BUDGET RESCISSIONS AND DEFERRALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01009A003100020040-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: January 4, 2017
• Document Release Date: March 5, 2008
• Sequence Number: 40
• Publication Date: September 20, 1974
• Content Type: MEMO

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September 20, 1974
SUBJECT: Budget Rescissions and Deferrals
I have today sent to the Congress my first special
message under Title X of the recently enacted Con-
gressional Budget and Impoundment Control Act of
1974. A copy of that message is attached.
The package I have submitted contains reports on
budget authority totalling $20.3 billion. Included
among these items are some which are not covered by
the new Act, but release of virtually any of them
would lead to spending above that contemplated by
the FY 1975 Budget.
Gaining congressional support for the items contained
in this transmittal, and for those I will be sending
up in the future under this Act, is absolutely vital
if we are to make any headway against inflation by
controlling Federal expenditures. This Government
must set an example of fiscal restraint for the people
of America and the world.
Each of you knows my position on cutting back below
1975 Budget levels. I need your strong assistance in
supporting this first critical step, and thL others
that follow, to meet our budgetary goals. I know I
can count on you to work closely with the Congress
in order to gain the necessary acceptance of the
deferrals and rescissions I propose today and in
the future.
NSC review completed.
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FOR IMMEDIATE RELEASE SEPTEMBER 20, 1974
Office of the White House Press Secretary
THE WHITE HOUSE
TO THE CONGRESS OF THE UNITED STATES:
The recently enacted Congressional Budget and
Impoundment Control Act of 1974 provides new procedures
for executive reporting and congressional review of actions
by the executive branch affecting the flow of Federal
spending. It thereby serves to make the Congress a full
partner in the continuing struggle to keep Federal spending
under control.
The new law provides that the executive branch may
seek to alter the normal course of spending either through
deferrals of spending actions or by asking the Congress to
rescind authority to spend. The use of funds may be
deferred unless either House of the Congress enacts a
resolution requiring that they be made available for
spending. For executive rescission proposals to take
effect, the Congress must enact rescission bills within 45
days of continuous session.
Following these procedures, I em today reporting the\/
first in a series of deferrals and proposed rescissions.
As is often the case in the institution of new pro-
cedures, and in the implementation of new laws, there are
questions as to what the law may require of the executive
branch and what the Congress may expect. In this instance,
the Attorney General has determined that this act applies
only to determinations to withhold budget authority which
have been made since the law was approved.
However, I am including in today's submission to the
Congress reports on some actions which were concluded before
the effective date of the act. While these items are not
subject, in the Attorney General's opinion, to
congressional ratification or disapproval as are those
addressed in the recent law, I believe that it is appro-
priate that I use this occasion to transmit this
information to the Congress.
Reasonable men frequently differ on interpretation
of law. The law to which this message pertains is no
exception. It is particularly important that the execu-
tive and legislative branches develop a common understanding
as to its operation. Such an understanding is both in
keeping with the spirit of partnership implicit in the law
and essential for its effective use. As we begin manage-
ment of the Federal budget under this new statute, I would
aporeciate further guidance from the Congress. The added
information on the status of funds not subject to Congres-
sional action is being made available with this in mind.
It will also permit a better understanding of the status
of some funds reported previously under the earlier
_ipoundment reporting law.
Virtually all of the actions included in this report
were anticipated in the 1975 budget, and six of them were
taken before July 12, when the new procedures came into
effect. Failure to take these actions-would cause more
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than $20 billion of additional funds to become available
for obligation. The immediate release of these funds
would raise Federal spending by nearly $600 mill-on in the
current fiscal year. More significantly, outlays would
rise by over $2 billion in 1976 and even more in 1977, the
first year in which the new procedures for congressional
review of the budget will be in full effect.
The deferrals of budget authority being reported
today total $19.8 billion. The major deferrals are:
-- Grants for waste treatment plant construction
($9 billion). Release of all these funds would
be highly inflationary, particularly in view
of the rapid rise in non-Federal spending for
pollution control. Some of the funds now deferred
will be allotted on or prior to February 1, 1975.
- Federal aid highway funds ($4.4 billion for
fiscal year 1975 and $6.4 billion for fiscal
year 1976). Release of these funds would also
be highly inflationary and would have to be
offset by cuts in higher priority programs.
Some of the funds are being withheld pending
resolution of court cases concerning the environ-
mental effects of proposed highway construction.
-- Various programs of the Department of Health,
Education, and Welfare ($39.6 million). Pending
enactment of the 1975 appropriations, HEW funds
are being provided under a continuing resolution.
Amounts available under the continuing resolution
above the budget request are deferred to preserve
the flexibility of the Congress and the
Administration in arriving at a final decision
on the funding levels for these programs.
The larger of the two rescissions which I am proposing
would write off the $456 million of budget authority pro-
vided for rural electric and telephone loans at a 2 percent
interest rate. The release of these funds would be incon-
sistent with the legislation enacted in 1973, which limits
the availability of 2 percent loans to cases of special need.
Loans to borrowers who meet the specified criteria can be
financed out of funds provided by the pending Agriculture
Appropriations Act.
The deferrals and rescissions covered in this first
report are those believed to be of particular interest to
the Congress and which would have significant impact on
budget spending if released. They are summarized in the
attached table. A second report of a series on additional
deferrals and rescissions will be submitted to the Congress
soon.
Budgetary restraint remains a crucial factor in our
efforts to bring inflation under control. In today's
environment, we cannot allow excess Federal spending to
stimulate demand in a way that exerts further pressures
on prices. And we cannot expect others to exercise
necessary restraint unless the Government itself does so.
The responsible apportionment of congressional
appropriations and other Federal budget authority is an
essential -- though often controversial -- element of
budget execution. Sound management principles and common
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sense dictate that Federal agencies spend money in an
orderly fashion and only to the extent necessary to carry
out the objectives for which the spending authority was
provided. Current economic conditions require extra care
to assure that Federal spending is held to the minimum
levels necessary.
The deferrals and rescissions described in the attached
report represent an essential step toward the goal of re-
ducing spending and achieving the balanced budget we seek
by fiscal year 1976. These actions, by themselves, will
not be enough. However, failure to take and sustain this
important step would jeopardize our ability to control
Federal spending not only during the current fiscal year
but, more importantly, for several years to come.
THE WHITE HOUSE,
September 20, 1974.
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SUMMARY
PROPOSE F.ESCISSIONS AND DEFER ALS
(dollars in thousands)
Budget
Item AuUiority
:;es cis s ions:
A?F alacJaian regional Development Progra-~s
Airport Construction-' ..................... 40,000
h,riculture: Rural Electrification
A ministration: Loans ................... 455,635
Deferrals:
To be deferred part of year:
Corps of Engineers - General construction... 103
Health, Education and Welfare:
Library resources ......................... 5,437
idgher education:
(University communit services)......... 2,905
(Land grant colleges). 9,500
(State )ostsecondary education commissions). 350
School assistance in federally affected areas. 36,030
i..ehabilitation services (innovation
and expansion) ..... .. ..... 5,030
Public assistance {child welfare services)... 375
Environmental Protection Agency:
9,000,000
Construction. :rants* .........................
General 'Services Administration:
Automatic data processing fund .............. 4,300
To be deferred for entire year:
Agriculture: A-riculture research
service (Construction)* ....................... 770
Commerce: Fisheries loan fund* .................. 4,039
Interior:
C,regon and California Grant lands* ............ 23,693
Construction and rehabilitation ............... 1,055
Upper Colorado River Basin fund ............... 1.,150
.tate: international Center, Uashington, D.C...... 500
Transportation: Federal-aid highways
1975 & prior programs....... 4,370,090
1976 program ................ 6,357,500
Foreign Claims Settlement Cora fission:
Payment to Vietnam prisoners of war .............. 10,500
General Services Administration:
Auto'Liiatic data processing fund ................... 14 , 000
Total .............................................. 20,322,t'CC
*Action taken prior to enactutent of the Impound-nent Control
Act on July 12, 1974.
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EXECUTIVE SECRETARIAT
Routing Slip
1 Remark
ACTION
INFO
DATE
INITIAL
1
DCI
2
DDCI
3
S/MC
4
DDS&T
5
DD1
6
DDM&S
7
DDO
8
D/DCI/IC
9
D/DCI/NIO
10
OGC
11
OLC
12
IG
13
Compt
14
D/Pers
15
D/S
16
DTR
17 {
Asst/DCI
118
AO/DCI
19
20
21
22 I
j X62 ~2 Ix
Z
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