MSA–FOA Director’s files, FRC 56 A 632, box 1, “Bureau of the Budget 1953”
The Director of the Bureau of the Budget (Dodge) to the Acting Director of Mutual Security (Rand)1
My Dear Mr. Rand: The results of the 1954 special budget review fall substantially short of the administration’s budgetary objectives.
Accomplishment was limited by the short time within which the review had to be made, the inherited commitments, the inflexible requirements of legislation controlling many programs of substantial cost, and the review taking place coincident with the problems of establishing new administrative organizations. Consequently the reductions which it was possible to propose to Congress represented only the first estimate of what can be accomplished and cannot be accepted as satisfactory goals for actual results in the 1954 fiscal year.
To achieve the budgetary objectives, every possibility of further reductions in expenditures must be explored. Actual expenditures for 1954 have to be brought well below the levels contemplated in the revised budget, and projected expenditures for fiscal year 1955 will have to be reduced still more. The job has only begun—it is not done.
Judgment on progress will be predicated on progressive reductions in the rate of expenditure and the level of government employment. These two measures of accomplishment will be receiving constant public attention.
In the policy letter of February 3, 1953,2 each department and agency head was asked to consider eliminating all unnecessary programs and reducing or holding the remainder to minimum levels. It is essential that you give this review your active and continued personal attention.
Further substantial savings primarily will result from the continuous examination of existing programs and activities in terms of elimination, consolidation, and simplification. There are many areas in which immediate administrative action can be taken to accomplish changes resulting in reductions in expenditures where no change in existing legislation is necessary. There are others in which changes can and should be made to accomplish budgetary savings that will require changes in legislation. In the latter case, proposals for these changes in legislation should be submitted to [Page 628] the Bureau of the Budget as promptly as possible for appropriate clearance.
The results of the initial review of the fiscal year 1954 budget should be used to the maximum extent possible in preparation of the fiscal year 1955 budget estimates. In the review, many areas of future savings were identified which could not be made immediately effective because they will require negotiation not possible within the time limits involved or require changes in legislation. Action to implement these possibilities should receive prompt consideration and there should be added to them any further possibilities which have been or can be developed.
You are reminded that under the normal budgetary process the preparation for development of the fiscal year 1955 budget will begin immediately. This will include an appraisal of the projected budgetary situation, a determination of objectives, the tentative assumptions and policies related to their accomplishment, and the analyses preliminary to establishing fiscal year 1955 ceilings for new obligational authority and expenditures. These are prepared for submission to the President as a preliminary to advising heads of the departments and agencies of the considerations governing the preparation of their fiscal year 1955 budget.
Sincerely yours,