Memorandum on the Budget Preview and Program Planning for Fiscal Year 1967.

Memorandum for the Cabinet and Heads of Agencies:

Congress is still working on the 1966 Budget. The start of the next Fiscal Year is still several weeks away. Abroad and at home there are many situations to distract us. But it is imperative, I believe, that we begin giving attention to the long view of responsibilities we must face and the Nation must meet if we are to hold to our successful course.

The Budget Director has sent you letters of instruction for the 1967 Budget "preview." This exercise has been carried on annually by the Executive Branch for many years. However, under this Administration-last year and this year--we have been trying to change it from an exercise in numbers to an exercise in ideas, in judgment, in priorities; in short, to an examination in depth of what we are doing currently and we ought to be doing in the future.

I attach the greatest significance to this Budget "preview." It will be an important assist in the development of our 1966 legislative program. Our decisions now--and the directions that follow from those decisions-will be of the utmost consequence to full realization of the gains for which the foundations have been laid. Accordingly, I want to share with you in this memorandum some of my own thoughts and perspectives, as well as offering specific suggestions and directions for your procedures.

1. We are nearing the end of the important first phase of our efforts. In this period, we have

--cleared the agenda of much of our Nation's long unfinished business;

--consolidated the domestic gains of the past 30 years;

--made dear our intent and capability to support the continuing quest for peace with honor and freedom with security around the world;

--established firmly the standard that fiscal prudence and governmental self-discipline encourages rather than retards imperative social progress;

--identified and analyzed many of the major problems facing our Nation and struck boldly and successfully at old problems with new programs.

2. Now, a second phase of our effort is about to begin. I believe it will be more arduous and exacting than the first but perhaps more rewarding in terms of tangible and measurable progress and accomplishment. We must

--continue to identify and seek fuller understanding of the complexities, challenges and changes of our dynamic society, calling upon the resources of our finest minds to examine our course critically and to help our search for precise and responsive answers.

--devise imaginative programs to solve the tangled problems of our complex society in regard to transportation, air and water pollution, urban affairs, and other fields while never neglecting the challenge of helping the individual to maintain identity and find fulfillment in a society which respects both his rights and his promise.

--maintain our continuing effort to serve the broader national interest, against obstacles erected by old bias, prejudice, custom, inertia, or narrow interest.

--continue to streamline and modernize the operation of the Federal Government.

--and, all the while, search, recognize and move with dispatch to fulfill every opportunity presented for strengthening peace, freedom and understanding among all nations.

3. I believe the next legislative program must make important progress toward enriching the quality of American life and strengthening our capacity for leadership among peoples devoted to the ideals of a just, decent and peaceful world. We have done much this year and last to keep our Nation prosperous and to open opportunity to all our people. This effort is basic to all we undertake. But our sights must remain high and our dedication to excellence and superior achievement must grow as a deepening commitment. Imagination and innovation will be required in all aspects of our program and our service to the people of this land.

At the Cabinet meeting of last November 19, 1964, we agreed that every Federal Agency must make a major effort in two directions:

First, formulating imaginative new ideas and programs and

Second, carrying out hard-hitting, tough-minded reforms in existing programs.

Obviously, the initiative and imagination we exercise now will provide an important first ingredient for next year's legislative program.

For that reason, I want each of you-

1. To take a personal hand in the budget preview exercise, because only the Agency Head has the overall view that is needed.

2. To review carefully possible alternatives for your on-going activities and new proposals, to evaluate their effectiveness in meeting the objectives intended.

3. To identify and analyze the lower priority 10 percent to 20 percent of your budget, even though you might still think it is essential. We must consciously pass judgment at frequent intervals on the things we are doing to be sure that we are not wasting resources on outmoded programs which once may have been essential but which time and events have overtaken.

The time schedule established for the 1967 preview is very tight. I urge you to press ahead with this work immediately so that issues may be considered carefully and intelligently, unhampered by pressures that grip us immediately before the Congress convenes each year. It is imperative that you meet the time schedule set by the Budget Director so that we can all know the problems, issues, ideas, and possible alternative approaches early--even if you have not had the time yourselves to think them through to a clear and final recommendation.

I ask also that you insist that your staffs consider the issues objectively free from what they think may be overriding political obstacles to constructive change. I want to pass judgment personally on such alleged political obstacles.

At this early stage of budgetary planning let me ask and urge that you not spend a great deal of time refining cost figures and dollar requirements. Shaving dollars is important, but that comes later. After this program review is completed, I shall consider the Fiscal and Budgetary policy issues and give the Budget Director my views on the 1967 Budget. He will then provide you with the guidelines you should use in preparing your formal budget submissions.

LYNDON B. JOHNSON