Statement by the President on Cost Reduction by the Government During the First Three Months of 1965.
THIS IS the sixth time in the last year and a half that agency heads have reported to me on their efforts to reduce costs and improve operations. Some people have said that we have skimmed off the cream and that further savings will be harder to get. I think this quarter's results show just the opposite. They are most impressive. I am particularly pleased to note that we are beginning to strike pay dirt in savings that result from improvements in program accomplishment. Up to now most of our savings have come from better administration: this quarter $141 million of the savings-more than half result from improvements in the way in which agencies go about meeting their objectives. The potential for further savings in this area is very great.
Note: The statement was part of a White House release making public the President's announcement that the cost reduction actions of Federal civilian agencies during January, February, and March would result in savings of $217 million in fiscal year 1965. This, with previously reported savings of $289 million for earlier quarters, the release stated, would bring the total for the first three quarters of the fiscal year to more than $500 million. The release noted that these savings were in addition to those in the Department of Defense resulting from Secretary of Defense Robert S. McNamara's cost reduction program, estimated to be $2.5 billion in fiscal year 1965 and $4.1 billion in fiscal year 1966.
In announcing the third quarter results, the release also stated, the President cited several examples which illustrated the broad range of agency cost reduction efforts, as follows:
--Through negotiations conducted by the Rural Electrification Administration of the Department of Agriculture, a newly formed electric cooperative was able to secure 5-year contracts to provide wholesale power at favorable rates from a private utility company. This made a $15 million REA loan unnecessary with no loss to REA program objectives.
--The Atomic Energy Commission found it necessary to make an aerial survey of one of its plants. AEC and the Army were able to work out an arrangement whereby the survey could be made by a military helicopter during a routine training flight. This saved $1,050.
--By suggesting modifications in highway plans submitted by States in connection with the Federal aid highway program, the Bureau of Public Roads of the Department of Commerce was able to reduce the costs of current road building projects by $28,900,000 without sacrificing prescribed standards of quality.
--The Post Office Department developed and distributed to all first-class offices a vacuum cleaning tool that will reduce by 75 percent the time spent in cleaning pigeonhole cases used by clerks to sort mail. Savings will be $80,000 in FY 1965 and $250,000 per year thereafter.
--By using seismic equipment in place of earth augers, the Tennessee Valley Authority has reduced the cost of determining depth to rock at potential dam sites by 75 percent. This will save $10,000 a year.
--The Atomic Energy Commission has worked out an arrangement whereby expensive equipment-such as machine tools, radar tracking devices, armor plate, trucks, trailers, and cranes--can be transferred among field offices, contractors, and other Federal agencies. Savings of $1,436,000 will result through decreased equipment purchases.
Lyndon B. Johnson, Statement by the President on Cost Reduction by the Government During the First Three Months of 1965. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/241412