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Press Conference of Roy Ash, Director, Office of Management and Budget
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Press Conference of Roy Ash, Director, Office of Management and Budget
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Digitized from Box 2 of the White House Press Releases at the Gerald R. Ford Presidential Library
EMBARGOED FOR RELEASE
SEPTEMBER 20, 1974
UNTIL 12 NOON EDT
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE
OF
ROY ASH
DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET
THE BRIEFING ROOM
10:31 A.M. EDT
MR. HUSHEN: The President today is trans-
mitting to Congress the first message on deferrals and
recissions of budget funds. You have copies of the
message to Congress, a fact sheet and a memorandum to the
heads of departments and agencies.
Mr. Roy Ash, Director of the Office of Manage-
ment and Budget, is here to summarize the message for
you and to answer questions you may have.
I would like to point out just one thing:
On page 3 of the fact sheet, item 3, we have an
inaccurate fact. The Health, Education and Welfare
programs should be $40 million deferred, not $42 million,
and I would just like to remind you again that all of
this information is embargoed until 12 noon.
MR. ASH: Ladies and gentlemen, as you know,
the new Congressional Budget Act provided that the
President submit to the Congress reports of actions that
he proposes be taken by the Congress related to deferrals
of spending that he would be making related to rescinding
of authorities to spend that he may be making.
This first report proposes to defer or
rescind amounts aggregating to somewhat over $20
billion.
Now, I should make clear right at the beginning
that these amounts that have been reserved and are now
being reported are not new ones in the sense that they
represent new programs or new Presidential actions that
are still in the process of being worked on to reduce
the budget below $305 billion.
MORE
(CVER)
- 2 -
Quite the contrary, these actions are ones
that are necessary in order to not exceed $305 billion
as expenditures. In effect, these were already contem-
plated in the budget. These amounts have been reserved
over the past weeks and months, and some of them
have accumulated over years and are merely being
reported to Congress for the first time. They do not
represent new reductions of the kinds that would get the
budget to below $300 billion.
I should also make one other point clear, that
when we are talking about $20 billion, we are talking
about $20 billion of budget authority. We are not
talking about $20 billion of cash. The amount of cash,
even if hypothetically these amounts were spent, would
not be anywhere near $20 billion, but only $600 million.
So, in putting that first, in those two
contexts, I think you can begin to make clear what we
are doing here. We do believe that it is essential at
this first reporting time to discuss it as completely
as we can with you, with everybody else who is
interested in this subject.
Of course, day after day, month after month and
year after year, we will be having a continual flow of
deferral and recission messages to the Congress. Each
of those would probably not be the subject of the same
kind of press briefing that this one would be as soon as we
all get used to the process.
I will take whatever questions you have.
Q Mr. Ash, if I understand you correctly,
this would only lead to $600 million cash savings at
this time, but if you don't get this, it will lead to
$20 billion spending over a number of years?
MR. ASH: Yes, I think I would say that that is
right, if the Congress did not concur. And, of course,
we expect them to concur because there are no new
policy decisions or judgments that are new to the Congress.
But if theoretically they did not concur, that would add
to outlays this year of $600 million, but it would
add $2 billion next year, and it would total up to $20
billion, of course, during the course of spending all
of this budget authority.
Q
If the Congress does not go along, what
does that do to you?
MR. ASH: There are two kinds of actions that
we take, and they call for two kinds of Congressional
actions. The deferrals and recissions are of a different
kind.
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- 3 -
On deferrals, if the Congress takes no
action at all, the Executive, the President, continues
to defer those amounts. They are not spent and as
a result, the position that we have heretofore
taken merely continues indefinitely.
As to recissions, we propose those to the
Congress and those require affirmative Congressional
action to support the position taken by the President.
If they do not take that affirmative Congressional
action, then, of course, after 45 days, then those
monies must be available for obligation.
By far, the biggest part of this $20 billion
are deferral actions. Less than one-half of $1 billion
are recission actions.
Q
Mr. Ash, several weeks ago the President
told a number of Congressmen who visited him that
the defense budget is not, in his words, sacrosanct. As
I glance through these deferrals and recissions, I see
that there isn't any cutback in defense spending and,
furthermore, why is the largest recission in Health,
Education and Welfare programs, $40 million?
MR. ASH: First, another package will be forth-
coming here in the next few days, which will have in it
a defense component, deferrals and recissions of
defense expenditures.
Q How much?
MR. ASH: This just doesn't happen to be in this
first one. It will be on the order of the magnitude
$1 billion or so of defense.
Q Is that cash?
MR. ASH: Again, budget authority, and that
is coming up in the next few days. It is part of the
same process that generated this process.
Q How much cash?
MR. ASH: On the defense one, I don't know
what it is exactly at this time. It certainly is less
than that because the defense expenditures tend to be
long lead time ones, so it is clearly less than that.
And that will be in this next package.
Again, I must make sure you all understand
these are merely reporting to the Congress for the first
time amounts that in the normal course of business have
been reserved over past weeks, months and years. There
is nothing new or different, it is merely that they
are being reported for the first time. They do not
represent new and different policy actions.
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The Congress is fully aware of all of these
that are now going on and this does not represent anything
new.
I will answer the second question. As to
recissions, you are talking about recissions, the largest
recission is not of HEW, but the largest recission is of
the Rural Electrification Administration funds, somewhat
over $400 million, and that one has to do with the
program that, in effect, has expired because it has
been supplanted by another program to provide similar
needs, and so it is merely proposing that we wipe off
of the books a program that by Congressional action
itself has been brought to an end.
Then the deferral on the HEW funds are ones
for the purpose of allowing the Congress, in the Labor-
HEW appropriations bill it is now considering, to
determine exactly the action that they wish to take.
These are deferrals from the continuing
resolution and, as you know, we have been acting on
a continuing resolution this time until we do get
official Congressional action.
What we are doing in order that we can keep
the options open for the Congress is to defer the
amounts that would be spent under a continuing resolution
until the Congress acts specifically on those programs
in the action it is now taking.
Q
Mr. Ash, what you said about all these
actions, simply reporting actions already taken, would
this apply to the second package also?
MR. ASH: This would apply to the second
package as well. This package of $20 billion, the
second one of about $4 billion, will be reporting
under this new act those reserves that have already
been taken, already on the books, already contemplated
in the budget, already known to the Congress.
They do not represent, as I saw reported
last night, some brand new action to reduce the budget
to bring before the Congress new policy decisions.
This is a reporting process that we are taking that is
going on here more than it is a new policy-making process.
Q
Mr. Ash, will these actions clean up
the pending business?
MR. ASH: They will, yes.
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Q
Then will there be further recissions?
MR. ASH: And then beyond that, as we then
get into further deferrals and recissions, those will
be of new policy actions.
Q
Will that be $4 billion?
MR. ASH: Not the $4 billion, no. The $4 billion
cleans up the old ones and merely reports to the Congress
that which has been on their books for some time. Then
we will begin to get the new ones.
Q
What about the part you just mentioned
as being due in a few weeks?
MR. ASH: Well, it will be a few days.
Q
Not the $4 billion one. I am referring
to the new policy one. Is that a few weeks off now?
MR. ASH: There won't necessarily be one
big report. We will begin a process starting today of
submitting quite frequently to the Congress individual
actions for their consideration. We won't necessarily
accumulate them into one package. This will become a
part of the normal course of business where, from time
to time during the course of a year, quite a number of
times, we will be submitting a deferral or a recission.
The degree to which they will be packaged or not really
depends upon the circumstances.
Q
Mr. Ash, if Congress goes along with
you on the water pollution control deferrals, would that
have a tendency of reversing court decisions which over-
turned the original impoundments?
MR: ASH: No, the legislation, as you may
recall, provides that nothing contemplated in the act
or the administration of the act in any way will affect
the court actions that are now underway on any of these
programs. That is an independent matter and will continue
to be pursued in the courts.
We do believe that as the Supreme Court now
is about to consider the EPA issues that have been
brought before it, that they will agree with our conclu-
sion, and that is that we do have the right and authority
to defer expenditure of these funds.
But that will be up here soon, probably
next month, and it will not be affected by the deferral
and recission action we are taking now on the deferral
and similarly the court case itself will be the guidance
that we will thereafter follow when we get it.
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Q
Mr. Ash, on the item on prisoner of war
claims, I just want to understand it correctly. Does
this mean in effect that each claim, there has been
a hold put on the various claims?
MR. ASH: No, I will tell you what that
one means. An amount of money was appropriated to
provide special benefits to prisoners of war and to
those missing in action provided a means whereby
particularly those that were missing in action, and
the dependents -- not the dependents, but the family
of those missing in action could and would be paid by
the Federal Government, I believe, $60 a month as long as
it was based upon a certification made by the Defense
Department that they were in fact missing in action.
At this time, there are not enough people
that have been so certified to use up all of these
monies that have been provided by the Congress, and
so these are merely the leftover funds for which there
are no claimants.
Q
This does not refer to the claims by
returning prisoners of war for things like back pay
and such things like that?
MR. ASH: Basically, all prisoner of
war claims have been paid. We are talking about MIAs at
this time, and we are talking about the fact that we
have paid all claims, or those that are being processed
expeditiously will be paid, and there has been more money
appropriated than there has been, or we expect there
will be claimants and so we have some leftover money.
Because of that reason, we are proposing to defer those
amounts until new claimants come forth.
Q
I understand you had a meeting with
Senator Muskie a few days ago about these water
pollution deferrals.
MR. ASH: Yes.
Q
Do you expect the Congress to go along
with any or all of this, or is part of this particularly
vulnerable as you see the Congressional action?
MR. ASH: We believe that the Congress will
concur with all of the actions here proposed. These
do not represent new policies. These represent merely
a continuation of positions that the President has had
and Presidents have had over time, and we, therefore,
believe that the Congress will concur with all of these
actions, certainly individual Congressmen or Senators
might see it differently, but we have no reason to believe
that we won't get full Congressional support of all
of these actions here proposed.
MORE
- 7 -
Q
Will you clarify the $1 billion defense.
thing, please? Is that part of the $4 billion? Is that
new or old reporting?
MR. ASH: Let's make it clear. The reporting
of the old accounts that have been on the books for some
time will be done in two packages. This $20 billion one and
a $4 billion one. That $4 billion one includes a
defense component of about $1 billion. After those have
been reported to the Congress for their action, then
any subsequent deferral and recission actions would, of
course, be of new items that would represent a change
of condition or a change of need to defer or to rescind.
Q
Mr. Ash, on the deferral, you said if
Congress takes no action, the President will be able to
continue a deferral?
MR. ASH: That is right.
Q
Are you submitting an entire list for
consideration or will Congress be able to consider each
individual deferral request?
MR. ASH: We are submitting each of the items
and you have in your fact sheet, I believe, a listing of
what those are that make it up -- about 15 or 20, or
something of that number -- and each of them is being
submitted separately for separate Congressional considera-
tion.
Q
Following up on that, Mr. Ash, you only
need Congressional concurrence on less than half a
billion dollars of recissions?
MR. ASH: That is right. We don't even need
that. In fact, there is another issue that I might as
well open up at this time. The law went into effect on
July 12. For those items that were reserved after
July 12 when the law went into effect and for which there
was no subsequent action of reconfirming it or re-reserving
it, we believe that is not even subjected to Congressional
action of any kind.
That, of course, is viewed by some people
differently. Yet our Justice Department has told us that
that is the interpretation of that element of the law.
So you will note on your fact sheet, you
have a number of items for which you have asterisks
beside them and those include all of the recissons we
believe are not subject to that part of this law that
provides for a 45-day waiting time and Congressional
action and then an automatic response in case they do
not act.
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And I think you should distinguish those that
have an asterisk shown from those that don't because
those bear on the present and post July 12 reserve
actions.
Q
What is the total of those that don't?
MR. ASH: Of those that are subsequent to
July 12? No recission subsequent to July 12 and
$9 billion 500 million of deferrals out of this $20
are subsequent to July 12. I mean, $9 billion 520
prior, which would make $10 billion 800 before -- I
mean $10 billion 800 after -- and subject.
The $9 billion 500 that are prior included
largely the Environmental Protection Agency water and
sewer grants. Those amounts were reserved before July 12,
thus we believe are not subjected to Congressional action.
We are, however, reporting all of these to
the Congress whether or not they are subjected to
Congressional action, so they will have the information
in front of them and see the total of what is on the
books even though their action would only be called for
on the $10 billion or so of the total.
Q
Mr. Ash, if Congress nonetheless tries
to take action against you on any of the pre-July 12
items, would you then simply ignore their action or
would you take them to court or let them take you to
court?
MR. ASH: The law specifically provides
that the GAO will make a determination as to the
proper classification of all of these items and the
proper treatment of all of these items.
We have reason to believe that the GAO
does not disconcur with the action that we are taking
relative to those pre-July 12 items, and so we believe
that, as we have reported them here, will be the way
in which they will ultimately be dealt with by the
Congress.
Q
Mr. Ash, regarding the timing of all
of this, why unload all of this on Congress three weeks
before they want to go home and right before an election?
MR. ASH: The legislation passed and made
effective July 12 requires that we submit it immediately.
Immediately was as fast as we could consult with a
number of people in the Congress as to the interpreta-
tion of some of the seeming ambiguities in the law.
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So what we are doing is responding just as
fast as we can to that new legislation. It just
happens that the Congress is in this stage of its
session, but certainly our work has been done as
expeditiously as we have been able to do it, given the
necessity of working with the Congress, interpreting
the law, and given the amount of work we have had to
do to prepare these data.
Q
Why are you putting this in two
separate packages?
MR. ASH: The main things here are that, first,
there is just a lot of work and we thought we would get
the key ones up in front of them rather than waiting
to package it all together. We could have held this one up
for the next few days and sent it up with the other.
But these are the ones that by far contain the largest
amounts. These are the ones that contain the highway
and the water and sewer programs that we know that the
Congress wants to act on, or consider. We don't believe
they are entitled to act on both of them, but instead
only on the highway one, and split it just to keep it.
working rather than hold up the first one until we had
the second one.
Q
What is the end of the time frame on the
$20 billion? In other words, when does the $20 billion
totally run out?
MR. ASH: The $20 billion does not totally
run out. Some of these funds are available indefinitely;
that is, available until spent. Consequently, while the
law provides that we can defer to the end of a fiscal
period, in this case we defer to the end of fiscal year
1975.
Those funds to not lapse at that time, but
we would then propose to continue to defer them until
they are finally made available for obligation and
spent.
So as far as the biggest part of the funds
are concerned, they will continue to run and, therefore,
continue to be deferred, unless, of course, there is
reason not to defer them, but available for deferral
until an indefinite time.
Q
Secondarily, in the $4 billion package,
what part of that $4 billion would be effective in
fiscal 1975?
MORE
- 10 -
MR. ASH: In terms of the cash effect?
Q
Right.
MR. ASH: I don't know the exact number, but it
would be a small portion of it, less than $1 billion, I
am sure. That is the nature of these programs. They
generally are developed for the reason that the monies
couldn't or shouldn't be spent anyway, and, therefore,
they amount to very little cash even though there is
a fairly big amount of budget authority involved.
Q
The $20,000
you are proposing to
defer will not affect your $305 billion spending plans
for fiscal '75?
MR. ASH: The $305 billion spending plans
contemplated in the budget assumed that these amounts
would be deferred and rescinded as we are here proposing
and the action that we wish on these to gain Congressional
concurrence is to hold to that $305 billion, not to
reduce below the $305 billion.
Q
Sir, the point of my question is: What
are you proposing to cut below the $305 billion? I
believe that Mr. O'Neill made some remarks to that effect
or about these cuts yesterday. Could you spell them out?
MR. ASH: Let me talk about what will become
some time another set of deferrals and recissions and
other Congressional actions even beyond deferrals and
recissions. They are not in either of these packages,
either the $20 billion one or the $4 billion one.
The President is firmly committed to do
everything that he can to get expenditures below the
$300 billion. This will require Congressional action
or Congressional concurrence. Part of that action
and concurrence will be through deferral and recission
actions. The President is meeting with people of the
Congress individually and in groups.
He met Tuesday night of this week with a
number of Senate leaders for the purpose of engaging
them in a discussion of what programs and what actions
might best be taken to bring the total below
$300 billion.
Next week he will be meeting with Congressional
leaders. What we want to do first is to discuss with
Members of the Congress their views as to what kind of cuts
might well be made and with which they would concur to
bring the budget below $300 billion.
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These discussions are going, on. As a result
of them, there will be some contemplated actions. I
can't say exactly what dates that they will be proposed.
I can't even say exactly what they are because we are
having discussions with the Congress as to what they
might be, and this will depend upon the outcome of
those discussions that are going on even now.
MORE
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Q
Is the impression accurate, Mr. Ash,
that everyone seems to be getting every day from
these hearings that the cuts are going to come
essentially from your personal health-welfare type
program?
Q
What was Mr. O'Neill talking about yesterday?
MR. ASH: Let me answer the first question
here. The impression that you say that some people
are getting that they are all coming from or all the
cuts would come from personal programs is not a correct
impression.
All of the budget is subject to cuts, and
certainly defense is an area and foreign aid is an
area. Every program that the Government is involved
in is being considered for the reductions that are
possible as to those programs.
Now, it is true, though, that by far the
biggest part of what the Federal Government spends
money for is for entitlement programs, or programs that
benefit individuals, either direct payments to them
or alternatively payments to them, through State and
local government.
So, one cannot avoid looking at the biggest
part of the budget in dollars, even though there is no
more particular reason that cuts will be made there
than will be made in anything. A part of the discussions
with the Congress are for the purpose of determining
where the main thrust of cutting should take place, and
we would hope that we could have those cuts come down
in the most equitable places for all segments of society.
Q
Mr. Ash, have you found that to date
the new law has hampered in any way your ability to
make deferrals and recissions?
MR. ASH: No.
0
Sir, is there any concensus beginning
to emerge out of these talks as to any areas where
large cuts can be made? You have to cut $5 billion or
$6 billion out of something like $15 billion of
control over part of this.
MR. ASH: There is no concensus emerging yet.
I think the first concensus that is emerging is that it
is a very difficult thing to do, and we have to work at
some specifics, at the level of specifics that, of
course, are going to be subject to all kinds of
political concerns.
As to which program specifically should be
reduced, there is no concensus yet emerging.
MORE
- 13 -
Q
Mr. Ash, these programmatic changes and
policy changes that you will be recommending later on,
would they have any impact on some of these deferred
programs, deferred spending that you want Congress to
take action on now? In other words, will you be
cutting back permanently or rescinding permanently
some of this deferred spending?
MR. ASH: Of course, even the ones that are
now being deferred could well be candidates for
recission action sometime later. Only by way of
saying that the whole budget is open for examination,
there is no element of it that we are not looking at
for the possibility of budget reduction, either by
deferral or by recission.
All options are open at this moment, and
there isn't a concensus yet developed as to which
way we should go. So, I don't want to select out
any one area, other than to say every area is being
given very close scrutiny.
Q Mr. Ash, have you talked to the President
about your future and, if so, what has he said and
finally, do you expect to stay on in this Administration?
MR. ASH: I talked to him sometime ago, he
asked me to stay on, and here I am.
Q
You indicated that this HEW type spending
was the largest expenditure in Government and, therefore,
the largest cuts are in that area. The defense is
probably the second largest. Can we expect the second
largest cuts in that area?
MR. ASH: I didn't say that therefore we could
expect the largest cuts out of HEW just because it is
the largest expenditure. I did say that we all have
to recognize it is the largest expenditure, and as we
look across all of Government we can't avoid looking at
where the largest expenditures take place.
But in no way did I suggest that therefore
the largest would come out of HEW. If one is to look
at the total, one must look at the total, and the total
just happens to have a large element of HEW in it.
Q What we are driving at, can we expect
cuts beyond the ones that are needed in defense, and
how much?
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- 14 -
MR. ASH: All options are open at this
moment as to the next level of cuts. There isn't
any determination. The whole purpose of meeting with
the Members of the Congress is to get their sense of
where the cuts might best be made and might most
equitably be made and there is no position developed at
all as to which are the likely areas to carry the
greatest amounts of cuts.
Q
Mr. Ash, if I understand correctly, the
President will ask Congress for some supplemental
funds later on this year or early in January. How
would that square with him trying to cut the budget
below $300 billion?
MR. ASH: Quite often, as part of the
technical processes of handling the paperwork,
supplementals are submitted not to add funds on to
the budget, but merely to provide the proper appropriation
for funds already in the budget, in the $305 billion
in the budget as it exists.
Let's take the various kinds of mandatory
entitlement programs where the law requires that we
pay out certain benefits to certain beneficiaries.
We don't know until we get near the end of the year how
much the total might be.
We, therefore, submit to the Congress a
supplemental to provide the funds to do no more than
to meet the obligations already imposed on us by the
legislation that the Congress has enacted.
THE PRESS: Thank you, Mr. Ash.
END
(AT 11:02 A.M. EDT)