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CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES,
COMMITTEE ON APPROPRIATIONS,

Washington, D.C., March 25, 1971.
Mr. HERBERT LUNDY,
Editor, Editorial Page, The Oregonian,
Oregonian Building, Portland, Oreg.

DEAR MR. LUNDY: Congratulations on your editorial of Friday, March 19. I particularly want to express my appreciation for your bringing to the attention of the people in the Northwest the decision-making operation of the OMB which was formerly the Bureau of the Budget. What people have no idea about is that many second-rate bureaucrats are determining the economic policies of the United States.

For example, today in a hearing of the Geological Survey which handles the details of all funding of oil exploration, knowledge, and knowhow for guidance on leasing policies on millions of acres of off-shore oil land, I was told by the Director of the Geological Survey, Dr. Pecora, that although the government has received $6 billion in direct payments to the Treasury, which has gone into the fiscal life of the United States, only $10 million has been spent in the management by the Department for surveys, et cetera, and this figure is only as large as it is because during the last few years I have placed in the record of hearings some rather scalding remarks about the Bureau of the Budget providing sufficient money to safeguard the public's interest in the field of oil leasing.

It is unconscionable that this nation is denied the proper economic fruits and the proper management of its own resources because of prejudiced persons, some prejudiced against certain areas or are biased for certain other areas and who can, for all I know, be prejudiced pro or con in the industrial world.

This year for example the research amounts for Forest Service are miserably small in spite of the fact that increasing research is the answer to some of our timber management and recreation use problems.

Ours is the most short-sighted nation in the world to allow a Civil Service bureaucracy with no responsibility to the electorate at all to manage affairs that may well decide the life or death of this nation or areas of this nation. I have been appalled in the eight years that I have been on the Interior Committee of Appropriations at our shortsightedness and for five years I have fought a battle against this kind of fiscal dice shaking.

In another category: there are pronouncements, statements, and rhetoric about bettering the conditions of Indians, yet the Bureau of the Budget repeatedly denies funds that will benefit their economic lives through betterment of their natural resource picture. Through my own personal struggle I have succeeded in building a fish hatchery for the Quinaults, which is of major importance to their economy and to all fishermen in the Northwest. Warm Springs has a fish hatchery, waiting for funding. Nothing is in the current budget. When I add money to appropriations bills the Bureau of the Budget places these items in the "deep freeze". In other words, they give it a line item veto.

Mr. Lundy, the situation is so grave that some of us fear the Bureau of the Budget can well be our total national undoing. I hate to be so blunt, and I am not bitter, but I am disturbed and any thoughtful, rational person can't help but be concerned, so I do appreciate your editorial. With my warmest personal regards, I am, Yours most sincerely,

JULIA BUTLER HANSEN, M.C. [From The Oregonian, Mar. 19, 1971]

BACKROOM SABOTAGE The counter-proposal of the Office of Management and Budget to the regional group headed by Gov. Dan Evans of Washington for resuming operation of the dual-purpose, plutonium-and-power system at Hanford is clearly unacceptable.

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It would require every contract customer of the Bonneville Power Administration to agree to a wholesale power rate increase of from 20 to 25 per cent to get the 800,000-kilowatt production of the Hanford nuclear plant back into the power pool, where it is shared 50-50 by publicly owned and privately owned utilities.

This is beyond the realm of imagination. Why, for example, should a small public utility district or municipal system which has “preference and priority" in federal power be forced to pass on to its consumer members a big rate increase ordered by an arbitrary federal bureau? There would be other "no" answers, as well.

The OMB didn't do its homework before rejecting Gov. Evans' offer, on behalf of the sponsors of the Hanford nuclear power plant, of $15 million a year for the steam which is a by-product of plutonium production and demanding approximately $31 million. The larger sum, OMB figured, could be obtained by the simple procedure of a rate increase by BPA. But BPA is required by law to open its contracts for rate increases no oftener than every five years, and the next opening is in 1974. The Federal Power Commission is required by law to approve or disapprove BPA rate changes.

In other words, BPA cannot require its customers to pay more than their contracts call for whether or not Hanford generation is resumed. And if it can't raise rates it would run into a deficit. Its net earnings last year were about $5 million.

The OMB's order to the Atomic Energy Commission to shut down the N. reactor at Hanford made no sense in the first place, inasmuch as the government will continue to produce plutonium at other sites—and without the revenue from surplus steam.

Besides being a policy-making decision by a bookkeeping office which threatens an entire region with a worse power shortage than already in sight, the order violated the contract AEC signed with the Washington Public Power Supply System. This required adequate notice to WPPSS before any suspension of the steam supply. The over-night cancellation also countermanded the decision of Congress authorizing the public-private-federal partnership project.

The order is not, however, inconsistent with the past performance of OMB under its former name, the Bureau of the Budget. For years a second-level, decision-making structure of the budget makers has sought by every tricky device it can dream up to force higher electric power rates in the Pacific Northwest. Just why this is true is difficult to find out. But the industry knows it and so does every member of Congress from the Northwest who has taken the time and trouble to fight destructive budget gimmicks.

In plain words, the Office of Management and Budget has long been engaged and is increasingly engaged in policy making for the executive branch which does not even hesitate to subvert congressional decisions. It's a ridiculous and a nasty situation. It is beyond our understanding why the President does not correct this usurpation of power which is done under his name and often without his knowledge.

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,

OFFICE OF THE SECRETARY.

Washington, D.O., August 4, 1969. Hon. SAM J. ERVIN, Jr., U.S. Senate, Washington, D.C.

DEAR SENATOR ERVIN: In accordance with the Secretary's interim response of March 3, we are submitting the following report pertaining to your request for information concerning Presidential or executive impoundment of appropriated funds.

In developing a response to your inquiry, the Department of Health, Education, and Welfare has made a comprehensive search of its apportionment rer ords dating back to its inception in 1953. As a general rule, reserves which were established during the period 1953-1969 fall in one of the following categories:

1. Temporary reserves to assure that funds would be available when needed for such things as individual construction projects or the initiation or enlargement of a given program or activity.

2. Reserves to comply with a specific requirement in law, notably reserves established for fiscal years 1968 and 1969 to fulfill requirements of H.J.R. 888 and Public Law 90-364.

3. Reserves established by the Department in its apportionment requests to comply with Presidential directives to reduce costs, combat inflation, etc.

The President's program to combat inflation conducted in fiscal year 1967 would fall within the last category. Under this program, the Department placed $277,135,000 in reserve in its apportionment requests. Since this action was taken in compliance with Presidential directives, these reserves might be considered appropriate for inclusion under category (1) of your request : reserves established by the Bureau of the Budget, in the name of the President, which affected specific programs or projects. However, we would emphasize that the selection of the specific programs and projects and determinations of the individual amounts involved were made by the Department and not by the Bureau of the Budget. Otherwise, on its own initiative, the Bureau of the Budget put no funds in reserve in connection with this particular anti-inflationary effort. We would be happy to furnish a detailed listing of these reserves if you so desire.

Our review reveals one instance involving the National Cancer Institute where funds were placed in reserve in fiscal year 1957 contrary to the wishes of the Department. The Bureau of the Budget, acting under the authority of the Anti-Deficiency Act, established a reserve of $29,800,000 against the National Cancer Institute's initial apportionment request of $48,432,000. This action only allowed apportionment of funds for the first two quarters of the fiscal year. Through subsequent actions, including approval of additional apportionment requests by the National Cancer Institute, the Bureau of the Budget reduced the reserve to a final amount of $5,573,000 on June 14, 1957.

I hope this information is sufficiently responsive to the question you have raised. If I may be of further assistance in this matter, please do not hesitate to contact me. Sincerely yours,

JAMES F. KELLY, Assistant Secretary, Comptroller.

U.S. DEPARTMENT OF THE INTERIOR,

OFFICE OF THE SECRETARY,

Washington, D.C., July 8, 1969. SAM J. ERVIN, Jr., Chairman, Subcommittee on Separation of Powers, Committee on the Judiciary, U.S. Senate, Washington, D.C.

DEAR SENATOR ERVIN: This has further reference to your letter of February 3, 1969, and our reply thereto of February 14, 1969, regarding budgetary reserves established by the Bureau of the Budget against Department of the Interior appropriations since 1945.

There is enclosed for your information statements prepared by the various bureaus of the Department showing budget reserves established against certain funds under their control for the fiscal year indicated on the reports.

It will be noted that our reports do not include information for the entire period 1945 to 1969. Even with information obtained from Federal Record Centers we are unable to furnish data relating to reserves for certain periods because pertinent agency records are no longer available. Such records were disposed of pursuant to authority from the General Services Administration issued under the Record Disposal Act (44 U.S.C. 369).

With respect to the reserves established under your categories 1 and 2 we believe that you will realize that it is difficult and not always possible for us to know specifically whether reserves were established by the Bureau of the Budget in the name of the President or were established as in your items 3 and 4 by the Bureau of the Budget under its authority as contained in the Anti Deficiency Act. In the various bureau reports enclosed we have used our best judgment based on the information available and we cannot guarantee that the items as shown are in all cases correct.

The amounts shown under examples 3 and 4 would be amounts reserved primarily because actual carryover balances of prior year appropriations es. ceeded the amount estimated to be available in the budget submission, savings. delays in prosecuting program or projects, and in some cases advance contract authorizations. Sincerely yours,

GEORGE E. ROBINSON, Deputy A88istant Secretary for Administration.

DEPARTMENT OF THE INTERIOR-STATEMENT SHOWING BUDGET RESERVES FOR PERIOD FISCAL YEARS 1945

THROUGH 1969
BONNEVILLE POWER ADMINISTRATION

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1 $19,000,000 in reserve at end of year. This reserve was part of fiscal year 1942 and 1943 appropriations held in reserve as a result of war restrictiors. No appropriations were made for fiscal year 1944, 1945, and 1946. These programs were financed from reserves for obligation in succeeding fiscal years.

2 $1,472,069 in reserve at end of year. Same explanation as footnote No. 1.

3 An additional $230.023 was in reserve at the end of the year. This amount was not included in catagory 3 because it represented appropriation for contract authorization which exceeded obligations.

4 $5,063,000 in reserve at the end of the year. $5,000,000 of this amount was withheld to comply with Senate requirements regarding the Intertie corstruction (S. Rept. 746).

5 $45.000 in reserve at the end of the year. $245.000 placed in reserve for reductions imposed by House Joint Resolution 888. $200,000 was released by 2d supplemental appropriation bill, 1968.

6 $1.475.500 was in reserve at the end of the year. $1,000,000 was withheld pending fulfillment of stipulations for the Southern Idaho Service line, and $475,500 was in reserve in response to House Joint Resolution 888. This $475.500 was included in the 2d supplemental request for appropriations, 1968, but deleted by congressional action.

7 Latest apportionment schedule (dated Jan. 16, 1969) reflects $643,000 in reserve pursuant to sec. 201 of Public Law 90-364. Release of these funds is required to finance pay increases not budgeted in fiscal year 1969.

8 Latest apportionment schedules (dated Jan. 16, 1969) reflects $998,000 under the same provisions as footnote 7.

U.S. DEPARTMENT OF THE INTERIOR,

GEOLOGICAL SURVEY,

Washington, D.C., March 14, 1969. Memorandum to: Acting Director of Budget. From : Geological Survey. Subject: Report on budgetary reserves established by the Bureau of the Budget.

The enclosed report is being submitted in response to your memorandum of February 24.

The General Records Schedule 5 issued by General Services Administration, pursuant to the Records Disposal Act (44 U.S.C. 369), authorizes the disposition of agency apportionment and reapportionment schedules, “2 years after close of fiscal year involved". Under the circumstances we have no way of determining the completeness of the enclosed report, other than for the most recent years.

F. G. USHER, Budget and Finance Officer.

GEOLOGICAL SURVEY-STATEMENT SHOWING BUDGET RESERVES FOR PERIOD 1945 THROUGH 1969 FISCAL YEARS

[In thousands of dollars)

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1945-50:1
1951:

Construction and rehabilitation ...
General investigations .....
General administrative expenses ..

Operation and maintenance :.. 1952:

Construction and rehabilitation...

General investigations
1953: Construction and rehabilitation,
1954, Construction and rehabitation...
1955:5 Construction and rehabilitation..
1956: Construction and rehabilitation...
1957:5

Construction and rehabilitation.....
Upper Colorado River Basin fund...

General investigations. 1958:5

Construction and rehabilitation

General investigations... 1959:1

Construction and rehabilitation.
Loan program....

General investigations....... 1960:

Construction and rehabilitation...
Upper Colorado River Basin fund..
Loan program..

General investigations.... 1961:4

Construction and rehabilitation..
Upper Colorado River Basin fund.
Loan program...

General investigations... 1962:

Construction and rehabilitation..

Loan program... 1963: Loan program. 1964:

Construction and rehabilitation
* Loan program .......
1965:

Loan program?.......
Construction of recreational and fish and wildlife
facilities

-. .... 1966:7

Loan program...
Emergency fund...

15, 424, 478

105, 700 11, 360, 662 4,230, 209 5, 221, 330 1,689, 103 18,678, 996

800,000

150,000 1, 368, 595

514, 121 639, 572 419, 318

22,607 1,074,628 26,500,000

419, 318

32,435

577, 216 18,517,740 1,014, 446

12, 435

79, 074 1, 369, 880

60, 148

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1900.

TI

680,000 427, 120

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