100. Memorandum From the Director of the Office of Management and
Budget (Ash) to President
Ford1
2
Washington, November 29, 1974
Subject:
- 1976 Budget decisions: National Aeronautics and Space
Administration
The agency request and my recommendations with respect to 1976 budget
amounts for the National Aeronautics and Space Administration are
presented in the tabulation attached (Tab A).
Three key issues have been identified for your consideration (Detail at
Tab B).
I. Space shuttle and manned space flight
alternatives
NASA is requesting $1,251 million in
FY 1976 for development of the space
shuttle—$451 million above the 1975 level as part of the orderly build
up of the program toward a 1979 first launch. Dr. Fletcher is, however, willing to accept
$45 million less in 1976, which can be accommodated by accepting some
higher degree of risk in the program.
The key question for FY 1976 is not just
additional funds for the shuttle, but whether the U.S. should continue its manned space flight program, with
the shuttle as its key element. In the issue paper attached, OMB recommends on balance that the manned
space flight program should be continued and that the shuttle is the
only feasible approach at this time. Assuming that the shuttle were to
continue, OMB would recommend a $396
million increase for the program—$10 million below NASA’s minimum request. This last $10
million reduction does not represent a programmatic recommendation but
rather a final step in reaching the OMB
planning ceiling, as discussed in section three of this memo.
Decision:
Approve agency recommendation [GRF initialed]
Approve OMB recommendation ________
See me
_____________
[Page 2]
II. Earth resources survey satellite
NASA has requested $14 million (in BA)
in 1976 to initiate a third Earth Resources Technology Satellite (ERTS-C) in FY 1976. The project would cost $50 million and would be
launched in September 1977 to follow directly on the ERTS-B satellite scheduled for launch in
January 1975.
OMB believes that the initiation of
ERTS-C should be deferred for
consideration at least a year because of overall budget stringency;
because we do not accept NASA’s
position that data continuity is required in order to carry out an
experimental earth resources program; and because we need additional
time to assess the real contribution of NASA’s earth resources program compared with other
technologies and user needs.
Decision:
Agree [GRF initialed]
Disagree
See me
III. Total NASA
allowance
NASA has taken the position that, aside
from ERTS-C, the overall level of the
OMB recommendation is insufficient
to allow the agency flexibility to carry out its approved programs.
OMB recognizes that its recommendations
for NASA in FY 1976 are tight and that NASA’s programs have been significantly reduced in previous
years—thus removing much of the agency’s ability to accomplish a general
belt-tightening. Never-the-less, we believe that the ceiling amounts
provided to NASA as the basis for
formulating its FY 1976 budget proposal,
represent a balancing of the overall priorities of the NASA program against the need for fiscal
stringency.
The OMB recommendation for NASA would allow a net increase of $227 million in BA and $237
million in outlays above the FY 1975
level to cover in part the effects of inflation and the increased
requirements for the space shuttle—offset by selected minor reductions
in a variety of other activities, not significantly affecting major
programs. Current differences between the
OMB and NASA positions are $87 million in BA and $58 million in
outlays which represent, respectively, 2.5 percent and 1.7 percent of
NASA’s recommended budget. The
estimated employment, impact of these differences is a loss of
approximately 3,000 contractor jobs spread throughout the country.
Decision:
Agree ____________
Disagree [GRF initialed]
See me ______
[Page 3]
Attachment
Issue Paper Prepared in the National Aeronautics
and Space Administration
Washington, November 29, 1974
Space Shuttle and Alternatives in the U.S. Manned Space Flight
Program
Statement of the Issue
Should the U.S. manned space flight
program be continued on its present course (including development of
the space shuttle), be redirected, or be cancelled?
Background
The space shuttle program was approved by President Nixon in January 1972 and is
currently the key developmental objective of the U.S. civilian space program. Current
plans are for the shuttle to be operational in the early 1980’s.
The total development cost of the space
shuttle is estimated to be $6 billion in FY 1975 dollars, of which about $900 million has been
spent to date.
OMB believes that the space shuttle
program, and the broader question of continuing the U.S. manned space flight program, should
be reconsidered in the FY 1976 budget
for the following reasons:
- - Cancelling the shuttle (and all manned space flight
activities) could potentially result in relatively large
near-term savings in the Federal budget (on the order of
$1.0-1.5 billion/yr.). Funding requirements for the shuttle
will be large (i.e., $1.2 billion/yr.) in the next several
years and will require increases in NASA’s budget.
- - Reconsideration of the space shuttle decision offers the
Administration an opportunity to visibly reorder national
priorities.
- - The value to the nation of continuing a U.S. manned space flight program
is a fair question. No urgent
civilian or military requirements have been identified for
the space shuttle.
In reviewing NASA’s FY 1976 budget, OMB requested NASA to
develop a position paper on the space shuttle and manned space
flight alternatives. (The classified NASA response is attached at Tab C.) The major points
are summarized below:
Why continue manned space flight?
NASA and other supporters, argue
the following case:
[Page 4]
- - That the long-term political and
international Position of the United States
requires us to at least keep abreast of the Soviets in terms
of manned capabilities in space.
- - That manned space flight is an integral part of the
overall U.S. efforts in space
and provides additional and unique
capabilities over those possible with unmanned
satellites.
- - That manned space flight provides a basis for national
pride and a medium for international competition and
cooperation.
Why develop the space shuttle?
NASA argues:
- - That the shuttle provides for a continuing U.S. manned
space program that is both cheaper than other
manned alternatives and is forward-looking in advancing
space technology.
- - That the shuttle will provide a means for cheaper and more effective utilization
of space for a wide variety of potential
applications
- - That the shuttle will provide new
capabilities for scientific and civilian
applications as well as for national defense
purposes.
Alternatives
- 1.
- - Continue NASA’s current
plans for developing the space shuttle, with initial operations
in the early 1980’s.
- 2.
- - Cancel the space shuttle and discontinue all U.S. manned space flights after the
Apollo-Soyuz docking mission is completed in July 1975.
- 3.
- - Cancel the space shuttle, but seek to develop a less
ambitious and lower cost means for continuing manned space
flight.
Analysis
This table provides OMB estimates of
the total cost of the civilian space program for the three
alternatives:
(Outlays in millions of constant FY
1976 dollars)
|
FY 75 |
FY 76 |
FY 77 |
FY 78 |
FY 79 |
FY 80 |
| Alternative 1 |
3,186 |
3,425 |
3,600 |
3,500 |
3,300 |
3,100 |
| Alternative 2 |
3,088 |
2,190 |
2,000 |
2,000 |
2,100 |
2,300 |
| Alternative 3 |
3,094 |
2,715 |
2,900 |
3,000 |
3,100 |
3,200 |
| Potential Savings (2-1) |
-98 |
-1,235 |
-1,600 |
-1,500 |
-1,200 |
-800 |
[Page 5]
The benefits of the manned space flight
program are largely intangible, involving, for example, maintaining
both the appearance and the fact of international technological
parity (particularly with respect of the Soviet Union).
Although future plans call for DOD
missions to be flown on the space shuttle, there are at present no
military missions that would require the unique
capabilities of the shuttle.
There are different views within DOD
whether or not the shuttle will be a cost-effective means for
accomplishing DOD missions. While
DOD has agreed to participate in
the space shuttle program defense has deferred any commitment of
major funds for shuttle hardware or facilities for several
years.
Whether at some future time the U.S.
might be required to react to Soviet manned activities in space
(i.e., some presently undefined reoccurrence of the Sputnik episode)
is problematical, as is the possibility that some future military
mission might develop which could use the unique capabilities of the
space shuttle.
The economic arguments presented in support of the shuttle are not
entirely convincing because they assume a very high level of future
space activity and a cost performance for the space shuttle which
may prove technically difficult to achieve.
Despite these concerns related to NASA’s current program planning assumptions, OMB can identify no clearly-preferable alternatives.
Cancelling manned space flight would be
difficult:
- - Would require a major resizing of NASA as an agency, including
closing several major facilities (there are now 10 major
NASA centers);
- - Would have a substantial impact on employment of
technical personnel (now totaling more than 30,000
industrial contractor employees plus about 10,000 civil
servants and 15,000 support contractor employees at the
three NASA manned space
flight centers).
- - Could have international implications for U.S./Soviet relations and for
U.S. joint cooperative
programs with the Europeans, who have committed $400 million
to the development of a Spacelab which will be flown in
conjunction with the shuttle.
Cancelling space shuttle without
cancelling all U.S. manned space
flight programs is a possibility but:
- - The options are not well-defined and may have the
disadvantage of being a step backward technically;
- - Some costs would have to be incurred to cancel the
shuttle, and in this option the manned space flight centers
would be maintained until a new program was initiated;
and
- - The potential cost savings of non-shuttle options may be
relatively small compared with continuing the
shuttle.
Delaying the space shuttle is also
possible but:
- - A major delay would not save much in the short term,
because we are too far into the program; and
- - Would add to the long-term cost of the program.
Recommendation
Our general recommendation is to continue with the development of the
space shuttle, but to avoid making any firm commitments to a specific completion date that might be
construed as providing a sense of urgency of high budgetary priority
to the development of the shuttle.
We believe that if a decision is taken to continue the shuttle
program, the funding should not be driven by an arbitrarily-defined
completion date. If major technical problems arise consideration
should be given to slipping the schedule rather than increasing
costs to hold to a given completion date. There is no urgency to
having the shuttle operational at any specific time.
At the same time, we also believe that shuttle funding should not
continue to be arbitrarily raised or lowered to meet changes in
economic conditions or in the budget climate, because of the
potential impact of such changes on NASA’s ability to effectively manage the program.
[Page 7]
Attachment
Issue Paper Prepared in the National Aeronautics
and Space Administration
Washington, November 29, 1974
Earth Resources Survey Satellite
Statement of the Issue
Should initiation of a third Earth Resources Technology Satellite
(ERTS-C) be approved in the
FY 1976 budget.
Background
NASA’s first Earth Resources
Technology Satellite (ERTS-A) was
launched in July 1972 and has completed more than two years of
successful operations.
The second (ERTS-B) is scheduled for
launch in January 1975 to continue experimentation, to provide
additional data for current users and to allow for the
implementation of several demonstration projects.
NASA is requesting $11 M (outlays)
in the FY 1976 budget for a third
satellite (ERTS-C) to be launched
in September 1977, when ERTS-B is
expected to fail. Total cost of ERTS-C including launch vehicle, is about $50
million.
During the past year substantive committees in both the House and
Senate have urged the Administration to initiate ERTS-C as early as possible,
principally to minimize any hiatus in data
from ERTS satellites.
OMB has testified before the same
congressional committees that a data gap would not be serious
because large volumes of data will be available from ERTS-A&B—and that in an experimental program such as ERTS, scarce resources are better
utilized in advancing technology rather than in guaranteeing data
continuity. Although some limited commercial use is being made of
ERTS data, Federal agencies do
not generally argue for continuity of data (beyond ERTS-B).
Analysis
Total funding for NASA’s Earth
Resources Program, including ERTS
satellites (in millions of dollars) is as follows:
|
|
FY 1975 |
|
FY 1976 |
|
BA |
Outlays |
BA |
Outlays |
| NASA Request |
61 |
60 |
62 |
66 |
| OMB Recommendation |
56 |
57 |
51 |
57 |
| Differences |
-5 |
-3 |
-11 |
-9 |
| Related Launch Vehicle Savings |
— |
— |
-3 |
-2 |
[Page 8]
As indicated in table above, NASA
(in addition to development of ERTS
satellites) is conducting a large supporting R&D program on advanced, higher performance
sensors, techniques for analysis and handling of data generated by
these satellites, and experiments for demonstrating applications of
the technology.
NASA Recommendation: The
agency strongly urges that ERTS-C
be initiated in FY 1976 on the
grounds:
- That improved instrumentation to be flown on ERTS-C represents a significant
advancement in the state of remote-sensing technology.
- That continuity of ERTS data, is
an essential aspect of developing and sustaining interest among
potential users.
OMB Recommendations:
OMB believes that there are major
uncertainties about the potential for ERTS technology (as opposed to other alternatives) and
that consideration of ERTS-C can be
deferred at least a year, particularly in view of the overall budget
stringency. The specific OMB
position is:
- - That the NASA
remote-sensing program is an experimental one, and that
continuity of data is not essential to demonstrating the
potential of ERTS
technology.
- - That a convincing case has not been made that users
would be adversely affected by a hiatus in ERTS data availability
- - That by accepting ERTS-C in the FY
1976 budget, we would be recognizing de facto the need for
data continuity and therefore set the stage for additional
larger and more expensive ($150 million) follow-on
satellites in FY 1977 and
subsequent years.
- - This could lock us in prematurely to an operational
earth resources satellite system before an adequate
opportunity is provided to examine the full needs of such a
system and the alternatives which are available.
[Page 9]
Attachment
Issue Paper Prepared in the National Aeronautics
and Space Administration
Total NASA Allowance
Statement of the Issue
Aside from issue on ERTS-C, should
NASA’s total FY 1976 allowance be held to the OMB planning ceiling level despite the
NASA Administrator’s view that
the 0MB ceiling is overly-restrictive to meet his program
commitments?
Background
Dr. Fletcher has maintained
consistently throughout consideration of his 1976 budget that the
0MB planning ceiling set last July for NASA is overly-restrictive in view of:
- - The rapidly increasing requirements of the space shuttle
and much higher than anticipated wage/price escalation in
the aerospace industry, affecting shuttle and other
programs.
- - OMB planning guidance
formally worked out between NASA and OMB
last winter under which OMB
agreed to recognize, and attempt to provide relief for,
future-year inflation in major NASA projects.
Dr. Fletcher’s view is that
OMB has not honored this general
agreement in establishing the tight FY 1976 planning ceiling for NASA, and in now recommending that NASA be held to the planning
ceiling.
NASA’s FY 1976 budget submission for 1976 recognizes the need
for a constrained total Federal budget and therefore Dr. Fletcher, under his minimum budget
proposal has:
- - Held down increasing BA and outlay requirements for the
space shuttle by $45 million (without slipping the
schedule).
- - Deferred all new major
projects proposed for initiation in 1976.
These NASA actions still leave the
NASA budget over ceiling by $97
million in BA and $70 million in outlays.
Dr. Fletcher takes the
position that if it were necessary to meet the OMB planning ceilings for NASA:
- - A major approved scientific flight project,
Pioneer-Venus orbiter and probes, would have to be
cancelled, or
- - The space shuttle schedule would have to be further
slipped, and
- - If either action were required he would want to discuss
the implications with the President.
[Page 10]
OMB has been generally skeptical of
the position that the approach suggested by NASA is the only way to meet
the 0MB planning ceiling; instead OMB recommends an alternative
solution which neither cancels Pioneer-Venus nor slips the
shuttle, but rather makes selective reductions not significantly
affecting major programs.
Analysis
The current situation is as follows:
|
BA |
Outlays |
| NASA Recommended Budget |
3,639 |
3,550 |
| Less Reductions identified by NASA |
-95 |
-50 |
| Less 0MB Reductions Accepted by NASA |
-19 |
-14 |
| NASA Current Position |
3,525 |
3,481 |
| OMB Recommendations |
3,438 |
3,423 |
| Differences |
+87 |
+58 |
NASA
Recommendation: With the exception of two OMB reductions (i.e., construction of
facilities and NASA support
contractor manpower), NASA states
that no further reductions below its minimum budget case would be
acceptable. NASA argues that:
- - The planning ceiling was set too low and that OMB recommendations for meeting
the ceiling are arbitrary and harmful to the NASA program.
- - The NASA budget has
been squeezed year after year and no flexibility remains in
the budget.
- - Accepting the OMB
recommendations would reduce NASA-related employment by about 3,000 jobs
nation-wide.
OMB
Recommendation: OMB
recognizes that NASA was given a
tight planning ceiling, but that:
- - NASA’s ceiling
represents a fair balancing of the priorities related to
NASA’s programs and the
overall need for budgetary stringency.
- - The OMB recommended
reductions can be implemented without significant harm to
NASA’s programs, if
overall fiscal considerations require it.
- - That whatever the outcome of this issue, the ERTS-C decision should be
addressed separately on its particular merits.
