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    "label": "President's letter to Congress about budget deferrals and rescissions",
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    "title": "President's letter to Congress about budget deferrals and rescissions",
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    "url": "https://s3.amazonaws.com/NARAprodstorage/opastorage/live/14/3362/7336214/content/library/document/0248/whpr19740920-022.pdf",
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    "ocrText": "Digitized from Box 2 of the White House Press Releases at the Gerald R. Ford Presidential Library\nFOR IMMEDIATE RELEASE\nSEPTEMBER 20, 1974\nOffice of the White House Press Secretary\nTHE WHITE HOUSE\nTO THE CONGRESS OF THE UNITED STATES:\nThe recently enacted Congressional Budget and\nImpoundment Control Act of 1974 provides new procedures\nfor executive reporting and congressional review of actions\nby the executive branch affecting the flow of Federal\nspending. It thereby serves to make the Congress a full\npartner in the continuing struggle to keep Federal spending\nunder control.\nThe new law provides that the executive branch may\nseek to alter the normal course of spending either through\ndeferrals of spending actions or by asking the Congress to\nrescind authority to spend. The use of funds may be\ndeferred unless either House of the Congress enacts a\nresolution requiring that they be made available for\nspending. For executive rescission proposals to take\neffect, the Congress must enact rescission bills within 45\ndays of continuous session.\nFollowing these procedures, I am today reporting the\nfirst in a series of deferrals and proposed rescissions.\nAs is often the case in the institution of new pro-\ncedures, and in the implementation of new laws, there are\nquestions as to what the law may require of the executive\nbranch and what the Congress may expect. In this instance,\nthe Attorney General has determined that this act applies\nonly to determinations to withhold budget authority which\nhave been made since the law was approved.\nHowever, I am including in today's submission to the\nCongress reports on some actions which were concluded before\nthe effective date of the act. While these items are not\nsubject, in the Attorney General's opinion, to\ncongressional ratification or disapproval as are those\naddressed in the recent law, I believe that it is appro-\npriate that I use this occasion to transmit this\ninformation to the Congress.\nReasonable men frequently differ on interpretation\nof law. The law to which this message pertains is no\nexception. It is particularly important that the execu-\ntive and legislative branches develop a common understanding\nas to its operation. Such an understanding is both in\nkeeping with the spirit of partnership implicit in the law\nand essential for its effective use. As we begin manage-\nment of the Federal budget under this new statute, I would\nappreciate further guidance from the Congress. The added\ninformation on the status of funds not subject to Congres-\nsional action is being made available with this in mind.\nIt will also permit a better understanding of the status\nof some funds reported previously under the earlier\nimpoundment reporting law.\nVirtually all of the actions included in this report\nwere anticipated in the 1975 budget, and six of them were\ntaken before July 12, when the new procedures came into\neffect. Failure to take these actions would cause more\nmore\n2\nthan $20 billion of additional funds to become available\nfor obligation. The immediate release of these funds\nwould raise Federal spending by nearly $600 million in the\ncurrent fiscal year. More significantly, outlays would\nrise by over $2 billion in 1976 and even more in 1977, the\nfirst year in which the new procedures for congressional\nreview of the budget will be in full effect.\nThe deferrals of budget authority being reported\ntoday total $19.8 billion. The major deferrals are:\nGrants for waste treatment plant construction\n($9 billion). Release of all these funds would\nbe highly inflationary, particularly in view\nof the rapid rise in non-Federal spending for\npollution control. Some of the funds now deferred\nwill be allotted on or prior to February 1, 1975.\nFederal aid highway funds ($4.4 billion for\nfiscal year 1975 and $6.4 billion for fiscal\nyear 1976). Release of these funds would also\nbe highly inflationary and would have to be\noffset by cuts in higher priority programs.\nSome of the funds are being withheld pending\nresolution of court cases concerning the environ-\nmental effects of proposed highway construction.\nVarious programs of the Department of Health,\nEducation, and Welfare ($39.6 million). Pending\nenactment of the 1975 appropriations, HEW funds\nare being provided under a continuing resolution.\nAmounts available under the continuing resolution\nabove the budget request are deferred to preserve\nthe flexibility of the Congress and the\nAdministration in arriving at a final decision\non the funding levels for these programs.\nThe larger of the two rescissions which I am proposing\nwould write off the $456 million of budget authority pro-\nvided for rural electric and telephone loans at a 2 percent\ninterest rate. The release of these funds would be incon-\nsistent with the legislation enacted in 1973, which limits\nthe availability of 2 percent loans to cases of special need.\nLoans to borrowers who meet the specified criteria can be\nfinanced out of funds provided by the pending Agriculture\nAppropriations Act.\nThe deferrals and rescissions covered in this first\nreport are those believed to be of particular interest to\nthe Congress and which would have significant impact on\nbudget spending if released. They are summarized in the\nattached table. A second report of a series on additional\ndeferrals and rescissions will be submitted to the Congress\nsoon.\nBudgetary restraint remains a crucial factor in our\nefforts to bring inflation under control. In today's\nenvironment, we cannot allow excess Federal spending to\nstimulate demand in a way that exerts further pressures\non prices. And we cannot expect others to exercise\nnecessary restraint unless the Government itself does so.\nThe responsible apportionment of congressional\nappropriations and other Federal budget authority is an\nessential -- though often controversial -- element of\nbudget execution. Sound management principles and common\nmore\n3\nsense dictate that Federal agencies spend money in an\norderly fashion and only to the extent necessary to carry\nout the objectives for which the spending authority was\nprovided. Current economic conditions require extra care\nto assure that Federal spending is held to the minimum\nlevels necessary.\nThe deferrals and rescissions described in the attached\nreport represent an essential step toward the goal of re-\nducing spending and achieving the balanced budget we seek\nby fiscal year 1976. These actions, by themselves, will\nnot be enough. However, failure to take and sustain this\nimportant step would jeopardize our ability to control\nFederal spending not only during the current fiscal year\nbut, more importantly, for several years to come.\nGERALD R. FORD\nTHE WHITE HOUSE,\nSeptember 20, 1974.\n#####\n- 4 -\nSUMMARY\nPROPOSED RESCISSIONS AND DEFERRALS\n(dollars in thousands)\nBudget\nItem\nAuthority\nRescissions:\nAppalachian Regional Development Programs:\nAirport Construction*\n40,000\nAgriculture: Rural Electrification\nAdministration: Loans*\n455,635\nDeferrals:\nTo be deferred part of year:\nCorps of Engineers - General construction\n108\nHealth, Education and Welfare:\nLibrary resources\n5,437\nhigher education:\n(University community services)\n2,906\n(Land grant colleges)\n9,500\n(State postsecondary education commissions)\n350\nSchool assistance in federally affected areas.\n16,000\nRehabilitation services (innovation\nand expansion)\n5,000\nPublic assistance (Child welfare services)\n375\nEnvironmental Protection Agency:\nConstruction Grants*\n9,000,000\nGeneral Services Administration:\nAutomatic data processing fund\n4,300\nTo be deferred for entire year:\nAgriculture: Agriculture research\nservice (Construction) *\n770\nCommerce: Fisheries loan fund*\n4,039\nInterior:\nOregon and California Grant lands*\n23,693\nConstruction and rehabilitation\n1,055\nUpper Colorado River Basin fund\n1,150\nState: International Center, Washington, D.C\n500\nTransportation: Federal-aid highways\n1975 & prior programs\n4,370,090\n1976 program\n6,357,500\nForeign Claims Settlement Commission:\nPayment to Vietnam prisoners of war\n10,500\nGeneral Services Administration:\nAutomatic data processing fund\n14,000\nTotal\n20,322,908\n*Action taken prior to enactment of the Impoundment Control\nAct on July 12, 1974.\n# # # #"
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