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FY 1977 - 11/26/75 - FEA, ERDA, Justice, Civil Service, Regulatory Agencies (2)
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FY 1977 - 11/26/75 - FEA, ERDA, Justice, Civil Service, Regulatory Agencies (2)
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Budget Review Decision Papers
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Federal Energy Administration. (6/27/1974 - 10/1/1977)
Energy Research and Development Administration. 1/19/1975-10/1/1977
U.S. Civil Service Commission. 1883-1/1/1979
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The original documents are located in Box 10, folder "FY 1977 - 11/26/75, FEA, ERDA,
Justice, Civil Service Regulatory Agencies (2)" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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
1977 Presidential Review
Department of Justice
Table of Contents
TAB A
Summary tabulation of the 1977 Budget,
amounts requested and recommended.
TAB B
Summary of the principal budget decisions
reflected in the OMB recommendation.
TAB C
Issue Papers
TAB D
The President's Crime Message
Issue
Effective of issue on outlays
(dollars in millions)
1977
1978
1. LEAA Grant Program Levels
-52
-94
2. Federal Prison Systems:
Construction Program
-17
-15
3. FBI Resources and State/
Local Assistance Programs
-12
- 12
4. INS: Redistribution of
Staff Resources
-6 -
-6
GLRALD FORD LIBRARY
TAB A
DEPARTMENT OF JUSTICE
1977 Budget
Summary Data
(in millions)
Employment, end-of-year
Budget
Full-time
Authority
Outlays
Permanent
Total
1975 actual
2,118
2,067
49,032
50,961
1976 February budget
2,113
2,221
50,762
52,358
enacted
2,125
2,234
XXX
XXX
agency request
2,125
2,250
51,583
53,202
OMB recommendation
2,085
2,246
51,552
53,171
OMB employment ceiling
XXX
XXX
50,762
52,358
TQ February budget
541
644
XXX
XXX
enacted
551
650
XXX
XXX
OMB recommendation
541
608
XXX
XXX
1977 planning target
2,196
2,309
XXX
XXX
agency request
2,428
2,400
54,004
56,595
OMB recommendation
2,015
2,174
51,588
53,155
1978 OMB estimate
2,015
2,120
51,588
53,155
GERALD
R.
FORD
LIBRARY
A-1
#
S
TAB B
1977 Budget
Department of Justice
Summary and Background Information
Agency Request
Justice's initial request for $2,428 million in budget authority was 10.6% above the mid-year OMB planning ceiling;
it provided for outlay increases averaging 14.2% for every on-going program except one, and called for 2,421 new
employees -- an increase of 4.6% over 1976. It is not apparent that the budget reflected an assessment of relative
priorities.
Justice was given a revised outlay target of $2,180 million, $220 million less than Justice's initial request.
Justice subsequently identified possible outlay reductions of $40 million with departmentwide implications, and
an additional $180 million in programmatic reductions achieved by scaling-down program increases and reducing
base programs. The largest single reduction would impact heavily on LEAA: to obtain $68 million in outlay
savings in 1977, Justice would reduce LEAA's budget authority by $232 million or 29% below 1976.
While the suggested reductions reflect the priorites of departmental officials if the $2,180 million target must
be achieved, the Deputy Attorney General has stated that reductions of the magnitude contemplated would have a
"devasting effect on the law enforcement and other statutory responsibilities of the Department."
OMB Recommendation
The OMB recommendation would provide $2,015 million in budget authority, $2,174 million in outlays, and a full-time
employment level of 51,588 for 1977.
OMB's resource constraint strategy is designed to emphasize decentralization of litigation and court support systems,
maintain the current level of resources devoted to prison programs, tighten up on specific state and local assistance
programs of unproven value, and reduce current investigative and enforcement capabilities as little as possible.
The premise is that in recent years a significant portion of Justice's resources have been channeled into areas
that are not primarily Federal responsibilities. This is graphically portrayed at Page B-3.
The OMB recommendations include many of the departmentwide and programmatic reductions identified by Justice.
Significant issues include:
-- Reductions to LEAA grant programs.
LIBRARY GERALD ? FORD
B-1
-- Activation of four Bureau of Prisons correctional institutions where Justice suggested only two;
OMB allows no funds to begin construction of new prisons.
-- Reductions to the FBI's equipment base and workforce, and a change in policy to require 50% state
and local reimbursement for FBI training programs.
-- A net reduction in personnel for INS in 1977, and redistribution of resources within the Service.
Other components of the OMB recommendation, some of which differ from the Justice suggestions for outlay reductions,
include:
-- Reduction of Administratively Uncontrollable Overtime by 25% or $12.5 million, half the amount
suggested by Justice.
-- Expansion of the U.S. Attorneys (291 positions) and the U.S. Marshals (87 positions) and increased funds
for automated systems which contribute to managerial efficiency and aid litigative research. Contrary
to Justice's initial request for 162 new positions, only two would be added to the Office of the Solicitor
General and 10 to the Antitrust Division.
-- Drug Enforcement Administration would receive sufficient resources to address major recommendations
$3,5
included in the Domestic Council's White Paper on drug abuse; the allowance would require internal
management improvements to increase efficiency and personnel administration. DEA state/local task
forces would be funded at reduced levels but not eliminated as suggested by Justice.
FORD
Areas of Expected Disagreement with Justice
If, as we suspect, none of the Department's bureau heads have been consulted, reductions will come as an
unpleasant surprise.
-- FBI will doubtless try to appeal the $5 million cut in the Bureau's equipment base and reductions
to staff totaling 250 work-years.
-- INS will appeal reductions to investigative staff (267 work-years) and port-of-entry inspectors
(an increase of 99 was requested, a decrease of 133 is recommended), and may seek restitution of
$4.2 million for new Border Patrol equipment.
-- Bureau of Prisons will probably appeal $41 million for new construction and $6.5 million to rent state
and local detention facilities.
-- LEAA may appeal all reductions from the original budget request--a total of $217 million.
B-2
Figure 1: GROWTH IN DEPARTMENT OF JUSTICE BUDGET: 1969-1976
Dollars
2250
2000
1750
1500
STATE AND LOCAL ASSISTANCE
(DOLLARS IN MILLIONS)
1250
1000
750
INVESTIGATION AND ENFORCEMENT
500
250
LITIGATION AND COURT SUPPORT
CORRECTIONS
1969
1970
1971
1972
1973
1974
1975
1976
Figure 2: PROPORTIONATE DISTRIBUTION OF RESOURCES: 1969-1976
GREATS 4 FORD
Percent
100
90
80
STATE AND LOCAL ASSISTANCE
70
60
(PERCENT)
50
40
INVESTIGATION AND ENFORCEMENT
30
20
LITIGATION AND COURT SUPPORT
10
CORRECTIONS
*
1969
1970
1971
1972
1973
1974
1975
1976
OTHER*
B-3
1977 Budget
Department of Justice
Summary of Recommended Program Reductions
($ in millions)
1976
TQ
1977
1978
FTP
FTP
FTP
0
Employ.
0
BA
0
Employ.
0
Employ.
Current base
2,228
51,583
600
2,081
2,195
51,552
2,195
51,552
Recommended level
2,246
51,552
608
2,015
2,174
51,588
2,120
51,588
Reduction
+18
-31
+8
-66
-21
+36
-75
+36
Program reductions:
LEAA:
Juvenile Justice Delinquency
Prevention, rescind 1976
-4
-31
-1
-23
-31
-12
-31
LEAA:
Other grants
-90
-57
-64
Federal Bureau of Investigation
-16
-11
-250
-11
-250
Immigration and Naturalization
Service
-89
- 111
Drug Enforcement Administration
-77
-77
Other Miscellaneous
-1
-1
-20
GERALD
B-4
0 TAB
Department of Justice
1977 Budget
Law Enforcement Assistance Administration
Agency Suggestions
1976
1977
to achieve
1977 OMB Recom.
1975
Current
Agency
planning target
Prog.
Act.
Est.
Request
Reduction
Total
Base
Changes
Recom.
Budget Authority ($M)
887
770
897
-232
665
579
+101
680 700
Outlays
852
916
886
-68
818
814
+20
834
Work-years
810
845
916
0
916
845
+11
856
Issue: What is the appropriate level of funding for the Law Enforcement Assistance Administration's programs
for 1977?
Background
The Law Enforcement Assistance Administration (LEAA) provides a wide variety of grants and other forms of assistance
to state and local governments to improve their law enforcement abilities. These programs were initiated in 1969
(under the authorities of the Omnibus Crime Control and Safe Streets Act of 1968) and have grown quite dramatically
since that time (Chart A portrays the growth in LEAA programs since 1969).
Your Crime Message of June 1975, provided for reauthorization of LEAA programs during the period 1977 to 1981 at
$1.3 billion annually (authorization level); called attention to the fact that LEAA has served as a center for the
development of new ideas on how to fight crime; called for a "High Impact" program--specifically targeted at reducing
crime in heavily populated urban areas; and called for special program emphasis on state and local court reform.
Alternative #1
Allow the Department's request for $897 million, which is an increase of 11% over their 1976 program of $809 million
(the 1976 request included $40 million added by the Congress for new juvenile delinquency programs). No
prioritization is evident in the Department's initial 1977 request.
GERALD R. FORD
C-1
Alternative #2
Accept the Department's suggestions for meeting the planning ceiling by providing budget authority of $665 million,
which s a 26% decrease from their original request. Their suggested reductions eliminate completely new juvenile
delinquency programs and the Law Enforcement Education Program, sharply reduce most grant programs--but preserve
the special "High Impact" crime program. Their suggested reductions would provide $665 million for LEAA programs
in 1977. In proposing these sharp reductions, the Department concludes that reductions in LEAA programs--combined
with a thorough evaluation of their impact on crime reduction--are preferrable at this time to sharp reductions
in their Federal law enforcement operations.
Alternative #3
Accept the OMB recommendation of $680 million, which is $15 million greater than the Department's revised proposal.
OMB agrees with the Department that reductions in LEAA programs are in order until more is known about their
contribution to crime reduction at the state and local levels of government.
Discussion
In reviewing the 1977 request, OMB attempted to calculate a "base" requirement for LEAA programs--that amount
required to continue on-going program and management capabilities and to honor multi-year grant commitments made
in prior years. OMB calculates base requirements as approximately $580 million for 1977. Therefore, the OMB
recommendation of $680 million for 1977 covers base requirements and provides $100 million for new grant activity.
The programmatic impact of these recommendations are portrayed on Chart B and described further below.
Planning Grants - This program provides grants to state planning agencies to oversee and evaluate
the utilization of LEAA funds. The OMB recommendation agrees with the Department's revised proposal
to continue these programs at the 1977 base level ($60 million) to reflect continued support for
planning and evaluation at the state and local levels.
Matching Grants - This program provides a variety of block, categorical, and discretionary grants to
state and local governments to improve their criminal justice systems. The Department initially
requested $634 million for these programs in 1977, a 11% increase over 1976. In order to meet the
revised planning target, the Department suggested reductions of $112 million below their original
request for these programs. The OMB recommendation agrees with the Department's revised proposal
of $522 million. This recommendation provides approximately $100 million over the 1977 base for
new grant activity. The "High Impact" crime program and the "Career Criminal" program are included
in this program category.
GERALD
R.FORD
FORD
C-2
LIBRARY
Technical Assistance, Research and Evaluation, and Data Systems and Statistics - These programs are
designed to enhance the capabilities of LEAA and state and local governments to plan and evaluate the
effectiveness of crime reduction programs. The Department originally requested $81 million for these
programs in 1977, a 16% increase over 1976. To meet the revised planning target, they suggested
reductions of $23 million from their initial request for a revised level of $58 million. The OMB
recommendation provides $65 million, $7 million greater than the Department's revised proposal.
The OMB recommendation provides $12 million above base requirements for these programs because
of their importance in assessing the effectiveness of LEAA programs.
Educational Assistance - This program provides manpower development assistance to state and local
criminal justice systems. The largest of these programs is the Law Enforcement Education Program (LEEP)
which finances college studies for criminal justice personnel and promising students. The Department
originally requested $40 M for LEEP in 1977, but suggested its total elimination as a means of meeting
the revised planning target. OMB believes that LEEP has failed to demonstrate any impact on the crime
problem, and agrees with the Department's suggestion to terminate the program. OMB recommends, however,
$5 million in 1977 to honor existing educational committments to full-time students currently engaged
in a multi-year program of study.
Juvenile Justice and Delinquency Prevention - This program funds the new juvenile delinquency programs
authorized by the Juvenile Justice and Delinquency Prevention Act of 1974 (P.L. 93-415). The signing
statement for this Act indicated strong support for the Act's improved policy direction and coordination
of Juvenile Justice and Delinquency programs but opposition to appropriation of new funds. It has been
the Administration policy that adequate funds exist in LEAA for Juvenile Justice and Delinquency programs
Nevertheless, Congress appropriated $25 million in a late 1975 supplemental for Juvenile Justice and
Delinquency activities, and recently added another $40 million to the 1976 Justice appropriation bill.
OMB is currently seeking rescission of the $40 million. The Department initially requested $40 million
for these programs in 1977 but suggested total elimination of the program as a means of meeting the
revised planning target. OMB recommends eliminating separate funding for Juvenile Justice and Delinquenc
programs, based on the continuing belief that these activities should be funded out of existing discretio
funds. OMB also believes massive expenditures without supporting research and evaluation efforts should
be avoided. The 1977 recommendation enables LEAA to determine the most effective approaches to solving
the juvenile delinquency problem.
In summary, the OMB recommendation of $680 million includes sufficient funds to carry on projects initiated in
prior years plus 100 million for new grant activity. It provides for minimal disruption of on-going state and
local programs consistent with tight budgetary constraints. This approach also stresses the need for continuing
evaluation of past experience.
ADDRESS
C-3
GROWTH IN LEAA DEPARTMENT OF JUSTICE BUDGET: 1969-1977
CHART A
800
700
600
MATCHING
500
GRANTS
(Dollars in Millions)
400
GERALD
DISCRETIONARY
300
PART-E (CORRECTIONS)
200
HIGH CRIME
PLANNING
100
EDUCATION ASSISTANCE
JJDP
RESEARCH AND EVALUATION
STATISTICS
TECHNICAL ASSISTANCE
MANAGEMENT
0
1969
'70
'71
'72
'73
'74
'75
'76
'77
C-4
LAW ENFORCEMENT ASSISTANCE ADMINISTRATION
COMPARISON OF INITIAL REQUEST, SUGGESTED REDUCTION AND
OMB RECOMMENDATION
CHART B
600
500
400
LEGEND:
70
JUSTICE REQUEST TOTAL (897M)
JUSTICE REVISED TOTAL (665M)
OMB RECOMMENDATION (680M)
1977 BASE (578M)
MILLIONS OF DOLLARS
60
50
GERALD FORD
40
30
20
10
0
PLANNING MATCHING TECHNICAL RESCH. EDUCATIONAL DATA
JUVENILE
MGMT.
&
GRANTS GRANTS ASSIST.
&
ASSIST. SYSTEMS JUSTICES OPERATIONS
EVALUATION
&
STATISTICS
C-5
Department of Justice
1977 Budget
Federal Prison System
Agency Suggestions
1976
1977
to achieve
1977 OMB Recom.
1975
OMB
Agency
planning target
Prog.
Actual
Recom.
Request
Reduction
Total
Base
Changes
Recom.
Budget Authority ($M)
222.3
230.6
312.5
-52.1
260.4
227.4
20.9
248.3
Outlays
226.4
261.4
291.8
-27.6
264.2
244.2
12.0
256.1
Work-years
7,191
8,738
9,361
-444
8,907
7,763
300
9,026
Statement of Issue
Should funds be recommended for the construction of four new institutions in 1977?
Background
Current prison population statistics indicate that 24 of the 53 institutions in the Federal Prison System are
overcrowded. In addition, some facilities are inadequate for further use. The Department requests funds to
construct new institutions and to activate institutions coming on-line in 1977 in order to relieve present
overcrowding. In the 1976 budget, $23 million in budget authority was requested for construction of two new
institutions.
Congress denied this request in action on the 1976 Justice appropriation bill.
Alternative #1
The initial Justice request provided $42 million in budget authority and $37 million in outlays to go forward
with planning and construction of four new institutions which would accommodate 850 additional prisoners in
1979, and 700 additional prisoners in 1980 or 1981. In addition, the initial request included funds to
activate four institutions coming on-line during 1977 which will accommodate 800 additional prisoners.
GERALD
C-6
Alternative #2
Accept the OMB recommendation of a moratorium on new prison construction for one year. At the same time, provide
additional funds and personnel for:
-- Activation of four institutions coming on-line in 1977 accommodating 800 additional prisoners.
($6 million in budget authority, $5.6 million in outlays)
-- Rehabilitation of utilities systems and renovation of existing structures. ($8 million in budget
authority, $1.5 million in outlays)
-- Research and evaluation in corrections. ($5 million in budget authority, $4 million in outlays).
The proposed new facilities requested by the Department are--in priority order:
1) Detroit Metropolitan Correctional Center: this institution is needed to alleviate a situation
in which prisoners are transported 40 miles for detention. (1977 budget authority $2.8 million,
1977 outlays $1.7 million)
2) Southeast Youth Facility (Talledega, Alabama): this project is designed to house juvenile offenders,
and is one of three planned in the Southeast. Opening this facility would allow prisoners to be
moved out of the Atlanta Penitentiary, which is inadequate. (1977 budget authority $18.6 million,
1977 outlays $6 million)
3) West Coast Youth Facility (Camarillo, California): this project is one of three institutions designed
to house juvenile offenders in California. This facility would accommodate 350 prisoners and allow
prisoners to be transferred from the McNeil Island institution, which is inadequate for further use.
(1977 budget authority $17.5 million, 1977 outlays $7.3 million)
4) Phoenix Metropolitan Correctional Center: this institution is needed to provide space for detention
in the Phoenix area. (1977 budget authoirty $2.7 million, 1977 outlays $1.6 million)
is FORD GENALD LIBRARYS
C-7
Issue Paper
Department of Justice
1977 Budget
Federal Bureau of Investigation
Agency Suggestions
1976
1977
to achieve
1977 OMB Recom.
1975
Current
Agency
planning target
Program
Actual
Est.
Request
Reduction
Total
Base
Change
Recom
Budget Authority ($M)
449.5
468.7
503.8
-55.6
448.2
464.2
-17.1
447.1
Outlays ($M)
438.5
456.7
502.7
-54.3
448.4
457.6
-17.1
440.5
Work-years
19,462
19,798
20,423
-610
19,813
19,798
-250
19,548
Statement of Issue
What is the appropriate funding level for the FBI in 1977?
Background
The FBI is the largest law enforcement agency in the Federal Government employing 8,574 special agents and
11,059 clerks. As the principal investigative arm of the Justice Department, the FBI is involved in the
following activities:
-- general and civil investigation
-- national and internal security
-- state and local assistance
GERALD
Alternatives
#1 Agency Request: Provide $35.1 million increase and 610 work-years above 1976.
#2 Agency Revised Submission: Reduce 1976 appropriated level by $20.5 million.
LISARY
#3 OMB Recommendation: Reduce 1976 appropriated level by $21.6 million and 250 work-years.
C-8
Discussion
Agency Request (Alternative #1)
Justice original 1977 budget request for the FBI proposes an increase of $35.1 million in budget authority
and outlays, and 610 work-years above the appropriated level for 1976. The increase would
permit the FBI to pre-fill 1,035 agent-positions subject to mandatory retirement, back-fill 202 positions
which were reprogrammed from low priority programs to respond to Freedom of Information/Privacy Act
requirements, and purchase new and replacement equipment.
Revised submission (Alternative #2)
When asked to submit a revised budget reflecting restraint in Federal spending, Justice suggested a $54.3 million
outlay reduction from the initial request which:
-- eliminated all 1977 program increases ($22.8 million);
-- reduced administrative uncontrollable overtime (AUO) by 50% ($15.5 million);
-- imposed a 50% reimbursement requirement on state and local governments for law enforcement
training and scientific laboratory services ($10.5 million); and
-- reestimated space rental and selected base increases ($5.5 million).
OMB Recommendation (Alternative #3)
In contrast, the OMB approach to reaching the revised planning target represents a reduction of 250 work-years
and $17.1 million in budget authority and outlays below the 1977 base, as calculated by OMB. Reductions from
the 1976 appropriated level would be achieved by:
-- reducing Administrative Uncontrollable Overtime by only 25% ($7.7 million);
-- deferring selected equipment purchases for one year ($5 million);
-- requiring 50% reimbursement for law enforcement training but maintaining the current level of
scientific laboratory services ($7.7 million);
-- assuming a 1% productivity increase over 1975 thereby reducing the workforce by 250 work-years
($4.5 million).
C-9
The OMB recommendation reduces outlays $7.9 million below the Justice Department's revised proposal
(Alternative #2).
The mort significant issues in the OMB recommendation are:
Requiring 50% reimbursement from states and localities for Training
The FBI extends training to members of state and local law enforcement agencies in both the field and at the FBI
Academy in Quantico, Virginia. In the field, the training is concentrated in areas such as firearms, defensive tactics,
legal matters and investigative techniques.
At the FBI Academy, the FBI conducts a comprehensive 12-week course designed to enhance the educational level of the
attendees to better equip them to cope with problems encountered by law enforcement personnel. Students are required
to take college level courses in Forensic Science, Education and Communication Arts, Management Science, Behavorial
Science and Law. The Academy is accredited by the University of Virginia and students can earn up to 15 graduate
credits upon successful completion of the course. The FBI assumes full cost of travel, tuition, books, equipment,
and provide meals, lodging, drycleaning and laundry services at Federal expense.
The OMB recommendation agrees with the Department's proposal to require 50% reimbursement from state and local
governments for training. The beneficiaries would share in the cost of training and the financial burden would
be spread among the several states and not heavily impact any one state or locality. The current level of training
would still be available and less costly than comparable training provided at many colleges and universities.
Some states and localities might opt to send students to state-owned and operated law enforcement training
facilities which we would encourage. OMB believes that in the short term, 50% reimbursable is probably the
most feasible avenue to proceed. However, in the long term, we are recommending that an evaluation be conducted
to determine if 50% is the appropriate level or if we should be moving toward 100% reimbursement.
Requiring 1% increase in productivity over 1975 in the investigative area
As the attached graph (see page C-13) depicts, the FBI's investigative workload has decreased by approximately 22%
from 1969 to 1975 (using actual year data) while the agent workforce has increased by almost 25% during the same
time period. The downward shift is partially explained by decreases in matters relating to civil rights and student
unrest (which were major issues during the middle and late 60s), fewer hijackings and selective service violations
(resulting primarily from the end of the Vietnam campaign and the draft), and a conscious departmental determination
to defer certain cases (such as stolen cars and theft from interstate shipment) to states for investigation. The
FBI has begun prioritizing investigations and a marked shift toward organized and white collar crime has been
observed. By their very nature, these cases are more complex to investigate and require more work-hours.
GERALS FORD
C-10
The OMB recommendation to reduce employment by 250 work-years takes into account the complexity argument and
the new policy of prioritizing cases but it continues to build-in productivity assumptions (see table 1) which
we believe represents a sound programmatic approach to improve the performance of an investigative and law
enforcement agency. Also, our recommendation takes into account the FBI's traditional high estimate of workload
when compared with actual data (as the graph on page C-13 depicts). The net impact of our recommendation would
increase productivity 1% over 1975, and hopefully encourage the FBI to develop better workload indicators
on which to base budget decisions.
is FORD 078839 LIBRARY
C-11
TAL
Workload vs. Agent Workforce
Investigative
Special
Matters per
Matters
Agents
Agent
1969
859,666
6,832
126
1970
882,254
7,297
121
1971
828,059
7,878
105
1972
824,252
8,486
97
1973
774,579
8,572
90
1974
745,840
8,564
87
1975
673,957
8,404
80
1976 Est.
676,000
8,574
79
1977 (Agency Request)
683,000
9,007
76
1977 (OMB Recom.)
683,000
8,374
81
The OMB recommendation results in a total
employment reduction of 250 work-years
(i.e., 200 agents and 50 clerks) and
$4.5 million below 1976 appropriated
level.
Luvasin GERALD ? FORD
C-12
FBI PRODUCTIVITY DATA
1100
SINCE 1971, THE FBI HAS OVER ESTIMATED
WORKLOAD BY AN AVERAGE OF 21%.
1000
INVESTIGATIVE MATTERS Thousands )
ESTIMATED WORKLOAD
900
800
ACTUAL WORKLOAD
700
130
AGENCY REQUESTS 76 INVESTIGATIVE MATTERS PER AGENT.
OMB RECOMMENDS 81 INVESTIGATIVE MATTERS PER AGENT.
INVESTIGATIVE MATTERS PER AGENT
110
OMB
RECOMMENDATION
90
70
AGENCY REQUEST
1969
'70
'71
'72
'73
'74
'75
'76
'77
FISCAL YEAR
C-13
FORM LIBRARY :-
Department of Justice
1977 Budget
Immigration and Naturalization Service
Agency Suggestions
1976
1977 Agency Request
to achieve
1977 OMB Recom.
1975
Current
Prog.
planning target
Prog.
Act.
Est.
Base
Changes
Total
Reduction
Total
Base
Changes
Recom.
Budget Authority ($M)
181.3
208.0
213.5
29.9
243.4
-30.9
212.6
204.4
9.5
213.9
Outlays
178.8
207.1
213.5
29.8
243.3
-29.5
213.8
205.6
9.5
215.1
Employment (work-years)
8,012
8,583
8,825
365
9,190
-630
8,560
8,583
-29
8,554
Statement of Issue
Should base programs for investigating aliens' status and inspections for admission into the United States be
reduced to offset priority increases in detention and deportation programs?
Background
In order to accommodate and partially offset the costs of the following important program increases:
OMB Recommendation
Budget
Initial Request
Authority
Positions
Development of counterfeit-proof alien documentation
($1.55 million)
$1.55 M
---
Expansion and operation of detention facilities
($7.9 million, 176 positions)
$4.0 M
176
Increased deportation capabilities
($9.7 million, 98 positions)
LIVERSE GERALD FORD
$6.6 M
98
C-14
OMB Recommendation
Budget
Initial Request
Authority
Positions
E1 Paso (Drug) Intelligence Center
($104 thousand, 5 positions)
$71 thousand
5
Increase Policy Planning and Evaluation staff
($152 thousand, 10 positions)
$95 thousand
10
Augment Border Patrol operations with new equipment
and construction of border stations ($5 million)
OMB recommends three major reductions to the INS program base:
Budget
Authority
Positions
25% reduction of Administratively Uncontrollable Overtime
-$2.1 M
NA
9% reduction in port-of-entry inspections staff
-$2.0 M
-133
20% reduction in investigative staff
-$4.0 M
-267
Discussion
INS did not request additional funds for investigative personnel, but did intend to continue investigation
programs at 1976 levels. Justice leadership suggests the investigations staff is too large, especially in
view of the Service's limited detention facilities and deportation capabilities, and that the mix of staff
resources should be changed. There is little credibility in an enforcement system which catches violators
but can do nothing with them. OMB agrees, and recommends reducing the current investigative staff of 1,304
by 267 positions. Border protection would continue at present levels, though fewer illegal aliens in interior
cities will be pursued. However, a much larger proportion of those who are caught will be effectively expelled
or deported, thus improving the deterrent effort of INS activities.
While we recommend approval of the new positions requested for detention and deportation, we do propose to
reduce the amount of the concomitant funding increase. This will constrain operations somewhat but will not
impair program effectiveness, and is in part attributable to the Administratively Uncontrollable Overtime
reduction.
C-15
Justice originally requested 99 new inspectors to serve at ports-of-entry, arguing increased workload over the
past several years and an anticipated influx of visitors during the Bicentennial. The Department now suggests,
though very reluctantly, that the increase is not high priority and the existing inspections staff could be
reduced by 133 positions (9%). Having reviewed relevant workload statistics OMB recommends the reduction of
133 positions. We are confident that INS will appeal this base program reduction.
OMB recommends no new funds for equipment or for Border Patrol facilities other than the E1 Paso Intelligence
Center. We are convinced that under present circumstances the Border Patrol's ability to reduce the flow of
aliens across the border is virtually nil. We cannot recommend additional resources for these purposes until
fundamental changes make it unprofitable to enter the United States in search of work.
Adoption of the OMB recommendation would decrease INS staff by 111 full-time permanent positions but maintain
outlays at the 1976 level. Last year you responded favorably to an INS appeal and granted 430 positions above
the initial allowance, for a total staff increase of 750 in 1976.
Alternative #1
Approve priority increases listed above but disapprove offsets to base programs. (Original Justice request,
slightly reduced)
Alternative #2
Approve priority increases listed above with offsetting reductions to base programs. (OMB recommendation)
BERALD
9.
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C-16
6
TAB D
EMBARGOED FOR RELEASE UNTIL 6:00 P.M., EDT
THURSDAY, JUNE 19, 1975
Office of the White House Press Secretary
THE WHITE HOUSE
FACT SHEET
CRIME MESSAGE
The President is today transmitting to the Congress a special
message on crime in which he advocates enactment of mandatory
minimum sentences for offenders who commit violent Federal crimes.
In addition, he asks the Congress to improve Federal fire arms
laws and their enforcement. The President also recommends the
extension of the Law Enforcement Assistance Administration through
1981.
BACKGROUND
The Federal Bureau of Investigation has estimated that the rate
of serious crime was 17 percent higher in 1974 than in 1973. This
is the largest annual increase in the 44 years the Bureau has been
collecting statistics. Moreover, these figures reflect only the
reported crimes. A study of unseported crime sponsored by the
Law Enforcement Assistance Administration indicates. that the actual
level of crime in some cities is three to five times greater than
that reported. Significantly, and tragically, the number of crimes
involving threats of violence or actual violence has also increased.
Two months ago, at the celebration of the 150th anniversary of
the Yale Law School, the President delivered a speech on the
problem of crime in America. In that address, the President
stressed his concern for the innocent victims of crime and the
impact which crime -- particularly violent crime -- has had on
domestic tranquility in America. The message which the President
is sending to Congress today spells out his program for combatting
crime.
HIGHLIGHTS OF MESSAGE
While acknowledging that the Federal role in the fight against
crime is a limited one, the President sets forth three important
responsibilities of the Federal government in this vital area:
i
Providing leadership to State and local governments
if
FOND
by improving the quality of Federal laws and the
criminal justice system.
Enacting and vigorously enforcing laws covering
GERALD
criminal conduct that cannot be adequately regulated
LIBRARY
at the State or local level.
-
Providing financial and technical assistance to State
and local governments and law enforcement agencies,
and thereby enhancing their ability to enforce the
law.
I.
PROVIDING FEDERAL LEADERSHIP
A. Improving the Quality of Federal Laws
Noting that Federal criminal laws should be a model
upon which State and local governments can pattern
more
(OVER)
2
their own laws, the President recommends to the
Congress the enactment of a comprehensive criminal
code.
In codifying the Federal criminal law, the President
recommends that criminal fines be increased from a
maximum of $10,000 to a maximum of $100,000 if the
defendant is an individual, and $500,000 if the de--
fendant is an organization.
The President also recommends the enactment of
mandatory minimum sentences for persons who:
(1) commit Federal offenses involving the use of a
dangerous weapon,
(2) commit such extraordinarily serious offenses as
aircraft hijacking, kidnapping and trafficking
in hard drugs, and
(3) are repeat offenders who commit Federal crimes that
cause or have the potential to cause personal injury
to others. Limited exceptions to the imposition
of mandatory minimum sentences would be set forth
in the statute.
The President recommends that Federal appeals courts
be given limited authority to review sentences imposed
by Federal trial court judges.
B. Improving the Federal Criminal Justice System
In addition to reform of the criminal law, the President
believes that we must improve the manner in which our
criminal justice system operates. In the message, he
makes numerous suggestions and recommendations designed
to improve the quality of the Federal criminal justice
system. These include:
1. Establishment of "career criminal programs
designed to assure quick identification and
prosecution of persons who repeatedly commit
serious offenses.
2. Continuation and expansion of programs designed
to divert certain first offenders into rehabili-
tation prior to trial.
3. Creation by the Congress of additional Federal
District Court judgeships and expansion of the
criminal jurisdiction of United States Magistrates.
4. Up--grading of prison facilities, including the
replacement of large, outdated prisons with
smaller, more modern ones.
5. Directing that the Attorney General, as Chairman
of the Cabinet Committee on Crime Prevention and
Rehabilitation, ensure that the Federal govern
ment is making the best possible use of its re...
sources in the area of offender rehabilitation.
6. Enactment by the Congress of legislation to
provide limited compensation to victims of
Federal crimes who suffer personal injury.
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3
Additionally, the President calls upon employers,
including Federal agencies, to keep open minds on
the hiring of persons formerly convicted of crimes.
II. BETTER LAWS AND ENFORCEMENT
A. The President is unalterably opposed to Federal regis-
tration of guns or gun owners. He has directed the
Attorney General to prepare legislation prohibiting the
manufacture, assembly or sale of "Saturday Night Specials
The President also proposes to strengthen current law so
as to strike at the illegal commerce in handguns and to
emphasize the responsibility of dealers to adhere to the
law. He has also ordered the Treasury Department's
Bureau of Alcohol, Tobacco and Firearms to double its
investigative efforts in the nation's ten largest metro-
politan areas and to immediately employ and train an
additional 500 firearms investigators for this priority
effort.
B. The President believes there are several other areas
in which Federal law and enforcement can be improved to
strike at those who have made crime a business. Laws
relating to organized crime, consumer fraud, white-
collar crimes and protection of civil rights can and
should be improved.
C. The President also has directed the Domestic Council to
conduct a comprehensive, priority review of the Federal
effort in the treatment and prevention of drug abuse,
to ensure that Federal programs and policies are appro-
priate to meet the current and mounting threat.
III. PROVIDING FINANCIAL AND TECHNICAL ASSISTANCE
The Federal government must continue to help State and local
governments in carrying out their law enforcement respon-
sibilities. Therefore, the President will submit to the
Congress a bill that will continue the Law Enforcement Assis-
tance Administration through 1981.
The Bill will authorize $6.8 billion for the Law Enforcement
Assistance Administration to continue its work through 1981.
Further, the bill will increase LEAA's annual funding authori-
zation of $1.25 billion to $1.3 billion so that additional
funds may be made available to urban areas with high crime
rates. Finally, the bill will place additional emphasis on
improving State and local court systems.
# # # #
EMBARGOED FOR RELEASE UNTIL 6:00 P.M. EDT
June 19, 1975
THURSDAY, JUNE 19, 1975
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
I address this message to the Congress on a subject
that touches the lives of all Americans: crite.
Two months ago, at the celebration of the 150th anniversary
of the Yale Law School, I spoke about law and respect for the
spirit of the law.
Law makes human society possible. It pledges safety to
every member so that the company of fellow human beings can be
a blessing instead of a threat. It is the instrument through
which we seek to fulfill the promise of our Constitution: to
insure domestic tranquility.
But America has been far from successful in dealing with
the sort of crime that obsesses Americ day and night -- I mean
street crime, crime that invades our neighborhoods and our
homes -- nurders, robberies, rapes, usggings, hold-ups, breakins --
the kind of brutal violence that rakes us fearful of strangers
and afraid to go out at night.
I sense, and I think the American people sense, that we
are facing a basic and very serious problem of disregard for
the law. Because of crime in our streets and in our hores, we
do not have domestic tranquility.
Ever since the first Presidential message on criwe, in
1965, strenuous Federal efforts, as well as State and local
initiatives, have been undertaken to reduce the incidence of
crime in the United States. Yet, throughout this period, crime
has continued to increase. Indeed, the Federal Cureau of
Investigation's latest estimates are that the rate of serious
crime -- murder, forcible rape, robbery, aggravated assault,
burglary, larceny and auto theft -- was 17 percent higher in
1974 than in 1973. This is the largest increase in the 44 years
the Bureau has been collecting statistics.
Since 1960, although billions of dollars have been spent
on law enforcement programs, the crime rate has more than
doubled. Moreover, these figures reflect only the reported
crimes. A study of unreported crime sponsored by the Law
Enforcement Assistance Administration indicates that the actual
level of crime in some cities is three to five times greater
than that reported.
More significantly, the number of crimes involving threats
of violence or actual violence has increased. And the number
of violent crimes in which the perpetrator and the victim are
strangers has also increased. A recent study indicates that
approximately 65 percent of all violent crimes are committed
against strangers.
The personal and social toll that crime exacts from our
citizens is enormous. In addition to the direct damage to
victims of crime, violent crimes in our streets and in our
homes make fear pervasive.
more
(CVER)
In many areas of the country, especially in the most
crowded parts of the inner cities, fear has caused people to
rearrange their daily lives. They plan shopping and recreation
during hours when they think the possibilities of violent attacks
are lower. They avoid commercial areas and public transit.
Frightened shopowners arm themselves and view customers with
suspicion.
The individual, political and social costs of crime cannot
be ignored. They demand our attention and coordinated action.
With the firm support of the American people, all levels of
government -- Federal, State and local -- must commit themselves
to the goal of reducing crime.
For too long, law has centered its attention more on the
rights of the criminal defendant than on the victim of crime.
It is time for law to concern itself more with the rights of the
people it exists to protect.
In thinking about this problem, I do not seek vindictive
punishment of the criminal, but protection of the innocent
victim. The victims are my primary concern. That is why I
do not talk about law and order and why I turn to the
Constitutional guarantee of domestic tranquility. The emphasis
in our efforts must be providing protection for the victims of
crime.
In this message, I shall address myself to what I believe
the Federal government can and should do to reduce crime. The
fact 1s, however, that the Federal role in the fight against
crime, particularly violent crime, is a limited one.
With few exceptions, the kinds of crimes that obsess
America -- murders, robberies, rapes, muggings, hold-ups,
breakins -- are solely within the jurisdiction of State and
local governments. Thus, while the programs that I will propose
in this message will, if enacted, contribute to a safer America,
the level of crime will not be substantially reduced unless
State and local governments themselves enact strong measures.
I see three ways in which the Federal government can play
an important role in combating crime:
First, it can provide leadership to State and local govern-
ments by enacting a criminal code that can serve as a model for
other jurisdictions to follow and by improving the quality of
the Federal criminal justice system.
Second, it can enact and vigorously enforce laws covering
criminal conduct within the Federal jurisdiction that cannot
be adequately regulated at the State or local level.
Third, it can provide financial and technical assistance
to State and local governments and law enforcement agencies,
and thereby enhance their ability to enforce the law.
I.
Providing Leadership
FORD
Law Enforcement in a democratic society depends largely
upon public respect for the laws and voluntary compliance with
them. We do not have and do not want a police state. Respect
GERALD
LIBRARY
and compliance are undermined 1f individuals conclude that law
more
3
enforcement efforts are ineffective and that crires may be
corritted with impunity -- conclusions which are buttressed
by repidly rising cri e rates and by statistics showing only
one arrest for every five serious crimes committed.
& Cecline in respect for the law leads to the commission
of more crimes. The necessity to investigate these additional
crimes, prosecute those accused, and punish those convicted
places even greater strain on the already overburdened capacities
of police, prosecutors, public defenders, courts, nemal institu-
tions and correctional authorities. As a consequence, the
percentage of offenders apprehended, prosecuted and appropriately
sentenced is further reduced. This leads to an even greater
decline in respect for the law and to the commission of even
more crimes. To succeed in the effort to reduce crime, we
must break this spiral.
There are two direct ways to attack the spiral of crime.
One is through improvements in the law itself. The other is
through improvement of the criminal justice system so that it
functions more swiftly, surely and justly.
Federal criminal laws should be a model upon which State
and local governments can pattern their own laws. At the
present time, they are not. These Federal statutes developed
haphazardly over the decades. They have been revised here
and there in response to changing judicial interpretation.
They are complicated, and sometimes conflicting, leaving gaps
through which criminal activity too often slips unpunished.
Because of their complexity, the laws invite technical
arguments that waste court time without ever going to the
heart of the question of the accused's guilt or innocence.
For several years, the Federal government has engaged
in a massive effort to reform the Federal criminal laws into
a uniform, coherent code. The product of this effort was
recently introduced in Congress, with wide bipartisan support,
as S. 1, the Criminal Justice Reform Act of 1975.'
Since it covers every aspect of criminal law, some of the
proposals in this Act have stirred controversy and will un-
doubtedly precipitate further debate. For instance, concern
has been expressed that certain provisions of the bill designed
to protect classified information could adversely affect freedom
of the press. While we must make sure that national security
secrets are protected by law, we must also take care that the
law does not unreasonably restrict the free flow of information
necessary to our form of government. Responsible debate over
this and other provisions of S. 1 will be very useful. Issues
can be clarified and differing interests accommodated.
I think everyone will agree, however, that comprehensive
reform of the Federal criminal code is needed. Accordingly,
as a legislative priority in the Federal effort against crime,
I urge the 94th Congress to pass the kind of comprehensive
code reform embodied in the Criminal Justice Reform Act.
In connection with this overall effort, let me suggest
some specific reforms I believe essential.
The sentencing provisions of current Federal law are,
in my judgment, inadequate in several respects, often erratic
and inconsistent. Defendants who commit similar offenses may
receive widely varying sentences. This lack of uniformity is
profoundly unfair and breeds disrespect for the law.
more
4
The revision of the criminal code should restore a sense
of consistency in sentencing, so that the fine or term of imprison-
ment imposed by the law relates directly to the gravity of the
offense. For example, criminal fines are woefully inadequate
and provide little deterrence to offenders whose business is
crime -- a business profitable enough to support current
levels of criminal fines as an ordinary business. expense.
Other than under the antitrust laws, the maximum fine which
can be imposed on serious violators is usually $10,000. That
amount is too often not commensurate with the crime. The maximum
level should be increased to $100,000, if the defendant is an
individual, and $500,000, if the defendant is an organization.
The sentencing provisions of the proposed code should be
modified to provide judges with standards under which prison
sentences are to be imposed upon conviction. Imprisonment
too seldom follows conviction, even for serious offenses. It
is my firm belief that persons convicted of violent crime should
be sent to prison. Those who prey on others, especially by
violence, are very few in number. A small percentage of the
entire population accounts for a very large proportion of the
vicious crimes committed. Most serious crimes are committed
by repeaters. These relatively few persistent criminals who
cause so much worry and fear are the core of the problem. The
rest of the American people have a right to protection from
their violence.
Most of the victims of violent crimes are the poor, the
old, the young, the disadvantaged minorities, the people who
live in the most crowded parts of our cities, the most defense.
less. These victims have a valid claim on the rest of society
for protection and personal safety that they cannot provide
for themselves; in a phrase, for domestic tranquility.
Imprisonment too seldom follows conviction for a felony.
In the 1960's, crime rates went higher, but the number of criminals
in prison, state and federal, actually went down. A study of one
major jurisdiction showed that of all convicted robbers with a
major prison record, only 27% were sent to prison after conviction.
There should be no doubt in the minds of those who commit
violent crimes -- especially crimes involving harm to others --
that they will be sent to prison if convicted under legal processes
that are fair, prompt and certain.
I propose that incarceration be made mandatory
for (1) offenders who commit offenses under Federal
jurisdiction using a dangerous weapon: (2) persons com-
mitting such extraordinarily serious crimes as aircraft
jacking, kidnapping, and trafficking in hard drugs: and
(3) repeat offenders who commit Federal crimes -- with or
without a weapon -- that cause or have a potential to cause
personal injury. Exceptions to mandatory imprisonment should
apply only if the judge finds and specifies in writing one or
more of the following: that the defendant was under 18 when
the offense was committed, or was mentally impaired, or was
acting under substantial duress, or was implicated in a
crime actually committed by others and participated in the
FORD
crime only in a very minor way. I have asked the Attorney
General to assist the Congress in drafting this modification
to the sentencing provisions of S. 1. Since most violent
crime is in the jurisdiction of State and local criminal
GENALD
LIBRARY
more
5
courts, I call upon the States to establish similar mandatory
sentencing systems. Too many persons found guilty of serious,
violent crimes never spend a day in prison after conviction.
I would emphasize that the aim of this program of
mandatory imprisonment is not vindictive punishment of the
criminal, but protection of the innocent victim by separating
the violent criminal from the community. These victims --
most of whom are old or poor or disadvantaged -- have a valid
claim on the rest of society for the protection and the per-
sonal safety that they cannot provide for themselves.
Reasonable mandatory minimum sentences can restore the
sense of certainty of imprisonment upon which the deterrent
impact of criminal law is based. Mandatory sentences need not
be long sentences; the range of indeterminacy need not be
great. In fact, wide disparities in sentences for essentially
equivalent offenses give a look of unfairness to the law. To
help eliminate that unfairness, Federal appeals courts
should be given some authority to review sentences given
by Federal trial court judges -- to increase or reduce them
so that the punishments will be more nearly uniform through-
out the Federal system. I am also asking the Attorney
General to review this problem to ensure that the Federal
sentencing structure, which is now based on the indeterminate
sentence, is both fair and appropriate. Among other things,
it may be time to give serious study to the concept of so-
called flat time sentencing" in the Federal law.
In addition to reform of the criminal law, we must
improve the manner in which our criminal justice system
operates. Effective deterrence to law-breaking is currently
lacking, in part because our criminal justice system simply
does not operate effectively.
A logical place to begin discussion of such improvement
is the prosecutor's office, for it is there that important
decisions are made as to which offenders should be prosecuted,
what cases should be brought to trial, when plea bargains
should be struck and how scarce judicial resources should be
allocated. Many prosecutors' offices currently lack the
manpower or management devices to make those decisions
correctly. Prosecutors often lack information on a defendant's
criminal history and thus cannot identify habitual criminals
who should be tried by experienced prosecutors and, if convicted,
sent to prison. In too many cases, they lack efficient systems
to monitor the status of the numerous cases they handle. If
improved management techniques could be made available to prosecu-
tors, the likelihood of swift and sure punishment for crime would
be substantially increased.
At the Federal level, last September I directed the
Department of Justice to develop and implement a program to
deal with career criminals, with the objectives of (1) providing
quick identification of persons who repeatedly commit
serious offenses, (2) according priority to their prosecu-
tion by the most experienced prosecutors, and (3) assuring
that, if convicted, they receive appropriate sentences to
prevent them from immediately returning to society once
again to victimize the community.
Programs to deal with habitual criminals will be
encouraged at the State and local levels through the use
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6
of the Law Enforcement Assistance Administration model pro-
grams and discretionary grants already underway.
To illustrate the nature of this problem, let me point
out that in one city over 60 rapes, more than 200 burglaries
and 14 murders were committed by only 10 persons in less than
12 months. Unfortunately, this example is not unique.
The results of a repeat offender project recently launched
in the Bronx County District Attorney's Office, City of New
York, are hopeful. The first year's experience showed a 97
percent felony conviction rate and a reduction of time in case
disposition from an average of 24 months to an average of
three months. In addition, prison sentences resulted in 95
percent of the career criminal cases prosecuted.
A second improvement in the criminal justice system may
be obtained by diverting certain first offenders -- not all,
but some -- into rehabilitation programs before proceeding to
trial. The Department of Justice has begun a pllot program of
this kind designed to achieve two important goals. First, it
will seek to reduce the caseloads of Federal courts and prose-
cutors through expeditious treatment of offenders who are good
prospects for rehabilitation. Second, it will seek to enable
the offenders who successfully satisfy the requirements of the
diversion programs to avoid criminal records and thus increase
the likelihood that they will return to productive lives.
Experimentation with pretrial diversion programs should
continue and expand. However, careful efforts must be taken
to prevent these programs from either treating serious offenders
too leniently, or, on the other hand, violating defendants'
rights. By coupling this pretrial diversion program with a
mandatory term of imprisonment for violent offenders, we will
make sure that offenders who deserve to go to prison will go
to prison. At the same time, those who may not need imprison-
ment will be dealt with quickly and in a way that minimizes
the burden on the criminal justice system.
The criminal and civil caseloads in trial and in appellate
courts have grown over the years, while the number of Judges
assigned to handle those cases has not kept pace. In 1972,
the Judicial Conference of the United States recommended the
creation of 51 additional Federal District Court judgesnips
in 33 separate judicial districts across the country. Senate
hearings on legislation incorporating this proposal were
conducted in 1973. To date, however, the legislation has not
been scheduled for floor action. The increasing needs of the
Federal courts make this measure an urgent national necessity
of a nonpartisan nature -- for justice delayed is too often
justice denied. In addition, seemingly technical but important
reform in the Federal criminal justice system can be achieved
by. expanding the criminal jurisdiction of United States
Magistrates. This reform will enable the relatively small
number of Federal judges to focus their efforts on the most
significant criminal cases. The Criminal Justice Reform Act
contains a provision that will achieve that result, and I am
giving it my specific support.
When a defendant is convicted, even for a violent crime,
judges are too often unwilling to impose prison sentence, in
part because they consider prison conditions inhumane. Moreover,
a cruel and dehumanizing penal institution can actually be a
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7
breeding ground for criminality. In any case, a civilized
society that seeks to diminish violence in its midst cannot
condone prisons where murder, vicious assault and homosexual
rapes are common occurrences.
The Federal Bureau of Prisons has embarked on a program
to replace large, outdated prisons with smaller, more modern
ones. The Bureau has seven new corrections institutions of
this sort under construction. All are designed to be civilized
places that can be governed effectively by the wardens and
correctional officers rather than by the most brutal and inhuman
prisoners. In addition, the Bureau is opening new institutions
in three major cities to replace overcrowded, antiquated local
jails which formerly housed Federal prisoners awaiting trial.
The program to improve Federal prisons must be paralleled by
State efforts, because the problem of decrepit prison facilities
that are hothouses of crime is worst at the State and local level.
Unless prisons are improved, many judges will only reluctantly
commit convicted offenders to them, even if they are guilty of
serious crimes and have previous criminal records.
I know that grave questions have been raised by qualified
experts about the ability of the corrections system to rehabilitate
offenders. These are important and serious questions. They
go to the very heart of the corrections system. While the
problem of criminal rehabilitation is difficult, we must not
give up on our efforts to achieve it, especially in dealing with
youthful offenders. Crime by young people represents a large
part of crime in general. The 1973 statistics indicate that
45 percent of persons arrested for all crimes are under 18 years
of age. Whatever the difficulty, we must continue our efforts
to rehabilitate offenders, especially youthful offenders. To
do less would be to write off great numbers of young people as
unsalvageable before they have even come of age. I have
directed the Attorney General, as Chairman of the Cabinet
Committee on Crime Prevention and Rehabilitation, to work
in close cooperation with the Secretary of Labor, the Secretary
of Health, Education, and Welfare and other concerned agencies
of the Executive Branch to ensure that the Federal government
is making the best possible use of its resources in this
crucial area.
Whatever the corrections system might accomplish in
rehabilitating offenders while they are in prison will be, lost
if the individual leaves prison and cannot find a Job, simply
because he has been convicted of a crime. I urge employers
to keep an open mind on the hiring of persons formerly convicted
of crimes. The U. S. Civil Service Commission currently
administers a program designed to prevent Federal employers
from unjustly discriminating against ex-felons. I am directing
the Commission to review this program to ensure that it is
accomplishing its objectives. I am also calling on the
National Governors Conference to consider steps the States can
take to eliminate unjustified discriminatory practices. Giving
ex-offenders who have paid their penalty and seek to "go straight"
a fair shake in the job market can be an effective means of
reducing crime and improving our criminal justice system.
In addition to this general effort to reform and improve
the criminal justice system, the Federal law should be specifically
revised to take into greater account the needs of victims of
crime. They, as well as the general public, must be made aware
that the government will not neglect the law-abiding citizens
whose cooperation and efforts are crucial to the effectiveness
of law enforcement.
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8
I urge the Congress to pass legislation to meet the
uncompensated economic losses of victims of Federal crimes
who suffer personal injury. In order to promote the concept
of restitution within the criminal law, the monetary benefits
should come from a fund consisting of fines paid by convicted
Federal offenders.
II. Better Laws and Inforcement
As I pointed out initially, except in limited circumstances,
street crime is a state and local law enforcement responsi-
bility. There is a dimension to this problem, however, that
cannot be adequately dealt with on just the state and local
levels. Criminals with handguns have played a key role in the
rise of violent crime in America. Hundreds of policemen have
been killed in the past decade through the use of handguns
by criminals. The most effective way to combat the illicit
use of handguns by criminals is to provide mandatory prison
sentences for anyone who uses a gun in the commission of a
crime.
In addition, the federal government can be of assistance
to state and local enforcement efforts by prohibiting the
manufacture of so-called Saturday Night Specials that have
no apparent use other than against human beings and by 1m-
proving Federal firearms laws and their enforcement.
At the same time, however, we must make certain that
our efforts to regulate the illicit use of handguns do not
infringe upon the rights of law abiding citizens. I am
unalterably opposed to federal registration of guns or the
licensing of gun owners. I will oppose any effort to 1m-
pose such requirements as a matter of federal policy.
Nonetheless, we can take steps to further guard against
the illicit use of handguns by criminals.
Current Federal gun laws should be revised to provide that
only responsible, bona fide gun dealers be permitted to obtain
Federal licenses to engage 1n the business of selling firearms.
Licenses to sell firearms should also be withheld from persons
who have violated State laws, particularly firearms laws.
Additional administrative controls over the sale of handguns,
including a ban on multiple sales, will help to establish.
dealer responsibility in stopping illicit gun trafficking.
A waiting period between the purchase and receipt of a handgun
should be imposed to enable dealers to take reasonable steps
to verify that handguns are not sold to persons whose possession
of them would be illegal under Federal, State or applicable
local laws.
Second, I have ordered the Treasury Department's Burcau of
Alcohol, Tobacco and Firearms, which has primary responsibility
for enforcing Federal firearms laws, to double its investigative
efforts in the Nation's ten largest metropolitan areas. This
action will assist local law enforcement authorities in con-
trolling illegal commerce in weapons. I have directed,
therefore, that the Bureau of Alcohol, Tobacco and Firearms
employ and train an additional 500 investigators for this
priority effort.
Third, the domestic manufacture, assembly or sale as
well as the importation of cheap, highly concealable
handguns should be prohibited. These so-called Saturday
Night Specials" are involved in an extraordinarily large
number of street crimes. Most have no legitimate sporting
purpose. They are such a threat to domestic tranquility
that we should eliminate their manufacture and sale entirely.
9
These recommendations go to the very heart of the problem
of handgun abuse. If enacted, they should add significantly to
the efforts of State and local law enforcement authorities to
prevent the criminal use of handguns.
There are several other areas in which Federal law and
enforcement can be improved to strike at those who have made
crime a business.
The leaders of organized crime can be prosecuted under
current Federal law only when it can be shown that they
participated in a specific offense, such as gambling, loan-
sharking or narcotics. A reformed criminal code should strike
directly at organized criminal activity by making it a Federal
crime to operate or control a racketeering syndicate. This
revision will make the criminal law apply to organized crime
leaders who seek to conceal their role in the syndicate's
criminal activities.
Since current Federal laws restrict the government's ability
to attack consumer frauds, the statutes punishing fraud and
theft should be revised to make Federal prosecution more ef-
fective. Pyramid sales schemes -- clever confidence games,
in other words - should be specifically prohibited. Federal
jurisdiction over these frauds should be extended to enable
the government to move against them on a nationwide basis.
The protection of constitutionally guaranteed civil rights
is a primary duty of the Federal government. Yet, a private
citizen can be punished for violating constitutional rights
only if he acted in concert with others. Under current law,
even if a State official intentionally commits acts that violate
an individual's constitutional rights, proof of these acts
alone may be insufficient to secure a conviction. Restrictions
which prevent our laws from protecting the constitutional rights
of Americans should be eliminated.
I am particularly concerned about the illegal
trafficking in narcotics and dangerous drugs. These crimes
victimize the entire Nation, bringing personal tragedy and
family destruction to hundreds of thousands. In addition to
the human toll, the property crimes committed to finance
addicts' drug habits are estimated at $15 billion each year.
Federal, State and local governments must continue their
vigorous law enforcement efforts aimed at major traffickers in
narcotics and dangerous drugs. This Administration is committed
to maintaining a strong Federal Drug Enforcement Administration
to provide leadership in this fight. At the same time, I
continue to recognize our responsibility to provide compassionate
treatment and rehabilitation programs for the hapless victim
of narcotics traffickers.
Recent evidence suggests an increase in the availability
and use of dangerous drugs in spite of the creation of special
Federal agencies and massive Federal funding during the past
six years. I am deeply concerned over these developments and
have, therefore, directed the Domestic Council to undertake a
comprehensive review and assessment of the overall Federal
drug abuse prevention, treatment and enforcement effort to
ensure that our programs, policies and laws are appropriate
and effective.
Finally, white-collar crime is taking an increasing toll
in terms of financial and social costs. The United States
Chamber of Commerce recently reported that in 1974 white-collar
crime cost the public approximately $40 billion, excluding
the costs of price-fixing and industrial espionage. In
more
10
addition to direct economic losses, white-collar crime can
destroy confidence in and support for the nation's economic,
legal and political institutions. In recognition of the
gravity of the impact of white-collar crime, I have directed
the Attorney General to undertake new intitiatives to
coordinate all Federal enforcement and prosecutorial efforts
against white-collar crime.
III. Providing Financial and Technical Assistance
The Federal government must continue to help State and
local governments in carrying out their law enforcement
responsibilities. Therefore, I will submit to Congress a
bill that will continue the Law Enforcement Assistance
Administration through 1981.
The LEAA annually provides millions of dollars of
support to State and local governments in improving the
overall operation of their criminal justice systems. Ad--
ditionally, the LEAA serves as a center for the development
of new ideas on how to fight crime. Examples of several
LEAA innovations have already been noted in this Message.
The bill that I will submit will authorize $6.8 billion for
LEAA to continue its work through 1981.
Several aspects of the reauthorization bill deserve special
mention. It will increase the annual funding authorization for
LEAA from $1.25 billion to $1.3 billion. The additional $250
million over five years will enable the agency's discretionary
program to place greater emphasis on programs aimed at reducing
crime in heavily populated urban areas. It is in these areas
that the problem of violent street crime has reached critical
proportions. The LEAA "High Impact program, which is designed
to provide additional assistance for cities and counties with
high crime rates, has had encouraging success. This additional
authorization will permit LEAA to build upon that success.
The bill will also place special emphasis on improving
the operation of State and local court systems. Specifically,
it will include such improvement within the statement of purposes
for which LEAA block grant funds can be utilized. Too often,
the courts, the prosecutors and the public defenders are
overlooked in the allocation of criminal justice resources.
If we are to be at all effective in fighting crime, state and
local court systems, including prosecution and defense, must
be expanded and enhanced.
In conclusion, I emphasize again that the Federal government
cannot, by itself, bring an end to crime in the streets. The
Federal government can seek the cooperation and participation of
State and local governments. Such cooperation is vitally im-
portant to this effort. The cumulative effect of persistent
Federal, State and local efforts to improve our laws and eliminate
difficulties that encumber our criminal justice system offers
the only hope of achieving a steady reduction in crime.
I am confident that, if the Congress enacts the programs
that I have recommended, the means available for an effective
attack on crime will have been substantially strengthened.
I
call upon the Congress to act swiftly on these recommendations.
I also call upon State and local governments to move rapidly
in strengthening their processes of criminal justice. Together,
we will restore to this nation that sense of domestic tranquility
so essential to the pursuit of happiness.
GERALD R. FORD
THE WHITE HOUSE,
June 19, 1975.
#####
CSC
1977 Presidential Review
Civil Service Commission
Table of Contents
TAB A
Summary tabulation of the 1977 Budget
amounts requested and recommended.
TAB B
Summary of the principal budget decisions
reflected in the OMB recommendation.
TAB C
Issue paper
FORD & LIBRAST
GERALD
FORD JENNED -
/
/
CIVIL SERVICE COMMISSION
1977 Budget
Summary Data
($ in millions)
Budget
Employment, end-of year
Authority
Outlays
Full-time Permanent
Total
1975 Actual
11,706.8
7037.6
6670
7974
1976 February budget
12,263.0
8061.8
6695
8175
enacted
13,323.7
8649.2
XXXX
XXXX
supplementals recommended
16.4
XXXX
XXXX
16.4
agency request
13,343.5
8668.9
7035
8515
OMB recommendation
13,340.
8665.6
6835
8315
6835
8315
OMB ceiling
XXX
XXX
TQ February budget
1624.5
2072.3
XXXX
XXXX
enacted
1597.5
2320.6
XXXX
XXXX
supplementals recommended
7.7
7.7
XXXX
XXXX
agency request
1606.4
2329.4
XXXX
XXXX
OMB recommendation
1605.3
2328.3
XXXX
XXXX
1977 July planning target
14,417.0
9170.0
6835
8315
October planning target
XXX
9624.0
XXXX
XXXX
Agency initial request
16,316.9
10,438.6
7800
9450
Agency revised request
16,290.0
10,076.8
7450
8976
OMB recommendation
16,284.2
10,068.9
6835
8315
1978 OMB estimate
16,157.2
11,000.8
6835
8315
A-1
TAB B
1977 Budget
Civil Service Commission
Agency Request
CSC initially requested $135M, a $17M increase over the 1976 level for central personnel operations
and Intergovernmental Personnel Assistance (IPA) grants. In response to the revised outlay target
of $109M, CSC requested $117M, reducing its original request to double IPA grants and proposing a
few additional reductions. The Commission also identified further actions, which it opposes, to
reach its revised outlay target of $109M. These actions would further reduce IPA grants and eliminate
other requested increases so that 1977 central personnel operations would essentially continue at
1976 levels.
The Commission's original employment request was for 7800 positions, 14% over its 1976 ceiling of 6835.
Their revised request was for 7450. If held to the revised outlay target of $109M, CSC would still
request an increase of 397 over 1976, which could be financed through trust fund transfers and
reimbursable work rather than direct appropriations.
OMB Recommendation
OMB recommendations generally reflect agreement with the CSC approach to reach the ceiling of $109M.
IPA grants would be reduced to $10M from the 1976 level of $15M. Our recommendation in other
discretionary programs will be adjusted if necessary to allow resources (approximately $1M) to implement
decisions of the President's Panel on Federal Compensation and to provide the number of election
observers required in 1977 by the Department of Justice to enforce the Voting Rights Act.
OMB recommends holding employment at the 1976 level.
Areas of Expected Disagreement with CSC
CSC may appeal the proposed cut-backs in requested increases for central personnel operations, arguing
that services to federal agencies will suffer as a result of these cut-backs.
GENALD FORD
B-1
1977 Budget
Civil Service Commission
Summary of Recommended Program Reductions
($ in millions)
1976
TQ
1977
1978
FTP
FTP
FTP
0
Employ.
0
BA
0
Employ.
0
Employ.
Current base
8668.9
6835
2329.4
16291.2
10418.2
6835
11763.1
6835
Recommended level
8668.9
6835
2328.3
16284.2
10068.9
6835
11000.8
6835
Reduction
0
0
-1.1
-7.0
-349.3
0
-762.3
0
Program reductions:
Civil Service Retirement
apply 60% on annuities
(legislation
required)
0
0
0
1.2
222.9
0
480.9
0
Civil Service Retirement
eliminate 1% kicker
(legislation
required)
0
0
0
.6
121.1
0
276.1
0
Intergovernmental
Personnel Assistance
reduce BA and outlays
through Administra-
tive Action
0
0
0
5.0
5.0
0
5.0
U
Central Personnel
GERALD
Operations - reduce
R.
obligational authority
in reimbursable programs
FORD
and reduce BA and outlays
LIBRARY
in direct programs
0
0
1.1
.2
.3
0
.3
0
Total reductions
0
0
1.1
7.0
349.3
0
762.3
0
0-2
1977 Outlav Reductions
Civil Service Commission
Retirement and Disability Program
($ in millions)
1976
TQ
1977
1978
FTP
FTP
FTP
0
Employ.
0
BA
0
Employ.
0
Employ.
Amount:
Current base
8574.8
XXX
2320.3
15709.7
10036.4
XXX
11159.5
XXX
Recommended level
8574.8
XXX
2320.3
15709.1
9915.3
XXX
10883.4
XXX
Reduction
0
XXX
0
-.6
-121.1
XXX
-276.1
XXX
Actions required:
Legislation to eliminate 1% bonus to cost-of-living adjustments in annuities.
Program impact:
Cost-of-living adjustments in current law vary with the rate of change in the Consumer Price
Index. When the CPI rises by 3% or more for three consecutive months, annuitants receive a
cost-of-living adjustment at the highest of these rate increases plus a 1% bonus. The bonus was
intended to compensate retirees for the time lag between the actual rise in living costs and the
annuity increase, but this bonus feature leads to overcompensation in the long run. This
proposed action would correct that overcompensation and also reduce the growth rate
in unfunded liability of retirement and disability system.
CLRALD
FORD
ANVESIT
B-3
1977 Outlay Reductions
Civil Service Commission
Retirement and Disability Program
($ in millions)
1976
TQ
1977
1978
FTP
FTP
FTP
0
Employ.
0
BA
0
Employ.
0
Employ.
Amount:
Current base
8574.8
XXX
2320.3
15710.9
10259.3
XXX
11640.4
XXX
Recommended level
8574.8
XXX
2320.3
15709.7
10036.4
XXX
11159.5
XXX
Reduction
0
0
-1.2
-222.9
-480.9
Actions required:
Legislation to limit cost-of-living adjustments for annuitants in 1977 to 60% of their amount under
the present formula.
Program impact:
This cap proposal would replace a legislative proposal submitted to Congress by the President in
March, 1975 to limit cost-of-living adjustments for retirees to 5% in 1976. A cap of this
nature would allow partial maintenance of purchasing power of annuitants during periods of rapid
inflation. It would also reduce the rate of growth in the unfunded liability of the retirement
system.
GERALD
?
FORD
B-4
1977 Outlay Reductions
Civil Service Commission
Intergovernmental Personnel Assistance
($ in millions)
1976
TQ
1977
1978
FTP
FTP
FTP
0
Employ.
0
BA
0
Employ.
0
Employ.
Current base
15
XXX
3
15
15
XXX
15
XXX
Recommended level
15
XXX
3
10
10
XXX
10
XXX
Reduction
0
XXX
0
-5
-5
XXX
-5
XXX
Actions required:
Reduce 1977 budget request.
Program impact:
OMB recommendation will require:
-- maintenance of IPA grants at level of funding characteristic of first year of program
operation in 1970.
-- maintenance of grant program activities at roughly constant levels because of a July 1. . 1975, Congres-
sional change in the matching formula from a 75% to a 50% federal share. CSC submitted legislation
which would have continued the 75% federal match for three more years. As passed by the House,
however, the reduction to 50% in the present law was retained.
B-5
THE
TAB C
1977 Budget
Civil Service Commission
Issue #1 Central Personnel Operations
Statement of Issue
Are additional personnel needed to allow CSC to properly perform its central personnel
operations?
Background
Central personnel operations include keeping personnel policies current, staffing, investigations,
improving personnel management, training leadership and delivery, manpower information systems and
intergovernmental personnel assistance. These operations are financed through direct appropriations
(60% of total staff years) as well as through trust fund transfers and reimbursable activities (40% of
staff years). The Commission originally requested $135M in outlays from direct appropriations and
7800 permanent positions and revised their request to $117M and 7450 positions. If held to
the OMB outlay target of $109M, the Commission would still seek 7232 permanent positions provided
that obligational authority is not reduced in trust fund transfer and reimbursable work. All of
these requests would call for an increase over the 1976 ceiling of 6835.
Alternatives
#1 Agency request: Increase 1977 employment level to 7450 permanent positions. Provide
$117M in outlays.
#2 Agency alternative request: Increase 1977 employment level to 7232 permanent positions.
Hold outlays to OMB ceiling of $109M, but allow increase in trust fund transfers and
reimbursements.
#3 OMB Recommendation: Hold 1977 employment to 1976 level of 6835 permanent positions. Hold
outlays to $109M and reduce obligational authority for trust fund transfers and reimbursements.
FORD
C-1
(
Analysis
Outlays
($ in millions)
1976
1977
Current
Original
Alternative
Alternative
Alternative
Estimate
Request
#1 (Ag. req)
#2
#3 (OMB Rec.
- Keeping Personnel Policies Current
3.2
3.6
3.6
3.6
3.0
- Staffing for Federal Employment
51.1
53.4
53.4
49.7
49.7
(Recruiting and Examining only)
(29.2)
(31.5)
(31.5)
(29.2)
(29.2)
- Investigations (NACI and other)
5.8
5.9
5.9
5.8
5.8
- Revolving Fund(training, full
field investigations, state/local
assistance)
I 1.3
.1
.1
.1
.1
- Improving Personnel Management
16.2
18.4
17.3
16.3
16.5
- Other, including appeals, Fed.
20.8
22.5
20.4
19.1
20.2
Labor Relations Council, Fed.
personnel information systems,
general administration, etc.
(Voting Rights)
(1.5)
(1.2)
(1.2)
(.7)
(1.2)
- State and Local Personnel Assistance
(including grants)
19.7
31.3
16.7
14.7
14.2
- Proprietary Receipts
-.1
-.2
-.2
-.2
-.2
- Total
118.0
135.0
117.2
109.1
109.3
- Total FTP
FORD
6835
7800
7450
7232
6835
C-2
Agency Request: CSC maintains that a ceiling of $117M and 7450 positions is the minimum requirement
for 1977 to provide more rapid service to agencies as well as quality improvements in staffing
and other services. If held to the OMB ceiling of $109M in outlays, CSC would still request an
employment increase which could be financed through trust fund transfers and increased reimbursable
work. CSC feels that holding employment in 1977 level with 1976 will result in less timely
service to agencies and in delaying quality improvements the Commission considers necessary.
OMB Recommendation: Between 1974 and 1976, CSC has had an average annual growth rate of 5.2% in
FTP's and 8.4% in total employment. In light of the anticipated stable level of federal employment
in 1977, we conclude that holding CSC to its 1976 employment level is not unduly onerous. While
it will hold steady or slightly increase processing time in providing services to agencies, it
will not seriously impair the Commission's performance of its basic mission.
C-3
Regulatory
Agencies
FULL TIME PERMANENT PERSONNEL IN
TEN INDEPENDENT REGULATORY COMMISSIONS
Agency
1975 Actual
1976 Estimate
1977 Agency Request
1977 OMB Recommendation
Change: 1976 to 1977 Recom.
NRC
2,006
2,339
2,750
2,529
+ 190
FPC
1,320
1,398
1,717
1,517
+ N9
FCC
1,968
2,100
2,405
2,168
+
68
ICC
2,051
2,135
2,356
2,112
- 23
CAB
720
758
836
778
+
20
FTC
1,569
1,634
1,792
1,664
+
30
SEC
1,935
2,023
2,370
2,080
+
LPI
57
CPSC
884
890
1,226
890
-
FMC
305
316
375
316
-
CFTC
289
489
539
439
- 50
TOTAL
13,047
14,082
16,366
14,493
+ 411
Growth in Agency Employment:
1975 to 1976
1976 to 1977 Ag. Request
1976 to 1977 OMB Rec.
1975 to 1977 OMB Rec.
+1,035 (7.9%)
+2,284 (16.2%)
+411 (2.9%)
+1,446 (11.1%)
GERALD
F.
FORD
LIBRARY
Summary of Other Regulatory Agencies
Budget Authority and Total Employment
FY 75 Actual
FY 76 Estimate
FY 77 OMB Recom.
FY 77 - FY 75 Changes
Agency
BA
Total
BA
Total
BA
Total
BA
Total
($ mil.)
Employment
($ mil.)
Employment
($ mil.)
Employment
($ mil.)
Employment
EPA:
Construction Grants
7,666.0
591
9,000.0
937
.0
937
-7,666.0
346
850.0
9,627
771.0
9,628
730.0
9,628
- 120.0
+
1
Operating Programs
Total
$8,516.0
10,218
$9,771.0
10,565
$730.0
10,565
-7,786.0
+ 347
FEA:
Regulatory
41.0
1,222
32.1,
1,125
16.4
112
-
24.6
-1,110
Other
89.0
2,023
228.0
2,075
136.0
1,592
+
47.0
- 431
Total
$ 130.0
3,245
$ 260.1
3,200
$152.4
1,704**
+
22.4
-1,541**
Agriculture:
APHIS
421.0
14,734
366.0
14,769
387.0
14,679
34.0
-
-
55
Commerce:
Patent Office
77.5
2,902
83.3
2,882
83.2
2,800
+
5.7
-
102
HEW:
FDA
201.0
6,536
203.0
6,624
220.0
6,695
+
19.0
+ 159
Interior:
MESA
68.0
2,973
80.0
3,123
82.0
3,183
+
14.0
+ 210
Labor:
OSHA
102.0
1,987
116.0
2,171
109.3*
2,171
+
7.3
+ 184
ESA
76.1
2,859
84.0
2,964
88.0
2,964
+
11.9
+ 105
LMSA
36.8
1,093
46.0
1,416
47.2
1,416
+ 10.4
+ 323
Transportation:
NHTSA
269.0
827
124.0
868
172.0
868
+
I
97.0
41
NLRB
62.5
2,425
67.8
2,664
75.4
2,901
+
12.9
+ 476
EEOC
55.1
2,161
63.0
2,434
65.8
2,448
+
10.7
+ 287
NTSB
9.6
280
11.2
321
12.0
321
+
2.4
+
41
TOTAL ***
$2,269.6
49,626
$2,047.4
50,989
$2,088.3
50,186
- $ 181.3
+ 560
* Does not include $5.7 million transferred to Office of the Solicitor for OSHA related work.
** If President signs H.R. 7014, Regulatory Force will be increased to approximately 1161, and total employment to 2890.
*** Includes only regulatory parts of FEA and EPA.
1977 Presidential Review
Regulatory Agencies
Table of Contents
*Interstate Commerce Commission
*Civil Aeronautics Board
*Federal Trade Commission
Securities and Exchange Commission
Federal Communications Commission
Federal Maritime Commission
*Issue paper, background paper, or agency appeal
letter follows summary.
Interstate
Commerce
Commission
INTERSTATE COMMERCE COMMISSION
Comments
Appeal at issue is 221 positions and $6.3
million.
Agency requested an increase of 221 pro-
gram positions for regulatory reform
activities and its four major economic
regulatory programs required by statute--
formal proceedings, financial oversight,
compliance and tariff examination. OMB
recommendation represents a reduction of
23 positions and extensive reprogramming
of existing resources directed to reform
activities. Agency appeals for original
request of 221 positions since a reduction
of the magnitude proposed could not be
absorbed without seriously jeopardizing
GE34L0 FORD LIBRARY
recent progress, and such reductions would
make it difficult to accomplish regula-
tory reforms desired by the President.
(See attached background paper.)
Budget
Full-time
authority
Outlays
permanent
(In thousands of dollars)
employment
1975 actual
42,800
43,900
2,051
1976 current estimate
17
65,654
51,500
2,135
1976 OMB employment ceiling
XXX
XXX
2,135
Transition quarter current
estimate
13,054
13,054
XXX
1977 agency request
60,800
77,900
2,356
1977 OMB recommendation
54,500
60,000
2,112
Effect of OMB recommendation
on agency request
-6,300
-7,900
-244
1978 estimate
54,500
60,000
2,112
1/ Budget authority reflects a one-time-only $15 million subsidy for
directed rail service. Outlays are shown in 1977 and 1978.
INTERSTATE COMMERCE COMMISSION
Background Paper
Agency Appeal
Agency believes that OMB's recommendation of a decrease of 23 positions rather than the 221 requested
is unacceptable based on the following rationale:
Without the requested resources, recent progress will be seriously jeopardized, making it
difficult to accomplish the regulatory reforms desired by the President. Relatively
uncontrollable caseload, mandated by statute, and insufficient personnel will result in a
substantial and unmanageable increase in backlog.
Agency argues that the reprogramming of personnel from its 1976 compliance base will seriously
inhibit its ability to provide consumer assistance (e.g., household goods complaints processing;
loss and damage claims; adequacy of service, etc.).
Additional positions requested for the financial oversight function are necessary to obtain
timely and accurate financial data, implement the rail uniform system of accounts and permit
increased audit frequency.
The tariff review program, particularly consumer-oriented tariff examination, will be seriously
inhibited without additional personnel in 1977 in view of increased volume and complexity of
tariff filings.
OMB Recommendation
OMB's recommendation of a decrease of 23 positions is based on extensive reprogramming of existing
positions presently allocated to the Rail Services Planning Office (RSPO), associated with Northeast
rail restructuring, which will terminate in 1976 and the compliance program.
The thrust of the recommendation is to provide resources for overview planning, economic analysis,
GERALD LIBRARY FORD
broadly applicable rulemaking and regulatory reform management segregated from the routine
processing of caseload. This recommendation is consistent with and supplements ICC's internal
2
regulatory reform blue ribbon panel study. The personnel level recommended as applied to key
reform activities is expected to result in greater efficiencies that will begin to be felt in
1977. Due to the termination of RSPO, 52 positions have been reprogrammed and the remaining
23 have been deleted.
No additional resources are recommended for routine case processing since increased workload
can be absorbed through normal productivity increases and planned ADP applications. Efficiencies
from improved planning and rulemaking will also increase productivity.
ICC will be completing an internal review of its compliance program by mid-1976. It is anticipated
that major gains in efficiency and effectiveness are possible in the program and that personnel
reductions are justified in 1977.
The financial oversight and tariff examination programs are functioning reasonably effectively and
in view of budget restraint government-wide, OMB does not find that ICC's justification warrants
any increase in these areas.
Interstate Commerce Commission
Washington, D.C. 20423
OFFICE OF THE CHAIRMAN
November 14, 1975
Honorable James T. Lynn
Director
Office of Management and Budget
Executive Office of the President
Washington, D. C. 20503
Dear Mr. Lynn:
On November 10, 1975, the Office of Management and Budget (OMB)
notified the Commission that its Fiscal Year 1977 budget request had been
reduced from 2, 418 positions and $60, 987, 000 (adjusted to include $2.0 million
for pay raise) to 2, 174 positions and $52,676,000.
While the Commission fully appreciates the economic climate that
exists today and understands the need for reduced Federal expenditures, a
reduction of this magnitude cannot be absorbed by this agency without
seriously jeopardizing the progress made in recent years and making it all
but impossible to accomplish the regulatory reform desired by the President,
Congress, the public and the Commission itself. Because this budget cut will
most certainly have an adverse impact on all facets of surface transportation
regulation, the Commission has no alternative but to appeal strenuously this
proposed reduction.
Our appeal is on two levels. First, we are requesting the restoration
of all the positions and funds included in our original submission. Secondly,
if our appeal is denied, and OMB's recommendation is not changed, the
Commission is requesting an additional $3, 484, 000 in both budget and outlay
authority to fund the approved position level, and is seeking relief from the
FORD
requirement that it obtain OMB approval to reprogram approved positions.
In addition, we are asking that a supplemental budget request for 30
positions and $780, 000 for Fiscal Year 1976 and 30 positions and $375,000
for the transition quarter to establish an Office of Public Counsel be con-
sidered as part of the appeal process. The OMB recommendation includes
James T. Lynn
the 30 positions for the Public Counsel beginning in Fiscal Year 1977. The
Commission believes that this important function should be staffed as soon as
possible. Our proposal is explained in detail in Enclosure 3.
Before getting to the specifics of our appeal for each of the program
areas, I believe it is important to reiterate that the Commission has always
done its utmost to operate at minimum resource levels. We take our financial
management responsibility seriously. Our budget estimates are carefully
thought out and our internal budget process is designed to purge unjustified
requests from our submissions. At first glance, our Fiscal Year 1977 request
appears to be quite high; however, it reflects the result of our inability in past
years to obtain the minimum staffing we deem absolutely necessary to perform
our statutory function and, in the Commission's estimation, it accurately portrays
the resources needed to operate a regulatory program that meets the President's
directives.
The following is a brief summary of the impact of the proposed budget
cuts in each program area. The details are shown in Enclosure 1.
Formal Proceedings - The reduction will result in a substantial
increase in the backlog of pending cases making it impossible for
the Commission to comply with the President's desire to reduce
regulatory lag. Our program to apply cost/benefit analysis to
Commission decisions will be delayed indefinitely.
<080 LIBRARY &
Compliance - The OMB allowance will necessitate a reduction
in the level of service now provided to the consumer and have an
adverse effect on our nationwide program to increase the expeditious
and efficient use of the Nation's transportation resources.
Financial Oversight - The allowance will prevent the Commission
from obtaining accurate financial information in a timely way for use
in its decision-making process and delay the development and publi-
cation of a system of accounts for railroads.
Tariff Examination - The budget reduction will preclude the ex-
tension of the successful consumer-oriented tariff examination
program, thereby eliminating the opportunity to protect further the
consumer from discriminatory and unlawful rates.
- 2 -
James T. Lynn
As noted earlier, should our appeal be denied and the OMB recommen-
dation become final, additional funding of $3, 484, 000 will be needed to operate at
the approved level. The specific requirements are listed on Enclosure 2. Briefly,
compensation and benefit costs for within-grade increases, the annualized cost of
the 55 new positions authorized in Fiscal Year 1976, rate increases for health
benefits contributions and FTS, and the continuation of our 5-year ADP plan, among
other things, will result in mandatory increases in excess of the funds provided in
the OMB recommendation. In total, the Commission estimates that a budget
authority of $56,160,000 will be needed in 1977 instead of the $52, 676, 000
recommended.
SLUC space costs present a particular problem. The SLUC estimate for
Fiscal Year 1976 (which is included in the 1976 base in Enclosure 2) is only
$2,835,000. That estimate was formulated at Fiscal Year 1975 rates as a con-
sequence of House action specifically limiting GSA to the old rates; concurrently
the House reduced our appropriation by $670,000, the amount of the SLUC rate
increase being denied. In subsequent action, however, the limitation on GSA was
altered by Conference Committee to 90 percent of Fiscal Year 1976 SLUC bills
received. The effect of that change is to increase substantially the SLUC bills
expected from GSA. Based on actual bills received for the first two quarters of
Fiscal Year 1976, we expect to be billed about $3,175,000 for the full year. We
will be forced, therefore, to cover a deficit of $340,000. Moreover, GSA has
formally indicated that a rate increase of 7.5 percent will be in effect in Fiscal
Year 1977. Consequently, the Commission will need an additional $238,000 to
fund the same space at the higher rates, unless OMB can obtain a binding letter
of agreement from GSA foregoing the planned rate increase in Fiscal Year 1977.
The Commission also notes that this year's recommendations included
detailed policy guidance on the programming of the positions approved by OMB,
and that OMB approval would be required to effect any changes. The Commission
strongly opposes this requirement as an unwarranted and unnecessary infringement
on our management prerogatives.
The Commission alone bears the responsibility for carrying out the
statutory requirements of the Interstate Commerce Act and related statutes, rules,
and regulations. With that responsibility must come the full authority
- 3 -
FORD
H
BERRED
James T. Lynn
to determine how available resources will be used to accomplish our mission.
The Commission believes that full responsibility and full authority must go
hand-in-hand for a successful operation.
We have always welcomed the advice and counsel of OMB. We value it
because it gives us an overall view of our operations that we might otherwise
overlook because of our daily involvement. We have no quarrel about con-
sidering OMB's viewpoint as one element in the development of our management
policy. It is wise to do so. But we must object to any attempt to make it a
controlling factor.
The Commission's job is to promote an efficient and effective surface
transportation industry through regulation. This is our only business. In our
estimation, this places us in the best position to make decisions on the use of
our resources. With all due respect to the staff, we submit that OMB does not
have the familiarity and depth of knowledge necessary to make these kinds of
judgments.
A specific example is the recommendation by OMB that our Compliance
Program be reduced by 30 positions below current levels and that these positions
be reprogrammed to higher priority programs, presumably the new Office of
Public Counsel. First, the Commission disagrees with the low priority assess-
ment OMB places on this program. We experience first hand on a daily basis
the complaints and requests for assistance from the public. We know the adverse
public reaction that would result if we were to curtail or eliminate these services.
Yet, if the OMB allowance is permitted to stand, this would occur. Another
practical problem with implementing OMB's proposal is that the skills required
in different programs are not interchangeable. Thus, the Commission could
only accomplish the reprogramming by attrition, which would weaken both programs,
or by a complete conversion at one time which would no doubt require a reduction
in force. Finally, the OMB recommendations would lock us into a staffing con-
figuration that would not be effective until October 1, 1976. It is not unreasonable
to assume that conditions in the industry will have changed by that time which in
turn will require adjustments in how we assign our staff. The flexibility required
to do the job on a day-to-day basis would be severely affected if all reprogramming
has to be cleared in advance by OMB.
- 4 -
James T. Lynn
The Commission believes that OMB should refrain from direct inter-
vention in management decisions that rightly belong to an agency, and limit
its oversight functions to the results that are achieved. Thus far, I have
been unable to discover any specific statutory authority for such direct inter-
vention. If such authority does indeed exist, I request that the Commission
be relieved of the requirement to clear position adjustments with OMB.
I ask for your personal consideration of this matter.
They George Sincerely M. yours, Stafford Tassaid
Chairman
Enclosures (3)
- 5
Enclosure 1
FORMAL PROCEEDINGS
This program encompasses the operation involved in deciding all formal and
certain informal proceedings filed with the Commission. It includes granting operat-
ing authorities, regulating rates and deciding financial matters. It also involves pro-
viding the necessary economic, cost and financial data used in the decision-making process
and administrative and management support. The decision to make drastic reductions in
this area will severely hamper the Commission's efforts in meeting President Ford's
request for improvements in regulatory practices.
The volume of casework associated with this program has been a source of con-
tinuing concern. To reduce the number of positions will lead to an unmanageable in-
crease in the backlog of formal cases. In the Operating Rights area alone, 6,562 cases
were pending at the end of Fiscal Year 1975; it is estimated that the number of cases
pending in Fiscal Year 1976 will be 6,962; and with no increase in positions for Fiscal
Year 1977, the number of formal cases pending will grow to approximately 7,322.
The Commission has established a policy of giving all rulemaking proceedings
expeditious consideration and handling, as well as defining the time limits for each
processing stage of all casework. In order for the time limits to be truly effective,
the caseload assigned to each staff member must be reduced to a workable level. With-
out the additional resources the Commission cannot attack effectively the regulatory lag
problem.
Increased demands have been made on our Environmental Staff during the past
fiscal year Our present Staff made considerable progress in reducing the vast case
FORD LIBRARY 3
backlog which had accumulated subsequent to the Harlem Valley decision; however,
with no additional staff we will not be able to reduce the large number of pending rail
abandonment and construction applications, rate cases and rulemaking proceedings,
and our anticipated ability to maintain the pending caseload at a manageable level
will be irreparably damaged. Yet we are required by Supreme Court decision to con-
sider environmental questions in all proceedings.
During the course of evaluating each case, Commission decision-makers must
rely heavily on information and statistics provided by several Commission organi-
zations. This support involves cost, financial and economic data, and computer
assistance. Cost formula development and analyses provide vital information in the
decision-making process for formal proceedings. Without all the additional resources
requested, our efforts will be hampered severely to develop sophisticated analyses
programs and to analyze the cost data collected within a reasonable timeframe. The
Commission's efforts to include cost/benefit analysis in its decision-making as re-
quested by the President, will be indefinitely delayed.
For the past two years, the Commission has expanded its use of computer
technology in the proceedings program. Without all the additional positions for our
computer assistance program we will not be able to automate many of the tasks in
the proceedings process, or to provide better management information and sophis-
ticated computer programs to support our cost data development and analysis work.
Waybill Program - The Commission strongly urges that the resources requested
to return processing of the rail carload waybill sample to ICC control be restored to
the Fiscal Year 1977 budget. A reliable, timely information base on the flow and
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GERALD < FORD
other basic characteristics of railroad traffic is indispensable to the effective resolution
of regulatory issues by the Commission. Under the Department of Transportation's
7-year administration of the waybill sample, however, there have been lengthy delay's
in obtaining necessary data. Even when available, much of the information has been of
limited use and questionable reliability. These problems have been amply demonstrated
in Ex Parte No. 270, Investigation of the Railroad Freight Rate Structure, and similar
cases where sound and timely data were required. Despite DOT's past and present
claims of efforts to improve the sample, our experience provides no basis for confidence.
More specifically, under DOT administration there has been a lack of control of
waybills after they are received. An ICC check of the computer tape received from DOT
indicated that 5,000 records apparently were missing. After repeated ICC requests, DOT
submitted fewer than .350 of the missing records, with the rest unaccounted for.
A comparison of waybill receipts with freight commodity statistics shows that
a serious waybill receipt deficiency has developed and is getting progressively worse.
Under ICC administration, waybill receipts were about 95 percent of carload terminations
reported in the freight commodity statistics. DOT was off 12 percent in 1972, 13 percent
in 1973, and may be off nearly 22 percent in 1974. Deficiencies of such magnitude render
the sample virtually useless.
There also has been an unacceptable number of blank items for key characteristics
in the 1972 and 1973 waybill file computer tapes. The table below indicates the extent of
the larger gaps:
- 3 -
Number of Records
1973
1972
Total
212,751
207,752
Miles missing
4,948
625
Type of car missing
3,288
5,382
The absence of these records greatly reduces the sample's usefulness and
reliability.
Finally, the Commission's budget estimates specifically recognize the need to
overhaul the waybill program to reconcile it with the state of the art in railroad
operations, billing and rating practices, and computer technology and sampling
techniques. Since the sample is being collected under ICC order and is intended to
satisfy identified regulatory needs, as distinguished from the more generalized or
summary needs of DOT's freight flow program, we believe that control of the redesigned
program should be vested with the Commission.
FORD
. 4 -
COMPLIANCE
FORD one LIBRARY
The decision to make such drastic reductions in the Compliance Program
(30 positions below the current authorization) undoubtedly stems from the Pres-
ident's emphasis on the overall reduction of Federal expenditures. Clearly, the
implication here is the elimination of all superfluous government spending and a
reduction in those areas having little direct impact on the Nation. However, cer-
tain budget reductions, such as those in the Compliance Program, definitely will
not aid in achieving these goals, nor will they assist in carrying out the President's
desire for overall increased responsiveness to consumer interests. As recently
as July, 1975, President Ford expressed his personal concern that too little pro-
gress was being made in the area of regulatory reform. Specifically, he mentioned
that greater attention must be paid to the consumer. Apparently, by this budget
reduction, the Office of Management and Budget has placed a relatively low priority
on the Compliance Program. With that assessment, we must respectfully disagree
because consumer assistance is fundamental to the entire program. For example,
a vast amount of resources are directly involved in such areas of consumer concern
as household goods and the adequacy of rail and motor bus service. In fact, over
11,000 household goods complaints were handled during Fiscal Year 1975 alone.
Therefore, a reduction in this program will have a direful impact upon our efforts
to comply with the desires of the President.
The Commission's Compliance Program is conducted primarily by the Bureaus
of Operations and Enforcement. Specific activities include: (1) Receiving and pro-
cessing temporary authority applications and evaluating all carrier applications for
operating authority; (2) issuing and administering rules and regulations governing
- 5 -
carrier operations; (3) inspecting carrier operations and records; (4) enforcing
criminal and civil provisions of the Interstate Commerce Act and related Acts;
and, (5) assisting the public to achieve just and prompt settlement of complaints
about carrier operations. This mammoth undertaking is assigned to a field staff
strategically placed in major cities throughout the country backed by a supporting
departmental staff in Washington, D.C. Information gained from this regulatory
overview is used to determine the adequacy of carrier service with respect to
consumer requirements for safe, dependable, economical, and fair transportation
of both persons and goods.
Recently, the Commission's Compliance Program has been strengthened
and redirected toward providing even greater assistance to both the individual
consumer and the shipping public, particularly in view of such occurrences as
the bankruptcy of the REA Express Company. Assistance in such problem areas
as household goods, small shipments, loss and damage claims and adequacy of
service has received high priority within the Commission. Moreover, our re-
sponsiveness to consumer interests and efforts in these areas have received favor-
able recognition by Virginia Knauer, Special Assistant to the President for Consumer
Affairs. Therefore, it is imperative that the Commission not only be permitted to
maintain the present level of consumer assistance, but that it be allowed to con-
tinue developing a stronger consumer-oriented Compliance Program.
Furthermore, the effectiveness of the Compliance Program has and will con-
tinue to have a direct impact upon the expeditious and efficient transportation of
the Nation's resources. For example, the United States has recently signed a
- 6 -
FORD LISENSE
multi-year grain sale agreement with the Soviet Union. Based on prior experience,
the Commission can ill afford to weaken its ability to respond rapidly to another
shortage of freight cars.
Similarly, the Nation's energy situation dictates an even greater use of
domestic fuels and a lesser dependence on imported fuels. The use of coal will
continue to play an ever-increasing role in the over-all energy picture. The
Commission is responsible for insuring adequate and economical transportation
service and in view of an increasing demand for coal, it is essential that
sufficient staffing be provided to carry out this responsibility, particularly as
it relates to the shipment of energy resources.
The Office of Management and Budget's decision to reduce the Compliance
Program even below the Fiscal Year 1976 level will severely hinder the Commission's
efforts toward promoting safe, adequate, and economical transportation service.
Also, a reduction of this magnitude definitely will have a deleterious impact upon
the Commission's responsiveness to consumer interests as mandated by the
President.
- 7 -
FINANCIAL OVERSIGHT
GERALD FORD VIBRARI
The functions of this program include formulating and policing a uniform
system of accounts, compiling financial statistics, operating the Commission's
Early Warning System, ovèrseeing financial disclosures by regulated carriers and
conducting audits of carriers' financial records.
The Early Warning System was established several years ago to keep the
Commission apprised of the financial condition of railroads. Last year, the system
was expanded to provide information on the 100 largest motor carriers. Positions
were provided in the 1976 budget to design a step-by-step analysis procedure and
establish the criteria for determining the financial rating of a carrier. Without
additional positions in 1977, it will not be possible adequately to maintain and update
the system and make in-depth analyses of carriers in financial distress.
Congress recently has expressed growing concern about the need for a new
uniform system of accounts for railroads. Legislation has been introduced that
would require the Commission to develop such a system within a relatively short
timeframe. The Commission also recognizes this need as a top priority in the
accounting area. A system must be established that will integrate financial and
cost data concepts and identify revenues and costs associated with branch lines.
The Commission's work will not stop with the publication of the system. Once
established, staff will be required to conduct a series of seminars to assist the
railroads in converting from their old systems, provide interpretations of individual
transactions and modify the text of the system to achieve universal understanding.
- 8 -
The new system will require an almost total revision of the computer program used
to balance and cross-check the data. The lack of additional positions, however, will
prevent the Commission from responding to the growing recognition in Congress and
elsewhere that such a system is needed.
The Commission has been dissatisfied with the delay in getting financial
information from audits of carriers' financial records. The goal is to audit annually,
rather than every two years, all rail carriers with annual revenues of $25 million or
more and general-commodity motor carriers with annual revenues exceeding $3 million.
The auditing workload also has been increased by the addition of rate bureaus to the
audit list, the need for special audits of carriers in financial distress, and the require-
ment for auditing rail carriers involved in a directed service order. Without additional
positions for Financial Oversight, the Commission will be unable to eliminate delays
in obtaining the kind of information which is needed to facilitate efficient surface
transportation nationwide.
FORD
- 9 -
TARIFF EXAMINATION
The Tariff Examination Program encompasses four activities: (1) Exam-
ining and reviewing tariff and schedule publications; (2) providing formal and
informal interpretations of tariff provisions; (3) instituting suspension action
where warranted; and, (4) providing rate and tariff relief from provisions of the
Interstate Commerce Act and Commission regulations. Of these functional areas,
the one requiring the greatest emphasis and resources is the examination and
review of tariff publications. Without additional resources, the Commission will
be unable to enlarge its consumer-oriented review program to detect hidden
charges and discriminatory or otherwise unlawful rates that might escape dis-
covery during routine examination. It also will be unable to provide protection and
assistance for shippers and consumers, especially the small or unsophisticated
ones who lack the sources needed to obtain administrative or judicial relief. Not
incidently, any deficiencies occurring in this program as a result of inadequate
staffing will increase the Commission's overall workload by requiring more
numerous interpretations and suspension actions.
The objectives of the examining and review functions are to insure that tariff
publications filed by the regulated transportation industry comply with the law and
the Commission's regulations and orders, and that tariff provisions are reasonable,
just, and nondiscriminatory in light of the carrier's intrinsic obligation to serve
the general public. These objectives are accomplished by the physical examina-
tion of tariffs and the questioning, rejection, or suspension of those provisions
deemed against the law or the public interest.
- 10 -
GERALD R. FORD
The Commission expects to receive about 360, 000 separate publications
in 1977. The tremendous volume of publications, coupled with their growing
complexity, makes it impossible to check each one in detail. Therefore, the
Commission's examination efforts have been divided into two distinct types of
analyses. The first consists of checking all publications for certain key points
to insure conformity with Commission regulations and orders with respect to
such things as format, legibility, and effective dates. The second involves sub-
jecting a portion of the tariffs to a more complete review for unlawful, unreasonable,
or ambiguous provisions that would adversely affect shippers or the public.
The level of authorized personnel directly affects the quality and magnitude
of these efforts. For example, in Fiscal Year 1975, a reduction in filings enabled
the Commission to expand its consumer-oriented review program without an in-
crease in staff. During that year, about 40 percent of the tariffs were earmarked
for an in-depth review and 30 percent of all tariffs filed were given a complete
examination. The complete examination surfaced hidden charges and discriminatory
rates that otherwise would have gone unnoticed, and which would have dispropor-
tionately penalized small shippers and consumers.
The goal of the program is to examine all of the preselected tariff filings
and a greater share of all tariffs submitted. This will be more difficult to achieve
in 1977 because the inflationary conditions in our economy are expected to pre-
cipitate an increased number of filings containing general and emergency sur-
charge rate increases for all modes of surface transportation. Without increased
staffing, the Commission cannot hope to perform at the level which it feels the public
deserves.
- 11 -
Enclosure 2
COMPARISON OF INTERSTATE COMMERCE COMMISSION
SALARIES AND EXPENSES REQUIREMENTS WITH OMB
RECOMMENDATIONS FOR FISCAL YEAR 1977
Amount required for Salaries
and Expenses based on OMB
allocations and ICC projections
$ 56,160,000
Amount recommended by OMB
$ 52,676,000
Deficiency in funding.
$ 3,484,000
INTERSTATE COMMERCE COMMISSION
SALARIES AND EXPENSE REQUIREMENTS
FOR FISCAL YEAR 1977
BASED ON OMB ALLOCATION OF POSITIONS
SUMMARY
FY 1976 Base
$49,630,000
Pay raise
1,500,000
FY 1976 Revised base
$51,130,000
Mandatory Additions in 1977:
1. Cost of within-grade salary advancements
391,000
2. Benefits related to item 1
45,000
3. Compensation on an annual basis for
additional 55 positions authorized in 1976
441,000
4. Benefits related to item 3
41,000
5. Travel costs related to item 3
15,000
6. Other objects related to item 3
9,000
7. Projected SLUC increase in FY 1976
340,000
8. GSA FY 1977 SLUC 7.5% rate increase
238,000
9. Other objects mandatory rate increases
40,000
10. ADPE annualization
169,000
11. ADPE procurement
489,000
Miscellaneous other objects
157,000
Pay raise annualization
500,000
14. Health benefits contribution
187,000
15. Less: One day's pay
( 154,000)
$2,908,000
New Position Increases in 1977:
1. Public Counsel2
1,500,000
2. Other new positions
1,194,000
3. Compliance reduction
( 546,000)
4. Proceedings reduction
( 103,000)
5. RSPO reduction
(1,100,000)
945,000
Additional Program Requirements in 1977:
1. Travel
100,000
2. Training
123,000
3. Other objects
954,000
1,177,000
$5,030,000
$56,160,000
Reduction of $300,000 by Conference Committee is included
in FY 76 Base per OMB instruction.
2/ See details in Enclosure 3.
3/ Represents only six months' funding.
- 2 -
Office of Public Counsel (Activity 1)
The Interstate Commerce Commission has the statutory responsibility to
regulate the surface transportation industry in the public interest and make every
effort to assure that the public is informed of and represented in its proceedings.
The Office of Public Counsel would be established as part of the Commission's efforts
to carry out that responsibility. In any proceeding, the Public Counsel will be
responsible for assisting in the development of the record in the Commission's effort
to determine the public interest with regard to the Interstate Commerce Act and
related statutes.
The following table shows the estimated obligations for Fiscal Year 1976, the
transition period and Fiscal Year 1977 (dollars are in thousands):
FY
1976
TO
Positions
30
30
28.8 1977 FY 30 is. FORD
Average employment
15.0
28.8
Personnel compensation
$ 322
$ 161
$
645
Personnel benefits
32
16
63
Travel
45
22
90
Transportation
1
0
1
Rent, communications, & utilities
55
27
110
Printing & reproduction
20
10
40
Other services
270
135
540
Supplies & materials
10
2
6
Equipment
25
2
5
TOTAL
$
780
$ 375
$ 1,500
Note: For comparability purposes, the personnel compensation figures do not
reflect the increased salary rates effective on October 12, 1975. The pay
increase needs for this Office are included in the pay raise amounts
recommended by OMB.
Background
The concept of a public counsel is not new at the Commission. As early as
1903, the Commission used a public counsel in the interest of fully developing
the issues in its investigations. The most celebrated use of a public counsel was
in 1914 when the Commission contracted with Louis Brandeis to serve as special
counsel in the so-called Five Percent Case, 31 ICC 351 (1914), to insure a complete
record in that case. No serious consideration was given to institutionalizing this
concept on a full-time basis until the period from 1961 through 1964 when the
Commission unsuccessfully sought funds in its annual budget to establish an economic
counsel. The concept was revived in 1973, when the Commission appointed a special
projects counsel to represent the public in Ex Parte No. 270, Investigation of the
Railroad Freight Rate Structure, and related proceedings under arrangements
similar to those with Justice Brandeis. The idea of a public counsel was extended
further in 1974 when Congress established an Office of the Public Counsel in the
Commission's Rail Services Planning Office (RSPO) as part of the Regional Rail Re-
organization Act of 1973 to assist the public in the development of a plan to re-
structure the railroads in the Northeast.
In July, 1975, President Ford met with the heads of a number of agencies
calling on them to effect improvements in their jurisdictional areas. One of the four
specific areas the President mentioned in terms of improvement was better re-
sponsiveness to the needs of consumers. Establishment of the Office of Public
Counsel would represent an important step in the Commission's efforts to comply with
the desires of the President. Congress has also demonstrated considerable interest
- 2
and support. The Subcommittee on Surface Transportation of the Senate Committee
on Commerce has been considering the possibility of providing for establishment of a
Public Counsel within the Commission as part of the "Rail Services Act of 1975"
(S. 2265). On November 5, 1975, the House adopted an amendment to H. R. 9802,
"The Railroad Revitalization and Regulatory Reform Act of 1975," which provides for
the establishment of an Office of Public Counsel within the Commission within 60 days
of enactment. Finally, within the Commission itself, a Blue Ribbon Panel of highly
qualified staff members constituted to recommend internal regulatory improvements
independently proposed that the Public Counsel functions be established on a permanent
basis. After additional study and deliberation, a majority of the Commission, on
October 30, 1975, voted to approve the creation of an Office of Public Counsel.
In recent years, a great deal of skepticism has developed regarding the
Government's concern for the protection of the public interest. While reasonable
people can debate the degree of this concern, there is no denying that all agencies of
the Federal Government can benefit from a reexamination of their performance in this
area. Clearly, the President and Members of Congress believe the time has come to
reemphasize the need for Federal agencies to be more aware of the public's needs in
the performance of their functions.
The Commission has always recognized and been sensitive to its responsibility
to protect the public interest. It was created for this purpose in 1887 and believes it
to be its prime function today. But the recent successful experience with the public
counsel approach to insure a full record in Ex Parte No. 270 and related proceedings
and to assist the public in developing a plan for the restructuring of the railroads in
the Northeast has shown that a strong system can be made even stronger.
-3 -
In order to respond effectively to the direction provided by the President,
Congress and the public itself, the Commission is requesting that additional resources
be provided to fund its operations in Fiscal Year 1976, the transition quarter and
Fiscal Year 1977 for this specific purpose.
Staffing Requirements - The Public Counsel has the discretion to participate as
a party or to intervene in any adjudicative or rulemaking proceeding before the Commission
where, in the judgment of the Public Counsel, its input may be of assistance to the
Commission in determining the public interest. The Commission on its own initiative
can also direct the Office to participate as a party. In addition, the Public Counsel
can petition the Commission to institute a proceeding at such times and in such manner
as is appropriate under the Commission's rules. The Office is afforded all the rights
and is bound by all the obligations applicable to other parties and their counsel.
As a participant, the Public Counsel is responsible for assisting in the develop-
ment of the record by assuring that it contains all relevant and material information
needed for the Commission to reach an informed result consistent with the public interest.
In this respect, the term public interest is broadly defined to include the interests of
carriers, shippers, labor, consumers and the public in general. It embraces the full
social, economic and governmental impact of Commission deliberations. Participation by
Public Counsel would include, but not be limited to, consideration of such issues as
adequate common carrier services at reasonable and compensatory prices, effective
competition, environmental and energy considerations, employee protection in merger
proceedings, and the rational allocation of transportation resources.
- 4 -
FORD LIBRARY &
To fulfill its responsibilities, the Office would: (1) present, subpoena,
examine and cross-examine witnesses and introduce other documentary evidence;
(2) negotiate and enter into stipulations regarding procedures and evidence; (3) de-
lineate, develop and refine issues at various stages of a proceeding, including a pre-
hearing conference; (4) facilitate the handling of procedural and other matters on pro-
ceedings; and, (5) take such other actions as a party consistent with the public interest
and within the authority and jurisdiction of the Commission.
The Public Counsel will also provide assistance to those lacking the resources
or expertise to develop and present their position on an issue. Those benefitting from
such assistance could include individuals, consumer groups and local governments. The
Public Counsel would also consult and cooperate with others representing the public in
particular proceedings.
The Commission has been emphasizing the use of rulemaking proceedings as
a regulatory device and plans to continue to do so in the future. As a result, a large
number of these investigations are now in progress and a significant number of new pro-
ceedings can be expected to be instituted in the future. Since these proceedings invariably
encompass critical transportation issues involving Commission regulations and carrier
rates, practices, finance and operating rights, there is an extremely wide area of
potential workload for the Public Counsel. In order to accomplish its objectives, a staff
of sufficient size with broad-based skills must be provided to assure the capacity to enter
any proceeding.
In view of the potentially broad scope of Public Counsel activities, the Commission
believes that 30 additional positions will be needed to fulfill the minimum needs for the
- 5 -
Public Counsel. The staff would include personnel with the skills necessary to
research and develop data (investigators, auditors, tariff specialists); personnel
experienced in data analysis (economists, cost and financial analysts); attorneys
to participate in the proceedings and provide consumer assistance; and the necessary
clerical support. In addition, sufficient resources must be provided to enable the
Public Counsel to contract with experts, consultants, attorneys and others to augment
the staff when necessary. To provide further support, the Commission has authorized
the Chairman to provide assistance and services from other Commission organizations
to this Office upon request, having due regard to their existing workload.
The Commission believes that the staffing level of the new Office can best be
determined by relating it to two similar, though not identical, existing operations;
namely, the Special Projects Staff and the Section of the Public Counsel in the Rail
Services Planning Office (RSPO). These two organizations perform somewhat com -
parable functions with respect to Ex Parte Nos. 270 and 271 and the restructuring of
the railroads in the Northeast, respectively. However, no transfer of positions from
the Rail Services Planning Office is contemplated to satisfy position needs in the new
Office. While it is possible that certain staff members could be reassigned if RSPO
is phased out, the position requirements in this estimate are in addition to those
already included in the Commission's original request for Fiscal Years 1976 and 1977.
Similarly, the resource needs of the Special Projects Staff, which is associated with
Ex Parte Nos. 270 and 271, are clearly established through Fiscal Year 1977. There
is no possibility of diverting positions from this Staff into the new organization nor of
combining the organizations at this time.
TORO LIBRAGE
- 6 -
Other Objects
Travel - Because of the nationwide scope of this program, the travel needs
are relatively high for a staff of this size. Estimates are based upon the require-
ment that the Office participate in proceedings in all parts of the country and visit
the specific geographical area affected to inspect the conditions and to develop and
compile data for evidence.
Other Services - These estimates reflect the need to use experts, consultants,
and attorneys to properly develop and present the evidence in Commission proceedings
in the public's interest. It is envisioned that extensive contract support of this
nature will be needed in such diverse areas as data gathering, environmental assess-
ments, economic analyses, and depreciation and property valuations. Moreover, ex-
perience with Ex Parte Nos. 270 and 271 has shown that heavy computer support will
be required in compiling and analyzing the vast amounts of data collected. The
estimates for other services include the necessary resources for outside contract
assistance in the ADP area.
Other Costs - Estimates for other requirements such as space rental, tele-
phones, mail, printing, supplies and equipment have been estimated at levels normally
associated with new organizations.
- 7 -
Civil Aeronautics
Board
CIVIL AERONAUTICS BOARD
Comments
Appeal at issue is 58 positions and
$600,000.
Agency requested an increase of 78 posi-
tions to carry out two basic objectives
related to facilitating a faster and more
effective regulatory response - expedite
decisionmaking and regulatory reform; and
keep abreast of a materially increasing work-
load as mandated by the Federal Aviation Act.
OMB recommendation would increase employment
by 20 positions compared to 1976 levels and
provide appropriate increased budget author-
ity. Agency appeals for its original re-
quest on the grounds that management
efficiencies are exhausted and the benefits
of reforms presently initiated will be lost
without additional personnel. (see
attached background paper.)
Budget
Full-time
authority
Outlays
1/
permanent
(In thousands of dollars)
employment
1975 actual
85,204
80,884
720
1976 current estimate
80,451
91,581
758
1976 OMB employment ceiling
XXX
XXX
758
Transition quarter current
estimate
20,066
23,057
XXX
1977 agency request
102,300
95,200
836
1977 OMB recommendation
101,400
94,300
778
Effect of OMB recommendation
on agency request
-900
-900
-58
1978 estimate
101,400
94,300
778
1/
Agency totals include subsidy payments to air carriers over which
there is little control. (1976 budget authority $60,695 thousand; outlays
$71,883 thousand; 1977 budget authority $80,007 thousand; outlays $72,967
CIVIL AERONAUTICS BOARD
Background Paper
Agency Appeal
OMB recommendation of 20 additional positions over 1976 is unacceptable to the agency for the
following reasons:
The present investment of resources for regulatory reform (e.g., experimental deregu-
lation; advisory commission on procedural reform; and reevaluation of service to small
communities and the criteria for subsidy payments) cannot be taken advantage of with
the present personnel level. Orderly implementation of reform in compliance with the
administrative process will require 78 additional positions in 1977.
Extreme fiscal restraint in prior years has exhausted management prerogatives. The
budget request therefore reflects a careful internal analysis of manpower needs and
incorporates the President's desire to hold the line on government spending.
Orderly development of a systematic approach to improving our airlines' regulatory
system will require additional resources for transition.
Should the Board's request for full restoration not be granted, "the Board will have
no choice but to sacrifice its regulatory reform and expedited decision-making program
on the altar of budgetary stringency because (the Board) will be limited in carrying
out (its) basic responsibilities as mandated by the Federal Aviation Act."
OMB Recommendation
Given that decisions have been made to permit increased employment in other independent
regulatory agencies, OMB recommends an increase of 20 positions for 1977. The recommendation
also includes the reprogramming of 12 positions from existing support functions to priority
reform activities based on the following considerations:
2
CAB will have completed the bulk of its internal reform planning in 1976 with 1975 employment
levels. Since the continuing resolution under which the CAB is presently funded has to date
effectively precluded hiring additional personnel authorized for 1976, these positions will
be available to the CAB to begin implementation of reform plans.
The addition of 20 positions in 1977 is necessary to implement reform initiatives through the
administrative process. The Chairman's use of task force management will maximize the
effectiveness of these resources.
The 1977 recommendation provides $300 thousand for outside contracts dedicated to regulatory
reform.
On balance, OMB has concluded that the addition of 20 positions for 1977 combined with pro-
ductivity improvements and management initiatives is sufficient to continue and accelerate
reform and process mandated caseload.
REVOLUTION
CIVIL AERONAUTICS BOARD
WASHINGTON, D.C. 20428
AMERICAN
BICENTENNIAL
STATES
November 14, 1975
1776-1976
IN REPLY REFER TO: B-1-17
Honorable James T. Lynn
Director
The Office of Management and Budget
Washington, D.C. 20503
Dear Mr. Lynn:
This appeal letter is in response to advice received by telephone
from your staff on November 10, 1975, allowing $20,662,000, including
pay raise costs, for the Civil Aeronautics Board's Salaries and Expenses
and $80,007,000 for Payments to Air Carriers budget authority. The
amount for Salaries and Expenses provides for no new positions in
fiscal 1977 and, moreover, is insufficient to finance the Board's
staffing at the current year level. The amount for Payments to Air
Carriers is what we requested and should meet our fiscal 1977 needs.
We are aware of President Ford's desire to hold the line on
Government spending and we share that goal. However, our budget
request already incorporated this philosophy, and your Salaries and
Expense allowance falls $499,000 short of covering the increased costs
associated with maintaining our current authorized staff level of 758
positions. If the inadequate OMB allowance stands, we will be unable to
meet essential and uncontrollable personnel compensation and benefits,
and other cost increases such as penalty mail, GSA standard level user
charges for office space, GPO estimates for supplies and materials, ADP
rental and maintenance, and mandatory increases in health benefits.
Without a restoration of our original request, we will have to reduce
about 25 man-years below current levels. Also, we do not believe we
will be able to fund necessary analytical contract work from academic
and private sectors at the $300,000 level to pursue an active and
flexible program for designing and testing needed regulatory and
procedural reform proposals.
Also, the currently proposed funding level fails to account for
the historic facts that for fiscal 1975, the Board did not request any
additional positions. Increased workload and special projects were
handled by the existing staff. Management actions such as streamlined
work procedures, ADP applications, and internal shifts of manpower
enabled the Board to perform Congressionally assigned tasks. However,
extreme fiscal restraint in prior years has exhausted many of the
management prerogatives that can result in significant savings for
the American taxpayer.
FORD
-2-
The times have changed and we need people to do the job that needs
to be done during a new economic era. The development of new experimental
reform programs, the analysis that could lead to administrative improve-
ments in how we do the public's business, and the creation of responsible,
innovative public policy all take human resources. As one who has
served in two major departments, you are well aware of the tremendous
difficulties which exist in bringing about change. This is especially
true when these vitally needed changes must be undertaken while we sustain
our regular programs, as we are required to do by Congressional mandate.
Even if our currently authorized 758 positions were sufficient to carry
out our regular business, which is not the case--falling 78 positions
short of the Board's needs--our computations show that to finance
those 758 positions, fully meet the increased costs of doing business
in fiscal 1977, and contract for outside analytical work, the Board
needs $21,161,000, or $499,000 more than your staff has allowed (see
enclosed tables).
The results of a careful internal analysis of our manpower needs,
which I inaugurated when I became Chairman six and one-half months ago,
required me to reallocate the 40 new positions we had received for
fiscal 1976 to our five basic regulatory programs. This was necessary
to achieve an acceleration in the pace of our decision-making, an
undertaking clearly consistent with President Ford's objectives, and to
provide an increased analytical capability in the operating bureaus.
This reallocation seriously cut back our enforcement effort, and 21
of the 78 new positions would go toward that essential effort.
In preparing our fiscal 1977 budget submission, the Board committed
itself further to carrying out two basic objectives, both of which
revolve around a faster, more effective regulatory response, and both
of which are in concert with the Administration's views on improving
regulatory performance. These are: (1) expedited decision-making and
regulatory reform; and (2) keeping pace with a materially increasing
current and anticipated workload as mandated by the Federal Aviation Act,
as amended.
The detrimental effects to the accomplishment of these goals
resulting from the OMB disallowances are staggering. Twenty-nine
of the 78 new positions requested would actually be involved in this
effort (see enclosure). Not only will our new initiatives regarding
regulatory reform be stillborn, but the regulatory lag condemned by
President Ford will, in fact, increase. We have just begun setting
-3-
the stage for expediting the Board's increasing workload by re-allocating
manpower among the various Board programs, initiating a series of
studies, and establishing an advisory committee to review our administra-
tive practices. The Board, in fiscal 1977, will stand on the threshold
of reaping the dividends from this carefully-thought-through investment.
We will not be able to take advantage of this investment with the cut
to our fiscal 1977 estimates.
If the OMB cuts are permitted to become the figures in the President's
budget, the Board's only course of action will be to absorb expenses
beyond our control to the point where we will have to reduce our current
staffing level by 25 man-years. In effect, the OMB action substantially
cancels out the Congressionally approved increase of 40 new positions
for fiscal 1976.
When I undertook the job as Chairman of the CAB, I considered this
my opportunity to design a new forward-looking experimental program
crafted to surface systematically the right questions and, hopefully,
effective solutions to the problem of striking the proper balance in the
relationship between regulators, the industries regulated, and the
public which we all serve. This is not a self-proclaimed crusade, but
is directly responsive to the expressed views of the Administration and
the Congress.
Apparently, those wielding the budgetary meat-axe have never
undertaken the job of trying to effect responsible modernization in
a regulatory agency at a time when the vital industry we are charged
with regulating is undergoing severe economic hardships.
I should also like to underscore the simple reality that transi-
tions are tough. Our estimates for fiscal 1977 do not reflect the impact
of the Administration's legislative regulatory reform proposal which,
if enacted, we believe would require additional resources, as transitions
always do.
Hopefully, your broad personal experience at Housing and Urban
Development and the Department of Commerce has given you an expanded
perspective so that you can appreciate the problems we face. However,
should you support the unconscionable decision of your staff, we would
appreciate a detailed explanation, in writing, as to where your staff
believes the cuts should be made and a rationale for OMB's failure to
agree with the increases requested. In addition, we are obliged to
advise you that, if asked, we would provide all pertinent data of the
budget process to our appropriation subcommittees.
FORD
-4-
Moreover, these unconscionable cuts so undermine the program which
we have begun, a program which is so consistent with the President's
overall objectives, that, if there is no restoration of our original
request, I request the opportunity to present our case to you and
Paul O'Neill personally, and, if necessary, to the President himself.
We are enclosing an analysis of the devastating effect this
disallowance would have on our forward-looking program for expedited
decision-making and regulatory reform. We apologize for not giving
you greater detail, but this is about the best we can do in the short
time we were given to prepare our appeal.
In summary, the Board respectfully requests that you give further
consideration to our 1977 budget requirements and restore the full
amount of our requests for a total of 836 positions and $22,396,000
for Salaries and Expenses, including pay raise costs. Otherwise, the
Board will have no choice but to sacrifice its regulatory reform and
expedited decision-making program on the altar of budgetary stringency
because we will be limited in carrying out our basic responsibilities as
mandated by the Federal Aviation Act.
Unfortunately, the disallowance will prohibit the orderly
development of a systematic approach to improving our regulatory system
as called for by President Ford at his July 10th meeting with the
Commissioners of the independent regulatory agencies. I would deeply
regret such a result, but your disallowances, coupled with our existing
legislative responsibilities gives us no alternative.
We would truly lament this result not only for ourselves, but for
the President's program, of which we consider our activities a vital
part, and ultimately for the American public who deserve our best efforts.
For the lack of an adequate budget and 78 new positions, these efforts
will be strangled.
Sincerel
E.
Rabson
Chairman
John E. Robson
Enclosures
193819 & ECRO
CIVIL AERONAUTICS BOARD
Salaries and Expenses Appropriation
CAB Estimate Compared with OMB Allowance
Fiscal Year 1977 Budget
(in thousands of dollars)
CAB
OMB
Estimate
Allowance
Disallowance
FY 1976
Appropriation requested
19,295
19,295
-
Pay raise, effective 10/1/75
600
600
-
19,895
19,895
-
FY 1977 Increases
Increase in costs associated
with current staff
1,066
567
499
Annualization of pay raise
for current staff
200
200
-
1,266
767
499
Required to fund current staff
21,161
20,662
499
Increase for 78 new positions
1,195
I
1,195
Pay raise for new positions
40
-
40
1,235
-
1,235
1977 Appropriation
22,396
20,662
1,734
CIVIL AERONAUTICS BOARD
Summary of 1977 Budget Increases
(in thousands)
1976 appropriation estimate, excluding pay raise costs
$19,295
Increases requested
Associated with current staff:
Within-grade salary advancements
$
124
One compensable day (262 in 1976; 261 in 1977)
(50)
Annualization of 40 new positions in 1976
133
Personnel injury compensation costs
16
Change in lapse rates
102
Awards
3
Travel and transportation of persons
91
Telephone fixed charges
26
FTS rates
27
Penalty mail
37
GSA SLUC rates
296
ADP equipment rental
26
Office machine rental
18
Printing volumes of Board decision
43
Nonrecurring printing
(4)
Repairs and alterations
16
ADP outside contract work
64
Tuition and related fees
6
Reporting services
9
Miscellaneous other services
3
Duplicating supplies
15
ADP and other supplies
6
Camera, processor, phototypesetter and OCR
reader for production of negatives, etc
for bound volumes
28
Word processing equipment to expedite typing
workload
32
Addressing equipment replacement
14
Facsimile equipment
14
Microfilm equipment replacement
6
Nonrecurring equipment purchases
(34)
Subtotal
1,066
Increase for 78 new positions (58.5 man-years)
1,195 a/
Total increase
2,261
1977 appropriation request (excluding pay raise costs)
$21,556
FORD
-2-
Footnote:
a/Cost of 78 new positions in 1977:
Personnel compensation and benefits
...
$ 810
Travel and transportation of persons
92
Office space rental, GSA/SLUC
54
Communication expense
10
Building repairs and alterations
138
Supplies and materials
15
Office equipment
76
Total
$1,195
CIVIL AERONAUTICS BOARD
Analysis of New Position Allocations
to the Several Elements of the Board's
Expedited Decision Making and Regulatory Reform Program
The Board's program for expedited decision making and regulatory reform
consists of eight elements, all of which have been initiated and require
the infusion of necessary manpwer and dollars for implementation. Need.ess
to say, if the OMB disallowance of all new positions stands, none of these
objectives will be fully realized thereby frustrating the only systematic
approach to implementing the expressed views of the President and the Congress
on improving regulatory performance.
Objectives
Positions
1. Modernize Board procedures to maximize its own capacity
to be responsive and flexible in the face of changing
conditions. In this regard, the Board established the
CAB Advisory Committee on Procedural Reforms, composed
of a diverse group of individuals from outside
Government. Working with the Board's staff, the Committee
will analyze CAB administrative procedures and make
recommendations to the Board for appropriate reforms.
Also, the Board recently has taken action to analyze
its docket workflow in an effort to speed up decision
making under existing procedures
5
2. Provide the laboratory in which to experiment with
different regulatory concepts and stimulate innovation.
The Board has initiated action on this front by pro-
posing a program of experimentation with free entry
and exit into selected aviation markets and more
freedom for carriers to set fares. To assure a full
discussion of this controversial approach, the Board
docketed the experimental program, docket number 28048,
and asked for comments from all interested parties
3
3. Test a new charter concept--one-stop charters--which
could greatly expand the availability of low-cost air
transportation to the public. The process of analysis,
testing of regulatory policies, and experimentation
represented by this undertaking, as well as others,
will absorb much of the Board's thought and energies
during the next two years
3
-2-
Objectives
Positions
4. Participate in the Government-wide review of
internal aviation policy.
3
5. Reevaluate the Board's service to small communities
program in light of a combination of factors, including
recent inflationary trends, the escalation of fuel costs,
and the phaseout of the older piston aircraft used to
serve many of the smaller communities. A complicating
factor is that further increases in automobile fuel
prices will undoubtedly act as a deterrent of private
transportation and may well result in civic insistence
that air service by certificated carriers be retained
or that means are provided to assure adequate commuter
carrier service. Judgments in these matters will become
increasingly difficult. Furthermore, as a result of an
adverse court decision, the experimental "flow-through"
subsidy plan of the Board, initiated in 1975 with the
Frontier/Air Midwest case, has been terminated. The
Board will therefore be reviewing the entire small
community service question in the light of this action
and the above factors.
5
6. Reinforce the Board's research, analytical and
informational capabilities in order to assist the
Board in developing its policies in light of a new
economic environment; Congressional and Executive
reviews of the organization, procedures, functions
and results of the regulatory processes; and the
Board's own series of experiments to assess the
operation of the U.S. domestic air transport system
under limited or no regulatory constraints. This new
look at regulatory objectives will entail, among other
things, comprehensive and detailed analysis on a
continuous basis of changing conditions affecting
air transportation.
4
7. Participate fully and constructively in the current
debate over the future of aviation regulatory policy
by encouraging the testing of regulatory precepts
against the demands of a future and different
economic climate and by serving as a catalyst and
provide a forum to examine regulatory issues.
2
-3-
Objectives
Positions
8. Maintain a responsible and objective sense of self-
examination. Along these lines, the Board, during
fiscal 1975, initiated and funded out of its existing
budget, a special independent staff study to appraise
the effectiveness of the current economic regulatory
regime and consider alternatives, some of which
involve statutory changes. Also, the Board plans
to draw upon various outside sources, in conjunction
with its staff expertise, for the very best specialized
knowledge, experience, and judgments in order to assist
in analyzing current policies, considering proposals
for policy changes and developing the new regulatory
policies which are found necessary to cope successfully
over the long run with the realities of a different
economic environment.
4
Total positions
29
Analysis of Cost of 29 New Positions
Personnel compensation and benefits
$411,000
Travel and transportation of persons
34,000
Office space rental, GSA/SLUC
20,000
Communications expenses
4,000
Building repairs and alterations
51,000
Supplies and materials
6,000
Office equipment
28,000
Total
$554,000
Federal Trade
Commission
FEDERAL TRADE COMMISSION
Comments
Disagreement between agency and OMB involves
$6.7 M and 128 new positions. Assuming very
tight standards for regulatory agencies,
initial OMB mark disallowed any staff
increase (agency had requested 158), allowed
only $3.8 M above 1976 level (primarily for
petroleum industry litigation), and required
agency to reprogram to meet other high
priority antitrust needs. Agency submitted
appeal after learning of increases for other
regulatorys. In partial response to appeal,
OMB now recommends 30 new positions and total
increase of $5.2 M. Agency still maintains
nothing less than original request will meet
your antitrust priorities and Congress'
mandates on consumer protection. Issue
paper attached.
Budget
Full-time
Authority
Outlays
permanent
(In thousands of dollars)
employment
1975 actual
38,983
38,732
1,569
1976 current estimate
45,927
45,775
1,634
1976 OMB employment ceiling
XXX
XXX
1,634
Transition quarter current
estimate
12,000
12,300
XXX
1977 agency request
57,837
56,200
1,792
1977 OMB recommendation
51,143
50,966
1,664
Effect of OMB recommendation
on agency request
-6,694
-5,234
-128
1978 estimate
50,424
50,075
1,664
Issue raper
Federal Trade Commission
1977 Budget
Statement of Issue
What should be the funding and staffing levels for the Federal Trade Commission?
Background
There is $6.7 million and 128 new positions still at issue between the Federal Trade Commission and
OMB. The Commission insists its initial request is the minimum needed to meet its responsibilities. We
have responded to the agency's appeal by adding 30 new positions and $1.4 million to OMB's initial mark,
but we cannot agree that further increases are justified.
Agency Request
The agency requests $57.8 million and 158 new positions, a funding increase of 27 percent and a staff
increase of 10 percent above 1976. New resources would be targeted primarily at antitrust and maintenance
of competition activities with the largest component of the increase ($3.6 million) dedicated to prosecution
of the Exxon case. Other new resources are requested for forty-nine of the seventy-one programmatic and
support activities of the agency.
OMB's Initial Recommendation
OMB's initial mark permitted no new personnel, allowed an increase (from $2.4 million in 1976 to $6 million
in 1977) for the Exxon case, but required the agency to reprogram to provide for other high priority antitrust
programs. Significant implications of the initial OMB mark were:
Deferral of plans to consolidate and expand office space;
Deferral of all new equipment acquisition for one year;
Maintenance of travel at 1976 levels;
No increase for a program which funds public participation in rulemaking activities; and
A net reduction in consumer protection activities. OMB believes the latter could be
achieved by further reductions in low priority programs and by stretching-out the schedule
for rulemaking authorized by the Magnuson-Moss Act.
The Commission appealed every OMB reduction on the grounds that cost/benefit analysis and the Commission's
own review of the budget on a programmatic basis demonstrated nothing could be cut without jeopardizing the
agency's ability to meet your priorities on antitrust and congressional mandates on consumer protection. The
Commission was especially concerned that without an increase in staff, consumer protection activities would
be severely undermined because of the need to shift resources into antitrust programs.
Action Following Appeal
Review of the appeal, coupled with recognition that the Federal Trade Commission was initially subjected
to tighter constraints than many regulatory agencies, leads us to modify our recommendation to include thirty
new staff for antitrust activities, thereby relieving some of the pressure on FTC's Bureau of Consumer
Protection. Under this approach, half of the Bureau of Competition's new staffing requirements can be filled
with new employees and only half need come from the Bureau of Competition.
OMB Recommendation
We recommend 1,664 full-time permanent positions and $51,143,000 in budget authority for fiscal year
1977.
FEDERAL TRADE COMMISSION
WASHINGTON. D.C. 20580
OFFICE OF
THE CHAIRMAN
November 17, 1975
The President
The White House
Washington, D.C.
Dear Mr. President:
The Federal Trade Commission hereby appeals from the
initial allowance provided by the staff of the Office of Management
and Budget for our fiscal year 1977 appropriation. For its 1977
appropriation, the Commission requested an increase of 158 positions
and $11,910,000. The requested new positions and the bulk
of additional operating funds were designated for the Commission's
antitrust enforcement activities. The initial allowance recommended
by OMB would provide the Commission with no new positions
and only a $3.8 million increase in operating expenses.
The result of the initial OMB allowance is to force the
Commission into making a choice between reducing its antitrust
initiatives or reducing its consumer protection initiatives. OMB
suggests the latter alternative, recommending that the Commission
transfer 70 positions from its consumer protection mission to
its competition mission.
The Commission believes either alternative would have
a detrimental effect on the Commission's responsibilities to help
preserve an honest and vigorous free market economy.
In recent years, the Commission has played an increasingly
active role in prosecuting private restraints on competition.
In the current fiscal year and with increasing emphasis in its
proposed 1977 budget, the Commission has begun to examine
and take action against government restraints on the free market
system. To force the Commission to cut back on its antitrust
initiatives would appear to be contrary to your publicly held
commitment to strengthen antitrust enforcement and to reexamine
the anticompetitive effect of government regulation. As you have
said:
"
we must maintain an antitrust policy which validates
FORD LIBEARY
The President
-2-
our commitment to competitive markets. If we would reduce
government regulations of business, we must make certain and
positive that our antitrust laws are vigorously enforced. Competition,
when freed of government regulation and supported by antitrust
laws, is a driving force of our economy. It will drive costs
down to the minimun and assure prices based on these legitimate
costs."
Although the Commission requested no new positions for
its consumer protection mission, it is committed to fulfilling its
congressional responsibilities to challenge unfair and deceptive
practices, particularly those which inhibit or restrict consumer
access to a free market. With the passage of the Magnuson-Moss
Warranty-Federal Trade Commission Improvement Act of 1975,
the Commission has been given enhanced authority to achieve
this; and the Congress and the public expect vigorous Commission
implementation of these new powers. Since you signed into law
the Magnuson-Moss Warranty-Federal Trade Commission Improvement
Act, the Commission has issued 10 proposed trade regulation
rules, including rules which would terminate private and government
restrictions on price competition.
In fiscal 1977, the Commission intends to investigate additional
areas of anticompetitive restraints such as occupational licensing
laws. If the Commission were forced to reduce these initiatives
in order to shift resources to antitrust enforcement, we believe
it would be inconsistent with the Commission's responsibility
to promote an open, fair and honest market economy.
The Commission's original budget request was arrived
at after careful cost/benefit analysis by the Commission and we
believe it is the minimum necessary to support a selected group
of high priority cost/effective activities designed to:
The President
-3-
--
maintain and expand vigorous prosecution of private
restraints on competition.
--
reexamine the costs and benefits of regulation and
take action as appropriate against wasteful and anticom-
petitive practices in all levels of government.
--
make full use of the new powers conferred by the
Magnuson-Moss Warranty-FTC Improvement Act of
1975 to eliminate unfair and deceptive trade practices.
Accordingly, we ask restoration of the 158 positions and the
full $11,910,000 originally requested by the Commission.
By direction of the Commission.
LaraKeyman Lewis A. Engman
Chairman
Securities and
Exchange
Commission
SECURITIES AND EXCHANGE COMMISSION
Comments
The Commission originally requested funds for 132 more
man-years in a 1976 supplemental appropriation and an
additional 252 man-years in 1977, primarily to carry
out its expanded responsibilities under the Securities
Act Amendments of 1975. Subsequently, the Commission
Chairman has agreed that the OMB recommended levels
are adequate to undertake the new responsibilities in
1977; and he can in good conscience fully support the
lower level before the Congress. Furthermore, the
Chairman agrees to reduce the 1978 employment level
below the 1976 mark through better management.
GERALD
Budget
Full-time
authority
Outlays
permanent
(In thousands of dollars) employment
1975 actual
44,427
44,387
1,935
1976 current estimate
47,885
49,325
2,023
1976 OMB employment ceiling
XXXX
XXXX
1,960
Transition quarter
ceiling estimate
12,675
11,785
XXXX
1977 agency request
55,522
55,522
2,370
1977 OMB recommendation
50,148
50,148
2,080
Effect of OMB recommendation
on agency request
-5,374
-5,374
-290
1978 estimate
48,121
48,121
1,987
Federal
Communications
Commission
FEDERAL COMMUNICATIONS COMMISSION (FCC)
Comments
The agency requested increases to address consid-
erable workload increases resulting from consumer
demand for new communications services and expan-
sion of existing ones. In addition it sought new
staff to greatly expand field monitoring and en-
forcement, reduce present backlogs, implement
machine-assisted processing in several areas, and
reorganize to address major policy questions before
rulemaking becomes necessary. The OMB mark recom-
mends some new resources which will speed
implementation of cost-effective data processing
support, and which will yield productivity gains
in application processing, complaints and com-
pliance activity, and field operations. An
FY 1976 supplemental, now pending in Congress,
already adds personnel to evaluate the
Commission's overburdened regulatory approach to
GERAL FORD
common carrier issues. The FCC plans to continue
to reprogram staff for the remainder of its
regulatory reform program which is yielding some
relief for regulated business and for FCC time
and workload pressures. OMB expects a thorough
plan for additional regulatory reform efforts by
the end of the year. The agency does not plan to
appeal the OMB mark.
Budget
Full-time
authority
Outlays
permanent
(In thousands of dollars)
employment
1975 actual
46,900
47,964
1,968
1976 current estimate (inc.
supplemental)
49,813
49,917
2,100
Transition Quarter current
estimate (inc. supple.)
12,436
12,536
XXX
1977 agency request
58,334
57,706
2,405
1977 OMB recommendation
52,383
53,000
2,168
Effect of OMB recommendation
on agency request
-5,951
-4,706
-237
1978 estimate
52,383
53,000
2,168
Federal
Maritime
Commission
FEDERAL MARITIME COMMISSION
Comments
Agency requests the personnel increases to
conduct studies to conform with requirements
of the National Environmental Policy Act of
1969 and for improving its regulatory effort,
2020 LIBRARY & 028470
principally in reference to handling of ocean
tariff filings, on-site audits of ocean
carriers and shipping malpractice investiga-
tions. OMB mark denies all personnel
increases because: (1) personnel increases
are not critical to FMC operations and new
responsibilities can be absorbed within its
existing personnel base; and (2) the Admin-
istration is currently studying whether FMC
legislative authorities should be modified,
and therefore it would be unwise to increase
FMC staffing at this time. FMC has not
appealed the OMB mark.
Budget
Full-time
authority
Outlays
permanent
(In thousands of dollars)
employment
1975 actual
7,400
7,251
305
1976 current estimate
7,840
7,852
316
1976 OMB employment ceiling
XXXX
XXXX
316
Transition quarter current
estimate
1,960
1,930
XXX
1977 agency request
9,026
8,930
375
1977 OMB recommendation
7,990
7,950
316
Effect of OMB recommendation
on agency request
-1,036
-980
-59
1978 estimate
7,990
7,990
316
THE PRESIDENT HAS SEEM
FEA Compliance Audits vs. IRS Tax Audits
of Crude Oil Producers
% of Firms Audited
Annual Production Level
% of Industry Production
Compliance Wrap-up Program
(million barrels)
No. of Firms
% of Total
Cumulative
FEA Req.
OMB Recom.
IRS Annual
10 plus
31
77%
77%
100%
100%
82%
5-10
14
4
81
79
100
71
1-5
97
7
88
79
100
45
0.5-1
114
2
90
79
100
49
under 0.5
14,644
10
100
79
17
10
November 26, 1975