added
information on the status of funds not subject to Congres-
sional action is being made available with this in mind.
It will also permit a better understanding of the status
of some funds reported previously under the earlier
impoundment reporting law.
Virtually all of the actions included in this report
were anticipated in the 1975 budget, and six of them were
taken before July 12, when the new procedures came into
effect. Failure to take these actions would cause more
more
2
than $20 billion of additional funds to become available
for obligation. The immediate release of these funds
would raise Federal spending by nearly $600 million in the
current fiscal year. More significantly, outlays would
rise by over $2 billion in 1976 and even more in 1977, the
first year in which the new procedures for congressional
review of the budget will be in full effect.
The deferrals of budget authority being reported
today total $19.8 billion. The major deferrals are:
Grants for waste treatment plant construction
($9 billion). Release of all these funds would
be highly inflationary, particularly in view
of the rapid rise in non-Federal spending for
pollution control. Some of the funds now deferred
will be allotted on or prior to February 1, 1975.
Federal aid highway funds ($4.4 billion for
fiscal year 1975 and $6.4 billion for fiscal
year 1976). Release of these funds would also
be highly inflationary and would have to be
offset by cuts in higher priority programs.
Some of the funds are being withheld pending
resolution of court cases concerning the environ-
mental effects of proposed highway construction.
Various programs of the Department of Health,
Education, and Welfare ($39.6 million). Pending
enactment of the 1975 appropriations, HEW funds
are being provided under a continuing resolution.
Amounts available under the continuing resolution
above the budget request are deferred to preserve
the flexibility of the Congress and the
Administration in arriving at a final decision
on the funding levels for these programs.
The larger of the two rescissions which I am proposing
would write off the $456 million of budget authority pro-
vided for rural electric and telephone loans at a 2 percent
interest rate. The release of these funds would be incon-
sistent with the legislation enacted in 1973, which limits
the availability of 2 percent loans to cases of special need.
Loans to borrowers who meet the specified criteria can be
financed out of funds provided by the pending Agriculture
Appropriations Act.
The deferrals and rescissions covered in this first
report are those believed to be of particular interest to
the Congress and which would have significant impact on
budget spending if released. They are summarized in the
attached table. A second report of a series on additional
deferrals and rescissions will be submitted to the Congress
soon.
Budgetary restraint remains a crucial factor in our
efforts to bring inflation under control. In today's
environment, we cannot allow excess Federal spending to
stimulate demand in a way that exerts further pressures
on prices. And we cannot expect others to exercise
necessary restraint unless the Government itself does so.
The responsible apportionment of congressional
appropriations and other Federal budget authority is an
essential -- though often controversial -- element of
budget execution. Sound management principles and common
more
3
sense dictate that Federal agencies spend money in an
orderly fashion and only to the extent necessary to carry
out the objectives for which the spending authority was
provided. Current economic conditions require extra care
to assure that Federal spending is held to the minimum
levels necessary.
The deferrals and rescissions described in the attached
report represent an essential step toward the goal of re-
ducing spending and achieving the balanced budget we seek
by fiscal year 1976. These actions, by themselves, will
not be enough. However, failure to take and sustain this
important step would jeopardize our ability to control
Federal spending not only during the current fiscal year
but, more importantly, for several years to come.
GERALD R. FORD
THE WHITE HOUSE,
September 20, 1974.
#####
- 4 -
SUMMARY
PROPOSED RESCISSIONS AND DEFERRALS
(dollars in thousands)
Budget
Item
Authority
Rescissions:
Appalachian Regional Development Programs:
Airport Construction*
40,000
Agriculture: Rural Electrification
Administration: Loans*
455,635
Deferrals:
To be deferred part of year:
Corps of Engineers - General construction
108
Health, Education and Welfare:
Library resources
5,437
higher education:
(University community services)
2,906
(Land grant colleges)
9,500
(State postsecondary education commissions)
350
School assistance in federally affected areas.
16,000
Rehabilitation services (innovation
and expansion)
5,000
Public assistance (Child welfare services)
375
Environmental Protection Agency:
Construction Grants*
9,000,000
General Services Administration:
Automatic data processing fund
4,300
To be deferred for entire year:
Agriculture: Agriculture research
service (Construction) *
770
Commerce: Fisheries loan fund*
4,039
Interior:
Oregon and California Grant lands*
23,693
Construction and rehabilitation
1,055
Upper Colorado River Basin fund
1,150
State: International Center, Washington, D.C
500
Transportation: Federal-aid highways
1975 & prior programs
4,370,090
1976 program
6,357,500
Foreign Claims Settlement Commission:
Payment to Vietnam prisoners of war
10,500
General Services Administration:
Automatic data processing fund
14,000
Total
20,322,908
*Action taken prior to enactment of the Impoundment Control
Act on July 12, 1974.
# # # #