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[Economic Program Working Group Meeting 02/13/1981 (Michael Deaver Set)] (1)
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual
collections.
Collection: Deaver, Michael
Folder Title: Economic Program
Working Group Meeting
02/13/1981(Michael Deaver Set) (1)
Box: 37
To see more digitized collections
visit: https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories
visit: https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives
Catalogue: https://catalog.archives.gov/
RONALD REAGAN LIBRARY
TRANSFER/PARALLEL/OVERSIZE FILE SHEET
Please circle "preservation" (put in AV, etc.), "classified" (parallel filed in
vault/annex), "collection" (misfile, provenance), "RD/FRD" (parallel file),
"NATO" (parallel file), "SAP" (parallel file)
PRESERVATION CLASSIFICATION COLLECTION RD/FRD NATO SAP
FROM:
Collection
Fuller, Craig Files
Series
series IV Dubiest Fle
File Folder Title/Casefile #/NSC #
see below
Box Number
OA 8991 LFOA 30)
Description of Material:
1
[Economic Program working Group Meeting 02/12/1981
(Michael Deaver Set) (A(2)CD-C3)
2
[Economic Program workeng Group Meeting 02/13/1981
(Michael Deaver set) ] (1)-(3)
These are diplicates of Fuller materiel of dearly
marked for Deaver
TO:
Collection:
Deaver, Michael Files
Series: Series IV: Subject File
File Folder Title/Casefile #/NSC #
Box Number:
OA 8606 (Box 39)
Transferred by: dlso
Date: 10/19/2011
NEED ONE COPY IN ORIGINAL LOCATION
SECOND COPY WITH ITEM PARALLEL FILED OR TRANSFERRED
THIRD/FOURTH* COPY FOR COLLECTION FOLDERS - * IF TRANSFERRING TO/FROM TWO
COLLECTIONS
S:\ARCHIVES\Forms\Transfer sheet.docx
Rev. 3/7/2006
-
Mr. Michael K. Deaver
1st Floor, WW
TABLE OF CONTENTS
Department of Commerce
- Economic Development Administration (EDA) and Regional
Development (addressed 2/12/81)
1
- Maritime Subsidies
2
- National Oceanic and Atmospheric Administration (NOAA) Programs
3
Foreign Aid
- Adjustment
1
Department of Defense
- Savings and Budget Totals
1
- Defense Civilian Employment
2
Cross Cutting Issues
- Pay Raises for Civilian Employees
1
- Federal Civilian Employment
2
- Cost of Living Adjustments - Civilian
3
- Cost of Living Adjustments - Military
4
Department of Housing and Urban Development
- Planning Assistance
1
- Urban Development Action Grants
2
- Community Development Block Grants
3
- Rehabilitation Loan Fund
4
- Neighborhood Self-Help Development
5
- Public Housing Modernization
6
- Tenant Rent Burden
7
- Solar Energy and Conservation Bank
8
- Level of Subsidized Housing
9
Department of Education
- Elementary and Secondary Grants Consolidation
1
- Vocational Education
2
- Student Loans and Pell Grants
3
- School Assistance in Federally Affected Areas (Impact Aid)
4
- National Institute of Education
5
- Institute for Museum Sciences
6
- Student Loan Marketing Association (Sallie Mae)
7
Department of Transportation
- Federal Highway Program
1
- Urban Mass Transportation Capital Grants
2
- Airport Construction
3
- Northeast Corridor Improvement Projects
4
- Local Rail Service Assistance
5
2
Department of Transportation (cont'd.)
- Highway Safety Grants
6
- Cooperative Automotive Research Programs
7
- Highway Trust Fund Tax Receipts
8
Eliminate Federal Subsidies
- Mass Transit Operating Board
1
- Civil Aeronautics Board
2
- Coast Guard User Fees
3
- Waterway User Charges
4
- Eliminating Subsidies for Airport and Airway Users
5
- Conrail Subsidies
6
- AMTRAK
7
- Agriculture User Charges Proposals - Grain Inspection and Cotton
and Tobacco Classing and Inspection
8
Water Resources Development
- Reduced Fundingfor Ongoing Construction
1
Other Independent Agencies
- Low Priority Veterans Services
1
Compensation Adjustment for Unemployability
Cancellation/Deferral of VA Medical Facility Construction
Reduce Interest Rate Subsidy on Insurance Loans
Beneficiary Travel
G.I. Bill Benefits for Flight Training and Correspondence Courses
- NASA Retrenchment
2
- NSF Retrenchment
3
- Appalachian Regional Commission
4
- National Endowments
5
- Corporation for Public Broadcasting
6
- National Consumer Cooperative Bank
7
- EPA Waste Treatment
8
- U.S. Postal Service Subsidy
9
Department of Commerce
SUBJECT:
Economic Development Administration (EDA) and Regional Development
Commissions
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Expected Savings:
Current Base:
Budget Authority
712
718
785
851
916
984
Outlays
605
726
764
806
885
938
Policy reduction:
Budget Authority
-389
-686
-729
-792
-851
-970
Outlays
-50
-226
-304
-539
-673
-882
Reagan Budget:
Budget Authority
323
32
56
59
65
14
Outlays
555
500
460
267
212
56
Change Proposed:
Funding for EDA and the Regional Commissions would be terminated starting in the
second half of FY 1981.. There is a lack of consistent and convincing evidence that
EDA programs are cost effective and actually create new jobs and capital investment
The Regional Commissions have been poorly managed and have been involved largely wi
local--rather than truly regional--projects. More effective ways to promote econom
development will be used: (1) The Administration's overall economic strategy of tax
and regulatory reductions is a more effective way to promote private sector
operations. (2) An Administration Task Force will explore the enterprise zone conc
which proposes incentives for the private sector to invest in distressed areas. (3)
Modest increases to the Community Development Block Grant program will be proposed.
Funds provided under this program can be used in a flexible manner by county and ci
jurisdictions.
2/11/81,
Department of Commerce
SUBJECT: Termination of Direct Subsidies to the Maritime Industry
(in millions of dollars)
1981
1982
1983
1984
1985
198
Expected Savings:
Current Base:
Budget Authority
488
585
1,000
1,081
1,127
1,04
Outlays
609
630
695
785
978
1,08
Policy reduction:
Budget Authority
-93
-160
-528
-571
-580
-46
Outlays
-11
-28
-126
-251
-420
-51
Reagan Budget:
Budget Authority
395
425
472
510
547
58
Outlays
598
602
569
534
558
57
Change Proposed:
The Federal subsidies to support new merchant ship construction would be elimina
starting with the remaining FY 1981 funds. No new construction subsidies would
proposed for FY 1982-1986 and no new commitments for operating differential subs
would be made. The subsidies contribute to inefficiencies in the market place a
ship operations. The negative effect on shipyard employment will be offset by t
expanded Navy shipbuilding program. The amounts provided for merchant ship
construction contribute very little to maintenance of the shipbuilding base. As
follow-on to the President's maritime policy statements last summer, the Secreta
Commerce would convene a conference of top maritime and shipbuilding leaders to
explore ways and means of formulating a maritime policy. (The resulting near-te
outlay savings are small due to the Government's 20-year obligation under existi
operating differential subsidy contracts.)
SUBJECT: National Oceanic and Atmospheric Administration (NOAA) Programs
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Expected Savings:
Current Base:
Budget Authority
92
184
224
262
275
268
Outlays
145
175
217
265
274
249
Policy reduction:
Budget Authority
-9
-152
-202
-238
-250
-241
Outlays
-6
-59
-135
-207
-237
-223
Reagan Budget:
Budget Authority
83
32
22
24
25
27
Outlays
139
116
82
58
37
26
Change Proposed:
In FY 1982, the Coastal Energy Impact Program (CEIP) and the Coastal Zone Management
(CZM) State Grant Program would be terminated. Federal grant assistance to Sea Grar
Colleges would be reduced by 50%. The development of the National Ocean Satellite
System (NOSS) would be deferred indefinitely. CEIP is not necessary because project
local impacts from coastal oil and gas development are not beyond the capabilities <
State/local actions. Coastal zone management and marine research programs are alread
operational in the majority of affected States. Twenty-five states (covering 78
percent of the coastline) already have received several years of federal assistance
develop, implement, and administer their CZM programs. The 16 institutions designat
as Sea Grant Colleges have developed marine research expertise on
local/state/regional bases. While of long-term scientific importance, the global
weather data to be generated by NOSS is not urgent and the project can be deferred.
FOREIGN AID ADJUSTMENT
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
5,430
7,246
6,567
7,680
8,188
8,644
Outlays
4,944
5,180
5,666
6,360
6,912
7,430
Policy reduction
Budget Authority
-616
-1,866
-180
-2,474
-2,948
-3,157
Outlays
-85
-409
-591
-1,065
-1,527
-1,827
Reagan Budget
Budget Authority
4,814
5,380
6,387
5,201
5,240
5,487
Outlays
4,859
4,771
5,075
5,295
5,385
5,603
The 1982 budget level for foreign aid will be cut by $1.8 billion from Carter
budget levels. All of the reductions will be in development assistance as
shown in the table. These reductions will eliminate spending in low priority
areas, will begin modifications in U.S. participation in certain multilateral
institutions, and will require the design of new approaches to foreign aid to
achieve objective with less money. The Agency for International Development
program will be reduced by as much as 20 percent, to $1.9 billion. Payments
to many of the multilateral institutions will be stretched out. Soft loans
for agricultural commodity imports under the P.L. 480 food aid program will
also be cut back. Specific program changes will be made final in the near
future.
February 12, 1981
SUBJECT: Department of Defense Savings
Expected savings:
($ billions)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
169.1
195.9
221.1
246.4
272.9
301.4
Outlays
156.9
181.5
205.1
228.7
253.8
280.4
Proposed Reduction 1/
Budget Authority
-.4
-4.2
-6.2
-7.5
-8.5
-9.4
Outlays
-.3
-3.9
-5.9
-7.0
-8.0
-8.9
Revised Base
Budget Authority
168.6
191.7
214.9
238.9
264.4
292.0
Outlays
156.6
177.6
199.3
221.7
245.8
271.6
Proposed Increase
Budget Authority
+8.2
+30.4
+44.9
+61.7
+81.5
+105.0
Outlays
+1.3
+8.2
+29.7
+45.3
+63.2
+82.5
Reagan Budget
Budget Authority
176.8
222.1
259.8
300.6
345.9
397.0
Outlays
157.9
185.8
229.0
267.0
309.0
354.0
1/
The proposed reduction assumes a military pay raise of 9.1% in FY 1982. A
higher pay raise would reduce annual savings for each year by $1.4 to
$1.8 billion.
Proposed reductions. Three categories of savings are proposed:
-- Pay adjustments. Caps on Federal pay, limiting the frequency of retiree
cost-of-living payments to once a year, and withdrawal of the Carter
Administration's military retirement reform legislative proposal are
included.
-- Operations. A major effort to achieve economies in the defense basing
structure will be initiated through base closings and realignments as well
as contracting out. Application of the constraints on travel, consultants,
and administrative reforms in service and construction contracts (Davis
Bacon Act, Service Contract Act) will produce additional savings.
-- Acquisition reform. Managerial improvements include increased use of
multi-year procurements, more economical production order quantities and
increased competition in the award of contracts. Marginal systems will be
terminated. Productivity investments with high potential savings will be
emphasized.
Proposed increases include additional funds for
-- Improvements in military readiness to include additional training,
equipment, ammunition, spare parts and operations.
-- Accelerated modernization by more rapid replacement of obsolete equipment.
-- New initiatives including providing for a new manned bomber, and a
substantial increase in Navy shipbuilding to include commitment to a
ALL AGENCIES
SUBJECT: Pay Raises For Civilian Employees
Expected savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
-
$5,800
$10,700
$15,300
$19,700
$24,100
Outlays
-
5,600
10,400
15,100
19,400
23,700
Policy reduction
Budget Authority
-
-3,900
-5,500
-6,500
- 7,100
- 7,700
Outlays
-
-3,800
-5,300
-6,500
- 7,000
- 7,600
Reagan Budget
Budget Authority
-
1,900
5,200
8,800
12,600
16,400
Outlays
-
1,800
5,100
8,600
12,400
16,100
Change proposed:
Under current law, Federal civilian pay rates must be adjusted annually
to keep them "comparable" with private sector pay. Because of pay caps
used in recent years, a catch-up to comparability rates would be so
large as to be unacceptable this year (13.5%). Moreover, there is
general agreement that the current system for determining comparability
rates has serious flaws that should be corrected. For this reason, the
Carter Administration proposed a comprehensive pay reform, which was not
accepted by Congress. The Reagan Administration will recommend that the
desirable features of the Carter compensation reform be enacted, and
that the legislation set the Federal compensation standard at 94 percent
of average non-Federal compensation (including benefits). This course
is justified because: (1) The comprehensive reform proposals are based
on a number of major studies of recent years and have been supported by
Presidents of both parties; and (2) the 94 percent is appropriate because
some aspects of Federal employment make it more attractive than
comparably-paid private sector jobs.
February 12, 1981
SUBJECT: Federal Civilian Employment - Non-Defense
Change proposed: The hiring freeze will be replaced by lower new
civilian personnel ceilings.
For non-Defense agencies, with a few exceptions (e.g., VA, State),
civilian employment will be reduced to the level that would have
been achieved had a total freeze on hiring remained in effect
throughout fiscal year 1981. For 1982 there will be a reduction
of about 72,000 from the Carter budget. For 1983 and each year
thereafter (through 1986), there will be additional reductions of
approximately 17,500 annually.
1981
1982
1983
1984
1985
1986
Number of Employees
(in thousands) :
Current Base
1,195
1,216
1,216
1,216
1,216
1,216
Potential Change.
-43
-72
-90
-108
-125
-143
Reagan Budget
1,152
1,144
1,126
1,108
1,091
1,073
Dollar Savings
$.3B
$1.9B
$2.6B
$2.8B
$3.1B
$3.4B
a/ - These savings include savings related to individual program
reductions or terminations considered elsewhere.
Subject: Annual Indexation of Civil Service Retirement Annuities
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Expected Savings:
Current services
BA
27,764 31,124 33,293 35,447 37,249 39,103
0
17,763 21,324 23,925 26,557 29,152 31,618
Policy reductions 1/
BA
0
510
430
400
380
390
0
0
510
430
400
380
390
Reagan level
BA
27,764 30,614 32,863 35,047 36,869 38,713
0
17,763 20,814 23,495 26,157 28,772 31,228
These estimates do not reflect the effect of the 80% cap. OPM
is in the process of costing that option.
Change Proposed:
The Civil Service Retirement law currently provides for two cost-
of-living adjustments each year; one in March and one in
September, based on increases in the Consumer Price Index (CPI).
The OMB recommendation would eliminate all September adjustments.
The current system of semi-annual adjustments is more liberal than
virtually all non-Federal pension plans. These semi-annual
adjustments are responsible in significant part for the unfunded
liability of the Retirement Fund and for the public's perception
that Federal retirement benefits are unjustifiably more liberal
than retirement benefits in the non-Federal sector. The change to
annual adjustments will put the Fund on a sounder financial basis
and would make cost-of-living adjustments under the Civil Service
Retirement System consistent with the annual adjustment granted
under Social Security. This is consistent with a similar proposal
being made for the military and other Federal retirement system.
2/12/81
Subject: Annual Indexation of Military Retired Pay
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Expected Savings:
Current Services
BA
13,869
15,748
17,395
18,899
20,324
21,705
Outlays
13,869
15,748
17,395
18,899
20,324
21,705
1/
Policy Reductions
BA
68
380
283
218
173
145
Outlays
68
380
283
218
173
145
Reagan Level
BA
13,801
15,368
17,112
18,681
20,151
21,560
Outlays
13,801
15,368
17,112
18,681
20,151
21,560
1/ These estimates do not reflect the effect of the 80% cap.
Change Proposed:
Currently, retired military personnel receive cost of living adjustments
semi-annually; one in March and one in September based on increases in the
Consumer Price Index (CPI). The policy reduction would eliminate all
September adjustments.
SUBJECT: Planning Assistance
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
34
37
39
42
44
46
Outlays
40
35
36
39
41
44
Policy Reduction
Budget Authority
-34
-37
-39
-42
-44
-46
Outlays
-3
-26
-36
-39
-41
-44
Reagan Budget
Budget Authority
0
0
0
0
0
0
Outlays
37
9
0
0
0
0
Change proposed:
This proposal would end the Planning Assistance program by
rescinding $34 million in 1981 and not requesting future funding.
This change is justified because (1) the primary intent of this
program--to develop local and State planning capabilities--has
been realized and (2) since the benefits of sub-national planning
accrue primarily and directly to sub-national entities, the
Federal Government should not have to pay for them.
February 9, 1981
SUBJECT: Urban Development Action Grants
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
675
734
787
836
882
926
Outlays
365
632
717
716
770
822
Policy Reduction
Budget Authority
-340
-734
-787
-836
-882
-926
Outlays
-7
-66
-345
-555
-770
-822
Reagan Budget
Budget Authority
335
0
0
0
0
0
Outlays
358
566
372
161
0
0
Change proposed:
This proposal would end the Urban Development Action Grant (UDAG)
program by rescinding $340 million in 1981 and not requesting
future funding. This change is justified because (1) there is no
evidence demonstrating that the UDAG program creates new
investment or jobs on a national level and (2) funds from the
Community Development Block Grant program can be used for the same
projects as UDAG funds.
February 12, 1981
SUBJECT: Community Development Block Grants (CDBG)
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
3695
4016
4309
4576
4828
5070
Outlays
3838
3993
3816
4116
4401
4663
Policy Reduction
Budget Authority
---
+94
+51
-16
-118
-210
Outlays
----
+2
+37
+69
+25
-54
Reagan Budget
Budget Authority
3695
4110
4360
4560
4710
4860
Outlays
3838
3995
3853
4185
4426
4609
Change Proposed:
This proposal would:
increase 1982 funding by $150 million from that proposed by
President Carter ($3,960 million to $4,110 million) so as to
promote commercial economic development projects in highly
distressed areas;
propose changes to the basic law so as to increase local
flexibility in project selection and use of funds and to ensure
that CDBG funds can be used for the same purposes as funds from
categorical programs being eliminated; and
seek a legislative change so that discretionary grant funds are
distributed to States for their allocation to small towns and
communities in their jurisdictions.
These program changes are consistent with the Reagan
Administration's commitment to providing adequate and flexible
support for the needs of our Nation's cities and towns.
SUBJECT: Rehabilitation Loan Funds
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
130
130
134
138
140
142
Outlays
133
134
136
138
140
142
Policy Reduction
Budget Authority
-130
-130
-134
-138
-140
-142
Outlays
-63
-191
-210
-211
-213
-214
Reagan Budget
Budget Authority
0
0
0
0
0
0
Outlays
70
-57
-74
-73
-73
-72
Change proposed:
This proposal would end the Rehabilitation Loan Fund by rescinding
$130 million in 1981 and not requesting future funding. This
change is justified because the Rehabilitation Loan Fund basically
duplicates the Community Development Block Grant program which
annually commits over $1 billion to various types of
rehabilitation.
February 9, 1981
SUBJECT: Neighborhood Self-Help Development
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget Authority
9
10
10
11
12
12
Outlays
15
9
10
11
11
12
Policy Reduction
Budget Authority
-8
-10
-10
-11
-12
-12
Outlays
-4
-9
-10
-11
-11
-12
Reagan Budget
Budget Authority
1
0
0
0
0
0
Outlays
11
*
0
0
0
0
* Less than $500,000.
Change proposed:
This proposal would end the Neighborhood Self-Help Development
program by rescinding $8 million in 1981 and by not requesting
future funding. This change is justified because the program
largely duplicates the efforts of the Neighborhood Reinvestment
Corporation and the Community Development Block Grant program.
February 9, 1980
SUBJECT: Public Housing Modernization
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base
Budget authority
2,000
2,000
2,000
2,000
2,000
2,000
Outlays 1/
---
50
150
250
Policy reduction
Budget authority
---
-800
-800
-800
-800
-800
Outlays 1/
---
---
---
-20
-60
-100
Reagan Budget
Budget authority
2,000
1,200
1,200
1,200
1,200
1,200
Outlays 1/
---
---
30
90
150
1/ Outlays shown are from budget authority for 1982 and subsequent
years only.
Change proposed:
This program of repairs and renovation of public housing projects would
be slowed down. Current funding is probably in excess of the level which
local housing authorities can effectively use. The goals of the
comprehensive modernization effort recently authorized by
Congress--assuring that public housing meets minimum safety and
sanitation standards and is more energy efficient and less costly to
operate--would still be met by 1986.
February 9, 1981
Department of Housing and Urban Development
SUBJECT: HUD Subsidized Housing Programs Tenant Rent Burden
Expected Savings:
(in millions of dollars)
1981
1982
1983
1984
1985
1986
Current Base 1/
Budget Authority
30,973
33,987
36,862
39,760
41,742
42,901
Outlays
6,571
8,177
9,769
11,645
13,599
15,515
Policy Reduction 2/
Budget Authority
--400
-4,007
-3,607
-4,540
-4,983
-5,122
Outlays
+38
-171
-529
-965
-1,609
-2,221
Reagan Budget 1/
Budget Authority
30,573
29,980
33,255
35,220
36,759
38,779
Outlays
6,609
8,006
9,240
10,680
11,990
13,294
1/ Combined totals for subsidized and public housing operating
subsidy programs.
2/ Reflects not only the impact of rent increases, but also the
net effect of rescissions and supplementals in 1981 and 1982.
Change proposed:
An increase in the rent contribution required from tenants living
in HUD subsidized housing will be phased-in over the next five
years. The gradual increases from the current 25 percent of
income to 30 percent of income will make the rent contribution for
subsidized tenants more consistent with rents paid by unsubsidized
lower income tenants. In addition, it will reduce some of the
inequity of providing very deep subsidies to a limited number of
eligible households. It is estimated that the increased rent
payment for subsidized tenants in FY 1982 will average less than
$5 per month. A change in the authorizing legislation will be
required.