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The original documents are located in Box 10, folder "FY 1977 - 12/75, Final Budget
Decisions" 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States of America his copyrights in all of his unpublished writings in National Archives collections.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
THE PRESIDENT HAS SEEN
OF THE
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF MANAGEMENT AND BUDGET
on
STATES
WASHINGTON, D.C. 20503
DEC 18 1975
INFORMATION
HR4
MEMORANDUM FOR:
THE PRESIDENT
From
:
James . Lynn
Subject
:
Policy and Economic Assumptions for the
1977 Budget
We are in the final countdown for the 1977 Budget. As you
know, the official forecast regarding economic activity in
1976 and 1977 has a profound impact on the budget outlay and
receipts totals. In order to allow the agencies sufficient
time to calculate the impact of economic activity on their
entitlement programs, we have already begun to prepare the
forecast.
Just as the economy has a large impact on the budget, budget
and other policies have an important reverberating impact on
the economy. Consequently, this week the Executive Committee
of the EPB had to provide guidance to our forecasters as to
what our policy stance would be on January 19. This is not
intended to lock us into a set of policies, because last
minute changes are possible. However, to the extent that
good guesses can be made now, a more professional job can be
done on the forecast and budget estimates, and errors are
less likely.
Policies in 1976 and 1977
Tax Policies
182ALF FORD
The initial forecast will assume:
(i)
1975 withholding rates will be continued to
June 30, 1976.
2
(ii) On July 1, 1976, your proposal for a deeper tax
cut will go into effect. The deeper cut will
not be made retroactive to January 1. This
implies that individuals and corporations will
have to compute their 1976 liabilities on the
basis of a set of tax rates that is half way
between 1975 law and your proposal. Your pro-
posal will be fully in effect in 1977. If your
deeper tax cut went into effect on July 1 and
was made retroactive to January 1, we would face
the following unpleasant choice. Either we would
have to cut withholding sufficiently to give back
the whole cut in the last six months of the year,
thus facing a rise in withholding in 1977 that
could only be obviated by yet another tax cut,
or we would have to overwithhold about $4 billion
from individuals which would not be returned until
the spring of 1977. By not making the tax cut
retroactive we avoid this problem and we reduce
the deficit by over $4 billion without a signif-
icant effect on the recovery.
Energy Policy
Because the situation is SO uncertain, we have chosen to
do two forecasts based on two different scenarios.
Scenario I - You sign the Conference Bill - This forecast
assumes that 90 days after enactment you propose a 2 per-
cent price increase to the Congress in addition to the
maximum increase allowed without Congressional approval.
This increase would go into effect about May 1. (The
maximum annual increase allowed without approval is the
increase in the GNP deflator plus 3 percentage points or
10 percent whichever is less.)
In February 1977, when the pricing policy is to be reviewed
by the Congress, it is assumed that you will request a
further 3 percent annual increase on top of that requested
in 1976.
FORD
3
Scenario II - You veto the Conference Bill and the veto
is sustained.
This forecast assumes sudden decontrol; you propose the
windfall profit tax designed by the Senate Finance
Committee last summer; and you propose that the revenues
from this tax be spent on providing equal per capita
rebates to all adults and on special programs for
"hardship cases" such as farmers and independent
refineries. None of the revenues are held back to
provide for greater fuel costs to the Federal and State
and local governments. Excess Federal costs are covered
within your 1977 Budget ceiling of $395 billion.
Long-Run Economic Assumptions for the Period 1978-81.
The law requires four-year projections of budget outlays
and receipts for the period following 1977. The economic
assumptions underlying these projections were published
in the 1976 Budget and again in the Mid-Session Review.
The relevant Table published in the latter is attached
as Tab A. These projections were based on the assumption
that the real growth of the economy would equal 6.5 per-
cent per year from the end of 1976 to the end of 1980.
This year we must provide a projection for 1981. If
the 6.5 percent growth rate is continued, an unemployment
rate of 4.4 percent would result in 1981. The EPB
decided that this was unrealistically low given that
unemployment has averaged 5.2 percent over the last
twenty years.
The EPB unanimously selected the following option. A
growth rate of 6.5 percent would be assumed for the
period from the end of 1977 to the end of 1980. For
1981, a growth rate leading to 4.9 percent unemployment
would be used. This growth rate is 5.0 percent given
our last forecast for 1976 and 1977. If our last
forecast of October 22 remains unchanged - and this is
unlikely - the Budget table that would result is attached
as Tab B. (Data on the insured unemployment rate and the
interest rate assumption would have to be added. These
were not computed for this example.)
Attachments
FORG
Tab A
Tab B
TAB A*
1
ECONOMIC ASSUMPTIONS FOR BUDGET PROJECTIONS
(calendar years; dollar amounts in billions)
Assumed for Purposes of
Budget Projections
Item
1977
1978
1979
1980
Gross national product:
Current dollars:
Amount
$1,891
$2,017
$2,335
$2,586
Percent change
12.6
11.4
10.8
10.8
Constant (1958) dollars:
Amount
$897
$956
$1,018
$1,084
Percent change
6.5
6.5
6.5
6.5
Incomes (current dollars) :
Personal income
$1,515
$1,689
$1,874
$2,078
Wages and salaries
$978
$1,092
$1,211
$1,344
Corporate profits
$173
$193
$214
$237
Prices (percent change) :
GNP deflator:
Year over year
5.7
4.6
4.1
4.0
Fourth quarter over
fourth quarter
5.2
4.3
4.0
4.0
CPI:
Year over year
5.3
4.4
4.0
4.0
December over December
4.8
4.2
4.0
4.0
Unemployment rates (percent) :
Total
7.2
6.5
5.8
5.1
Insured
2
6.1
4.7
4.0
3.2
Federal pay raise, 0 ctober (per-
cent)
6.75
6.50
6.00
5.50
Interest rate, 91-day Treasury
Bills (percent) 3
5.1
5.1
5.0
5.0
*Source: Mid-Session Review of the 1976 Budget, May 30, 1975, Table 14,
page 22.
1
Based on extrapolations using a 6.5% rate of real growth in GNP for
1977-1980.
2 Insured unemployment as a percentage of covered employment; includes
unemployed workers receiving extended benefits.
3 Average rate of new issues within period.
GERALD
B
Economic Assumptions
(Calendar Years: dollar amounts in billions)
Actual
Assumed for Purposes of Budget Estimates
1974
1975
1976
1977
1978
1979
1980
1981
Gross National Product:
Current Dollars:
Amount
1,397
1,477
1,673
1,861
2,087
2,338
2,600
2,844
Percent Change
7.9
5.7
13.3
11.3
12.1
12.0
11.2
9.4
Constant (1958) Dollars:
Amount
821
797
853
895
947
1,009
1,074
1,129
Percent Change
-2.2
-2.9
7.1
4.9
5.8
6.5
6.5
5.0
Incomes (Current Dollars) :
Personal Income
1,150
1,241
1,386
1,533
1,720
1,931
2,154
2,361
Wages & Salaries
751
786
872
970
1,095
1,234
1,380
1,518
Corporate Profits
141
124
169
196
217
238
259
278
Prices (Percent Change) :
GNP Deflator
10.3
8.9
5.8
6.1
6.0
5.2
4.4
4.1
Consumer Price Index
11.0
9.2
6.6
6.1
6.0
5.2
4.4
4.1
Unemployment Rate:
Percent
5.6
8.4
7.5
7.2
6.7
5.9
5.2
4.9
Federal Pay Raise, October:
Percent
5.52
5.00
11.50
6.00
6.00
6.00
5.75
5.75
Assumes comparability under existing law and under existing comparability bases.
TAB B
THE WHITE HOUSE
WASHINGTON
Returned
1020 LIBRARY is
Put
1
ACTION
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF MANAGEMENT AND BUDGET
SECUTIVE
STATES
WASHINGTON, D.C. 20503
DEC
SECRET WHEN WITH ATTACHMENT
MEMORANDUM FOR:
THE PRESIDENT
FROM:
James T. Lynn
SUBJECT:
Final decisions - 1977 budget outlays
Background
At our last meeting on the budget, we promised to give you a list of
final decision items when we had a firm 1977 outlay total.
Discussion
Outlay estimates for 1977 now total $387.7 billion. As shown under
Tab A, the estimates have dropped primarily because of the economic
assumptions you have approved.
It is my view that the total 1977 budget outlays in your January
budget should not exceed $393 billion. This would give you some
desirable flexibility within a $395 billion limit. As you know,
estimates of many items can change materially in a relatively short
time. Further, you may want to request some additional amounts for
energy or rail programs at a later date. Accordingly, I believe a
$2 billion cushion is the minimum we should have.
At Tab B is a listing of possible additions to the $387.7 billion
that you might wish to consider. On the list is an identification
(by an asterisk) of $5.2 billion in additions that I recommend.
This would bring the total to around $392.9 billion.
The estimates are still subject to further possible adjustments.
But if you will indicate your decision on the Tab B listing, we will
try to maintain the totals consistent with the level indicated by
the additions you choose.
Recommendation
That you agree to additions totalling $5.2 billion and a 1977 budget
outlay total of no more than $393 billion.
Attachments
SECRET WHEN WITH ATTACHMENT
Tab A
Tab A
CHANGE IN
1977 OUTLAY ESTIMATES
as of December 26, 1977
(Billions)
Total as of December 21, 1975
$391.9
HEW - Revised economic assumptions, shift to phase-in of limit
on indexed programs and other reestimates
+.3
Labor - Revised assumptions on unemployment rates and other
reestimates
-1.4
Naval Petroleum Reserve offsetting receipts - Not previously
included
-.7
Defense and military assistance - Mainly adjustments to
conform to currently planned levels on pay increases (60%
limit on comparability pay and phase-in of retired pay at
66-2/3%)
-.6
Civil Service Commission - Mainly changed economic assumptions
and revised estimates related to the phase-in limit on
retirement benefits
-.3
HUD - Various revisions in outlay estimates
-.3
Contingencies - Reduce from $2.0 billion to $1.5 billion
-.5
All other changes
-.7
Total as of December 26, 1975
387.7
GERAL FORD
Tab B
Tab B
POSSIBLE ADDITIONS
to 1977 Budget Outlays
Don't
Add
add
(In millions)
Removal of limits (now at phase-in rate of 66-2/3%) on:
1. Social Security, SSI, Railroad retirement
(By law, these increases are limited)
1,800 *
ART
2. Civil Service and Military retired pay
500 *
3. Removal of Federal pay limit (now at "cap" of 60%
of increases that would occur under new "pay-line")
1,300
met
4. Add "sweetener" to new block grant for Social
services (above $2,000 million)
300 to 500 *
5. Propose Medicare initiatives to cover catastrophic
met
illness above $500 for hospital fees and $250 for
physicians fees (compared to $810 now planned in
current figures for both kinds of fees)
675*
6. Veterans pensions -- Drop plans to change the way
income is calculated in determining pensions
560*
net
7. Recognize probability that OCS oilland revenues
(offsetting outlays) are more likely to be
$7 billion rather than $8 billion
1,000*
8. Security assistance -- Add BA of $813 million in
transition quarter and $545 million in 1977 per
attached classified memorandum
600
Add the following smaller items that may cause greater
problems than their size might indicate:
9. Land and water conservation fund -- Restore to
AR7
$300 million program level rather than
$180 million
120*
Me7
10. LEAA grants -- Generally restore to 1976 base
level by adding BA of $33 million
4*
MR4
11. Indian school construction -- Drop plans for
moratorium adding $31 million in BA
(approximately the 1975 program level)
20*
12. National Science Foundation -- Add $50 million
for basic science to satisfy scientific
community
13
* Recommended additions.
ACTION
FRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
SECTIVE
STATES
WASHINGTON, D.C. 20503
DEC 30 1975
SECRET
MEMORANDUM FOR THE PRESIDENT
FROM:
JAMES LYNN
SUBJECT:
Security Assistance Decisions for Transition Quarter
and 1977
In addition to appealing your decisions on 1977 security assistance
levels, the State Department is now requesting an $813 million budget
amendment for the Transition Quarter budget to provide additional
security assistance funding for the Middle East at one-fourth the level
requested for 1976. Your decision on the Transition Quarter should
be made in conjunction with your pending decision on State's appeal of
the 1977 Middle East programs and the FMS credit level for Latin America.
Middle East
(Programs in $ millions)
Transition Quarter
1977
State
NSC
Presidential
State
1976
Budget
Amendment
Alt.
Decision
Appeal
1,750
Israel
2,240
---
564
150
1,600
2,000
(FMS)
(1,500)
---
(375)
(1,000)
(1,350)
(Economic)
(740)
---
(189)
(150)
(600)
(650)
226
Jordan
253
---
38
16
210
250
(MAP)
(100)
---
(75)
(75)
(FMS)
(75)
---
(19)
(70)
(100)
(Economic)
(78)
---
(19)
(16)
(65)
(75)
687
Egypt
750
---
188
137
550
650
(Economic)
87
Syria
90
---
23
17
70
75
(Economic)
Total
3,333
---
813
320
2,430
2,975
SECRET
DECLASSIFIED
E.O. 12958, Sec. 3.5
NSC Memo, 11/24/98, State Dept. Guidelines
By WHM , NARA, Date 11/24/00
SECRET
2
Transition Quarter
The basic issue is the level of assistance to Israel. The recommended
increases for Jordan, Egypt, and Syria are designed to balance the
proposed increases for Israel.
State request. State argues that additional FMS credit is needed in
the Transition Quarter to avoid a cash deficit position in 1977 based
on purchases already approved and a "conservative" estimate of new
purchases. Available Defense Department data do not support this
claim; they indicate that, even if the full 1976 MATMON increment were
approved, an estimated $250 million of the $1.5 billion 1976 FMS
program would be carried over into 1977. Adding $375 million in the
Transition Quarter would, therefore, increase the carry-over to $625
million.
State's argument for Transition Quarter economic aid to Israel is
essentially political- that Israel is expecting some additional foreign
exchange relief from Transition Quarter funding and would be disappointed
not to get it. OMB believes that the $1.4 billion which you recently
approved for economic aid to Israel ($800 million for FY 1976 and $600
million in FY 1977) will enable Israeli GNP to grow moderately
throughout calendar years 1976 and 1977 and that further economic aid
could discourage Israel from undertaking required economic reforms.
The increased amounts for the other countries would not have been
requested in the absence of the increased request for Israel.
If approved, the additional Transition Quarter funding would increase
Transition Quarter outlays by an estimated $120 million and 1977 outlays
by an estimated $400 million. This increase would be in addition to a
$200 million increase in 1977 outlays if you approve the State appeal
level for the Middle East.
NSC alternative. We understand that NSC will recommend that Israel,
Jordan, Egypt, and Syria each receive one-quarter of the economic
supporting assistance level which you approved for 1977. No FMS credit
would be requested to avoid appearing to support Israel's exaggerated
military force goals.
OMB recommendation. OMB believes that the current levels of aid are
already above levels which can be justified programmatically. Seeking
budget amendments of $813 million for additional aid to the Middle East
is likely to generate considerable congressional resistance and will
force offsetting reductions in other programs.
B.FORO
SECRET
SECRET
3
The additional FMS credits for Israel would increase the unused carryover
military credits into 1977 from about $250 million to $625 million.
This increase is clearly unnecessary unless the Israeli's are going to
be permitted to purchase more than the MATMON request--a level which NSSM
231 determined to be already in excess of demonstrable needs and likely
to promote a destabilizing Arab arms buildup.
OMB estimates that the already approved level of economic assistance
will permit Israeli imports about $300 million above the level necessary
to maintain the real imports at the 1976 level. The proposed Transition
Quarter funding would permit an increase in imports of almost $500
million above the 1976 level in real terms.
Finally, in order to maintain a balance with the Israelis, aid to the
three Arab countries would have to be increased by almost $250 million.
This would provide aid far in excess of their needs when added to the
already approved 1977 levels. These increases would simply add to the
unused backlog of aid funds in Egypt and the build up of Syrian and
Jordanian foreign exchange reserves, thereby raising the likelihood
of adverse U.S. public and congressional reaction.
1977 Appeal of Middle East Programs
I am not aware of any new factors that would affect your decision on
State's 1977 appeal beyond those set forth in the attached appeal
memorandum. OMB and NSC continue to support your original decision.
If you decide to increase funding in the Transition Quarter, OMB
recommends that you decrease the 1977 level by an equal amount since
calendar year 1977 import requirements are already adequately provided
for.
1977 Latin America FMS Credits
State has appealed your decision to provide $185 million in FMS credit
to Latin America in 1977 and recommends $238 million. The arguments for
and against the higher level are set forth in the attached appeal
memorandum.
We understand NSC now recommends a more modest increase to $200 million.
OMB continues to support the $185 million level.
SECRET
SECRET'
4
Decisions:
1. Transition Quarter - Middle East
- Approve State request ($375 million FMS and
$438 million SA)
- Approve NSC alternative (no FMS; $320 million
SA)
- Reconfirm budget (no FMS or SA for Middle
East) (OMB recommendation)
2. 1977 Middle East
a. Israel
- Accept State appeal ($2 billion)
- Reconfirm original decision ($1.6 billion)
(OMB/NSC recommendation)
b. Jordan
- Accept State appeal ($250 million)
- Reconfirm original decision ($210 million)
(OMB/NSC recommendation)
C. Egypt
- Accept State appeal ($650 million)
- Reconfirm original decision ($550 million)
(OMB/NSC recommendation)
d. Syria
- Accept State appeal ($75 million)
- Reconfirm original decision ($70 million)
(OMB/NSC recommendation)
e. Reduce above decision levels by amount of
increase in Transition Quarter
SECRET
SECRET
5
3. Latin America FMS
- Accept State appeal ($238 million)
- Approve NSC alternative ($200 million)
- Reconfirm original decision ($185 million)
(OMB recommendation)
Attachment
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON. D.C. 20503
SECRET - GDS
MEMORANDUM FOR:
THE PRESIDENT
FROM:
JAMES T. LYNN and HENRY A. KISSINGER
SUBJECT:
Budget Appeal on Foreign Aid
The State Department is appealing your decisions on: (1) the Middle
East; (2) FMS credits to Latin America; and (3) military assistance
to the Philippines. OMB recommends that you reconfirm your earlier
decisions.
(1) Middle East
(Program in $ millions)
1977
Original
OMB
Presidential
State
1976
Request
Recom.
Decision
Appeal
1.
Israel
2,240
2,240
700
1,600
2,000
(FMS)
(1,500)
(1,500)
(400)
(1,000)
(1,350)
(Economic)
( 740)
( 740)
(300)
( 600)- TO
( 650)
Jordan
253
253
180
210
250
(MAP)
( 100)
( 100)
( 50)
(
75)
( 75)
(FMS)
( 75)
( 75)
( 80)
( 70)
( 100)
(Economic)
( 78)
(
78)
( 50)
(
65)
( 75)
Egypt
750
750
400
550
650
(Economic)
Syria
90
90
60
70
75
(Economic)
Total
3,333
3,333
1,340
2,430
2,975
Excludes P.L. 480
The basic issue concerns the level of assistance to Israel. We under-
stand that your primary concern is to avoid creating the expectation
of continued aid at the very high 1976 levels, while at the same time
avoiding the appearance of a punitive reduction in aid levels to Israel.
The assistance levels to the other countries are largely based on the
perceived balance with Israeli aid.
SECRET - GDS
SECRET - GDS
2
Arguments for the State Appeal
-- The $700 million reduction in total aid to Israel from the
1976 level of $2.3 billion would be interpreted by the Israelis
as punitive.
-- It would also be viewed by Israel as further evidence of lack
of U.S. support at a time when we are not supporting them on
other issues (e.g., PLO participation in UN debates).
-- The State appeal program of $2.0 billion, a $400 million
increase over your earlier decision, is judged to be the minimum
necessary to substantially ease these Israeli concerns and
continue the flow of military equipment perceived as essential
by the Israelis.
The State proposed increase in aid to the Arab countries is
primarily required to balance the increase for Israel.
VORD
The $1.35 billion in military financing is needed to assure
financing for military imports at the full MATMON level in
both 1976 and 1977.
Arguments for Maintaining Your Initial Decision
-- The $1.6 billion level should provide adequate psychological
assurance of U.S. support in view of the high level of military
imports, without encouraging Israeli intransigence.
-- The $1.6 billion aid level for Israel meets essential economic
import needs and provides for high levels of military imports
(full MATMON in 1976 and 1/3 MATMON in 1977), whereas the $2.0
billion level would more than cover full MATMON in both years.
Military imports even approaching the MATMON B levels for
1976-1980 will be highly destablizing and are likely to force
an escalation of the Arab military buildup. (The draft NSSM 231
study indicates that the MATMON B level of Israeli military
purchases should be rejected and the level held to the minimum
needed for essentially political purposes since Israel's defense
capabilities are fully adequate through 1980 without any new
orders from the U.S.)
Increases in aid to the other countries are programmatically
unjustified and would merely increase excessive Syrian foreign
exchange reserves and add to the large pipeline in the Egyptian
aid program and further encourage the Egyptian refusal to follow
IMF and U.S. Government recommendations for essential economic
reform.
SECRET GDS
SECRET - GDS
3
-- Finally, the State appeal would raise the "base" from which
future aid levels will be calculated and would increase 1977
outlays by about $200 million.
(2) Latin America FMS Credit Levels
(Program in $ millions)
1977
Original
OMB
Presidential
State
1976
Request
Recom.
Decision
Appeal
FMS Credits
180
238
180
185
238
State recommends reconsideration of your decision to request $185
million in 1977. Principal increases within the $238 million regional
program would be in Brazil (up from $60 million in 1976 to $90 million),
Argentina (up from $34 million in 1976 to $50 million), and Chile (up
from nothing in 1976 to $20 million). These and some smaller increases
for Bolivia and Colombia would be partially offset by dropping
Venezuela, Mexico, and the Bahamas.
Arguments for the State Appeal
-- The increase for Brazil is necessary to preserve our position
as the primary source of military equipment for Brazil's forces.
-- The Argentine program must be increased to accommodate
Argentina's force modernization plans and maintain our overall
relations with a country where the military is taking
increasing responsibility for government.
-- The $6 million increase for Bolivia is needed to offset the
phaseout of grant MAP.
Arguments for Your Earlier Decision
-- The $185 million already provides a small increase over the
1976 request, and is substantially above the $134 million the
region was able to utilize in 1975.
-- The $185 million level is adequate to cover desired increases
for Bolivia and Colombia, allow up to $20 million for Chile,
and permit funding Brazil and Argentina at the 1975-76 levels.
-- Secretary Simon opposes increases for Argentina as a poor
credit risk.
-- Congress is likely to delete funds for Chile for human rights
reasons and may question a 50% increase for Brazil on similar
grounds.
SECRET. - GDS
SECRET - GDS
4
(3) Philippines
(Program in $ millions)
1977
Original
OMB
Presidential
State
1976
Request
Recom.
Decision
Appeal
Grant MAP
19.6
20
15
15
20
FMS Credits
17.4
20
25
25
20
37.0
40
40
40
40
Arguments for the State Appeal
-- We are about to enter negotiations with the Philippines on
the status of our military bases and on the entire range of
our bilateral economic relations. A reduction in our MAP
level would probably toughen Philippine positions on both
these issues.
-- It is Ambassador Sullivan's judgment that if our MAP level falls
much below $20 million, the Philippines will demand rent for
continued use of the bases.
-- You already approved a MAP level of $19.6 million for Indonesia
in FY 1977. We should not have a lower MAP figure for the
Philippines, which permits us to have bases on its soil, than
for Indonesia. The Philippines is highly sensitive to such
comparisons.
Arguments for Your Earlier Decision
-- The MAP phasedown for the Philippines is part of a gradual
worldwide substitution of FMS credits for grant MAP.
-- The Philippines may request large increases in aid as part of
the base negotiations, and the going-in position should not be
increased above the minimum necessary.
Decisions
1. Israel
- Accept State appeal ($2 billion)
- Reconfirm original decision ($1.6 billion)
(OMB recommendation)
SECRET - GDS
SECRET GDS
5
2. Jordan
- Accept State appeal ($250 million)
- Reconfirm original decision ($210 million)
(OMB recommendation)
3. Egypt
- Accept State appeal ($650 million)
- Reconfirm original decision ($550 million)
(OMB recommendation)
4. Syria
- Accept State appeal ($75 million)
- Reconfirm original decision ($70 million)
(OMB recommendation)
5. Latin America FMS
- Accept State appeal ($238 million)
- Reconfirm original decision ($185 million)
(OMB recommendation)
6. Philippines
- Accept State appeal ($20 million MAP, $20 million
FMS)
- Reconfirm original decision ($15 million MAP, $25
million FMS) (OMB recommendation)
CC: Official File - DO Records
Director
Director's chron
Deputy Director
Mr. Ogilvie
Mr. Sanders
Mr. Shaw
Mr. Sisco - State Department
Return - Room 8201, NEOB
Return - Room 8236, NEOB
IAD:EGSanders/HJShaw:neh 12/11/75
SECRET GDS
BUDGET TOTALS
As of December 31, 1975
(In billions)
Surplus or
Outlays
Receipts
Deficit (-)
1976
$372.7
$297.4
$-75.3
1977
393ª/
352
-41
1978
432ª/
408
-24
1979
448
467
+19
a/ Adjusted to include recommended additions.
OFFICE OF MANAGEMENT AND BUDGET
ABSTRACT OF CORRESPONDENCE
TO:
The Director
The Deputy Director
X
FROM:
Assistant Director for Budget Review
OUTGOING TO:
SUBJECT:
Federal Civilian Employment
Attached is a status report on Federal civilian
employment, as of December 26, 1975, listing the changes since
the previous (12/17/75) report was prepared. This report
reflects the results of a final verification, by the program
divisions, of all employment data held by BRD. Future changes,
if any, will likely be small ones of a "house-cleaning" variety,
and should not significantly impact the totals shown in this
report.
CC: Mr. O'Neill
Mr. Collier
Mr. Mitchell
Mr. Ogilvie
Mr. Oaxaca
Mr. Preston
Mr. Jura
FORD LIBRARY #79495
CONTROL NO.
PREPARED BY
CLEARED BY
CLEARED BY
CLEARED BY
CLEARED BY
CLEARED BY
CLEARED BY
SURNAME AND
Oberlander
Strauss
McOmber
DIVISION
BRD/RSB
BRD/RSB
BR
(Typed)
INITIALS AND
DATE
22/26
89 12/26
hom
12/26
437-3
CIVILIAN EMPLOYMENT
Estimates as of December 26, 1975
(In thousands)
Full-time
Permanent
Total
Actual
June 30, 1975
1,917
2,106
September 30, 1975
1,913
2,113
Planned
June 30, 1976
1,932
2,117
September 30, 1977
1,918
2,090
Changes
September 30, 1975 to September 30,
1977
+5
-23
June 30, 1976 to September 30,
1977
-14
-27
1977 BUDGET
CIVILIAN EMPLOYMENT STATUS REPORT
AS OF DECEMBER 26, 1975
Estimates (in thousands)
June 30, 1976
September 30, 1977
FTP
Total
FTP
Total
Estimates, as of December 17:
1937.6
2111.8
1917.6
2088.4
Major changes:
Agriculture
-
+5.4
-
-
Defense-Military Functions
-5.1
-0.2
-
-
HEW
+0.1
+0.1
+0.5
+0.5
Interior
+0.4
+0.4
+0.5
+0.5
Justice
-
-
-
+0.2
Labor
-
+0.1
-
+0.2
Transportation
-
-
+0.1
+0.1
Treasury
-
-
-0.5
-0.5
ERDA
+0.1
+0.1
-
-
Selective Service System
-1.2
-1.1
+0.1
+0.1
USIA
-0.2
-0.2
-
-
All other
1/
+0.3
+0.5
+0.2
+0.2
Estimates, as of December 26, 1975:
1932.0
2116.9
1918.5
2089.7
1/ "All other" includes effects of minor adjustments in some of the
larger agencies not listed (i.e. changes of less than 50).
Summary Comparison
June 30, 1975
Sept. 30, 1975
June 30, 1976
Sept. 30, 1977
Actual
Actual
Estimate
Estimate
FTP
1917.4
1912.5
1932.0
1918.5
Total
2106.4
2113.1
2116.9
2089.7
REPORT REQ1
SUMMARY OF CABINET AND LARGE INDEPENDENT AGENCIES
PAGE
1
AS OF : 12/26/75
AGENCY/SUBTOTAL/TOTAL
P.Y.
P.Y.
C.Y.
C.Y.
B.Y.
B.Y.
FTP
TOTAL
FTP
TOTAL
FTP
TOTAL
DEPARTMENT OF AGRICULTURE
79133
118986
80380
119380
80380
114020
DEPARTMENT OF COMMERCE
28667
35671
28906
36023
28654
36049
DEPARTMENT OF DEFENSE, MILITARY FUNCTIONS
954721
989323
930688
962275
924000
942000
DEPARTMENT OF DEFENSE CIVIL FUNCTIONS
29069
33665
29096
33069
29096
32225
DEPARTMENT OF HEALTH, EDUCATION AND WELFARE
129285
141804
134902
147402
128175
140675
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
15142
16881
14960
16885
15650
17275
DEPARTMENT OF THE INTERIOR
58088
79115
59118
78704
59228
80005
DEPARTMENT DE JUSTICE
49032
50961
51552
53171
51745
53462
DEPARTMENT OF LABOR
13219
14188
14576
16259
14910
16469
STATE DEPARTMENT
22324
23652
22939
24555
22947
24563
DEPARTMENT OF TRANSPORTATION
LIBRARY
70345
72575
72394
74594
72598
74798
DEPARTMENT OF THE TREASURY
108138
119281
113995
124118
109955
120647
*
1557163
1696102
1553506
1686435
1537338
1652188
CABINET LEVEL AGENCIES
ENERGY RESEARCH & DEVELOPMENT ADMIN.
7457
7973
8335
8965
8425
9149
ENVIRONMENTAL PROTECTION AGENCY
9160
10172
9550
10565
9550
10565
GENERAL SERVICES ADMINISTRATION
36400
38219
36768
38768
35989
37989
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
24333
25638
24316
25711
23816
25211
VETERANS ADMINISTRATION
184502
209123
196608
222759
198149
226505
AGENCY FOR INTERNATIONAL DEVELOPMENT
6185
6587
6152
6627
6152
6627
CIVIL SERVICE COMMISSION
6670
7974
6835
8315
6864
8344
FEDERAL ENERGY ADMINISTRATION
2978
3245
3200
3200
1791
1791
NUCLEAR REGULATORY COMMISSION
2006
2217
2289
2589
2529
2743
PANAMA CANAL
13768
14988
13840
15040
13840
15040
SELECTIVE SERVICE SYSTEM
2121
2256
170
227
90
90
SMALL BUSINESS ADMINISTRATION
4127
4698
4339
4792
4434
4764
TENNESSEE VALLEY AUTHORITY
14084
28242
15100
29420
15500
32130
UNITED STATES INFORMATION AGENCY
8662
8783
8800
9004
8800
9004
322453
370115
336302
385982
335929
389952
LARGE INDEPENDENT AGENCIES
FINAL TOTAL
1879616
2066217
1889808
2072417
1873267
2042140
TOTAL NUMBER OF ITEMS RETRIEVED
26
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
December 24, 1975
FORD
MEMORANDUM FOR:
JAMES T. LYNN
lial
FROM:
CALVIN J. COLLIER
SUBJECT:
GSA Public Buildings
We need a final decision on the Public Buildings matter
right away.
The decision to go ahead with full funding of all pending
prospectuses poses serious problems because:
-- It requires a request for $318 million in budget
authority (with about $79 million in FY 1977 out-
lays) as set forth in detail in Tab A;
--- But the Federal Building Fund (FBF) will only
have $50 million available in FY 1977.
The reduced size of the FBF next year results from our earlier
decision to cut GSA's requested SLUC rates. That decision
cannot be reversed at this time.
There are several options:
OPTION 1: Approve all prospectuses and provide for
full funding through legislation that would authorize
appropriations to the FBF coupled with a request for
appropriations of $268 million ($318 million minus
$50 million).
Advantages:
-- Would implement full funding decision.
Disadvantages:
-- The Hempstead building should probably be scaled
down in scope.
-- The Phoenix prospectus has not yet been analyzed.
-- None of the new buildings are cost-effective.
2
-- Alternative analysis to support the new buildings
on other grounds (e.g., downtown renewal, jobs,
public convenience through consolidation) cannot
be completed in time to meet budget deadlines.
-- Legislation to provide appropriations to the FBF
is inconsistent with the FBF concept and, in view
of dissatisfaction with the SLUC system, could
very well result in Congress abolishing FBF,
SLUC, and the user charge principle these systems
stand for.
OPTION 2. Unlink prospectus approval from funding.
Request funds for already approved prospectuses
(specifically, those which have been approved by Congress,
plus the Madison Courthouse) totalling $22.5 million.
Proceed with further analysis looking toward prospectus
approval for Springfield, Providence, Witchita, some
version of Hempstead, and maybe Phoenix. Do not request
funds for these new buildings on the grounds that the
FBF is depleted.
FORD
Advantages:
LIBRARI
-- Allows further prospectus analysis that might
provide a better basis for affirmative de-
cisions.
-- Provides convincing explanation for declining
to fund new buildings.
-- Prospectus approval will provide some satis-
faction to those who want these buildings, even
without immediate funding.
-- Will permit further work on prospectuses to
scale down Hempstead, digest Phoenix, and per-
haps reduce Witchita or Providence.
-- Does not risk tampering with or destruction of
FBF and SLUC systems.
Disadvantages:
-- Implies spending of $22.5 million in budget
authority and $7.5 million in outlays in FY 1977
against the $395 ceiling.
3
-- Implies approval of prospectuses that are cost-
ineffective.
OPTION 3. Same as Option 2 except no commitment to
approve prospectuses for Springfield, Providence,
Witchita, Hempstead, or Phoenix.
OPTION 4. No funding for new construction in FY 1977
and no commitment on new prospectuses. This represents
the OMB recommendation and is consistent with previous
guidance.
Advantages:
-- Programmatically justified in tight budget year.
-- Will make prospectus disapproval more explainable
to interested persons.
-- Avoids programmatic anomaly of extremely tight
budget for GSA repairs and alterations (which
is a better use of funds) in favor of lower
priority new construction.
Disadvantages:
-- Will be unpopular.
-- May be reversed by Congress.
DECISION
OPTION 1
OPTION 2
OPTION 3
OPTION 4
See me
Attachment
1/
BA
Outlays (millions)
Present value cost per square foot
Project
(millions)
FY77
FY78
FY79
Existing Space
Proposed building
Approved by OMB
and Congress.
Augusta, Georgia -
building conversion
.8
Atlanta, Georgia -
building conversion
1.8
Blaine, Washington -
border station
3.1
East St. Louis, Illinois -
new building
5.4
Los Angeles, California -
parking facility
5.6
Subtotal
16.7
4.2
8.3
4.2
Approved by OMB -
awaiting Congress.
Madison, Wisconsin -
courthouse
5.8
Washington, D. C. -
Penn. Ave. annex
88.2
West Los Angeles -
parking facility
9.3
Subtotal
103.3
25.8
51.7
25.8
Outlay distribution assumes a spendout of 25% in the first year, 50% in the second year and 25% in
the third your, based on historic experience.
BA
Outlays (millions)
Present value cost per square foot
Project
(millions)
FY77
FY78
FY79
Existing space
Proposed building
Pending at OMB -
recommend denial
Springfield, Massachusetts
new building
14.7
$110
$208
Witchita, Kansas -
new building
28.2
2403
80
200
Providence, Rhode Island -
new building
31.9
90
235
Hempstead, New York -
new building
84.0
96
280
Subtotal
158.8
39.6
79.1
39.6
Pending at OMB -
not yet analyzed
Phoenix, Arizona -
new building
40.3
10.1
20.1
10.1
Grand Total
318.6
79.1
159.2
79.1
Outlay distribution assumes a spendout of 25% in the first year, 50% in the second year and 25% in
the third year, based on historic experience.
Alternative Pay Raise Assumptions
Fiscal Year 1977
(dollars in millions)
Existing
Proposed
Proposed
Changes from
Comparability
Comparability
Alternative
Last Budget
Plan2
Estimates
Civilian:
Civilian Agencies
White collar
1,778
972
726
140
Wage Board
94
7
34
-3
Defense
White collar
1,057
579
432
85
Wage Board
368
26
127
-94
Total Civilian
White collar
2,835
1,551
1,158
225
Wage Board
462
33
161
-97
Military
2,662
1,398
1,043
200
Total
5,959
2,982
2,362
328
Civilian agencies
(1,872)
(979)
(760)
(137)
Defense
(4,087)
(2,003)
(1,602)
(191)
Rates of Increase:
White collar and
military
11.5
6.3
4.7
Wage Board
9.8
0.7
3.4
GUOS
1/ - CSC changes on White Collar plus Panel legislative proposals on Wage Board
2/ - 5% maximum on White Collar. 3% minimum on all.
Tobacco Subsidies
in FY 1977 Budget
Net expenditure (outlay) estimates included in the 1977
budget for stabilizing incomes of tobacco farmers are
summarized in the table below.
(Millions of dollars)
Type of
Price support
tobacco
program
PL 480
Total
Flue cured
38.8
14.8
53.6
Burley
28.2
3.9
32.1
Other
1.4
--
1.4
Total 1977
68.4
18.7
87.1
19TQ
87.4
--
87.4
1976
323.4
14.8
338.2
1975
-129.2
18.0
-111.2
A 15 percent cut in marketing quotas for flue cured tobacco
and assumptions that the 1976 crop will be of average
quality and that demand will continue to be strong are
responsible for the sharp reduction in tobacco outlays from
1976 and 19TQ.
The export payment program for tobacco is being phased out
in 1976 so no money has been budgeted for this in 1977.
The extent to which the incomes of tobacco farmers are
enhanced through the operation of the price support program
is not, of course, fully reflected in the above figures.
Most of the benefits flow directly to producers from tobacco
users who must pay the higher prices which result from
government production control and price support operations.
Other major Federal agricultural programs involving tobacco,
and the approximate amount included in the 1977 budget are:
Program
Million dollars
Tobacco market news
0.5
Tobacco grading & inspection
5.1
Tobacco research in USDA
5.2
Tentative Listing
Information Topics
1977 Budget
Human and Community Affairs
1. Health services block grant
2. Social services block grant
3. Education block grant
4. Medicare
5. Social security (Decoupling and other reforms, rate
increase)
6. Retirement funds generally (including proposal to
remove 1% kicker) (may be combined with social
security).
7. Food stamp program
8. Child nutrition block grant
9. Education impact aid
10. Higher education programs
11. Temporary employment assistance
12. CETA and summer youth program
13. Unemployment insurance proposals
14. Drug abuse program
15. Public health hospitals
16. Veterans-Quality Care
17. Veterans education program
18. Other reforms of veterans programs including
reimbursement by private insurers for medical care
and removal of duplicate burial benefits.
19. Housing -- programs
-- planning (701) grants
20. Community development
21. Work Incentives programs
22. Welfare programs (including SSI)
Natural resources, energy and science
23. Research and development (Government-wide)
24. Waste treatment construction
25. Agricultural Conservation Programs
26. Flue-cured tobacco and peanut price supports
27. Space program
28. Energy initiatives
29. National parks
30. EPA water quality planning (208) grants and control agency
grants.
31. Energy Independence authority proposal
32.
Synfuels proposal
2
33. Tax credit for utilities
34. OCS receipts
National Security and International Affairs
35. Defense
a. -- to answer criticism that budget level is not high
enough
b. -- to answer criticism that budget level is too high
36. Reserves and National Guard
37. Compensation and fringe benefit reforms -- Including
pay increases, commissaries, etc.
38. Foreign assistance
39. Selective Service
40. Civil Defense
41. Export-Import Bank
Economics and Government
42. General revenue sharing
43. Postal Service subsidy
44. New York City financing
45. Highway program
46. Rail program
47. Aviation program
48. Water transportation program including waterways (user
charges)
49. Law enforcement
50. Business assistance including small business
51. Regulatory agencies
52. Economic Development Administration and regional
commissions
53. Rural development including rural water and waste
disposal (perhaps combined with #52)
General
54.
Pay increases
55. Tax proposals
56. Efforts to achieve operating efficiencies
THE PRESIDENT HAS SETH
THE
RESIDENT
OFFICE
EXECUTIVE OFFICE OF THE PRESIDENT
UNITED
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
JAN
19/8
INFORMATION
MEMORANDUM FOR:
THE PRESIDENT
your
FROM:
JAMES T. LYNN
SUBJECT:
Military Assistance to the Philippines
At our budget session last week, we discussed your earlier
decision on the Philippines and the State appeal. At the
time, I did not have a table showing your final decision.
The table below shows the sequence of budget decisions.
We are preparing the budget on the basis of your final
decision.
($ in millions)
1977
1976
State
Initial
State
Final
Budget
Request
Decision
Appeal
Decision
Grant MAP
19.6
20.0
15.0
20.0
19.6
FMS credit
17.4
20.0
25.0
20.0
20.0
Training
.8
.6
.6
.6
.6
37.8
40.6
40.6
40.6
40.2
GERATA R.TORD