Statement by the President Announcing the Release of Deferred Funds for Federal Programs.

LAST SEPTEMBER, as part of an overall program to combat inflation, I announced my intention to defer and reduce $3 billion in Federal contracts, obligations, and commitments. As the result of intensive review later in the fall, a larger amount--some $5.2 billion Federal program funds--was deferred.

I am today instructing Federal agencies to release $791 million of those deferred funds. The areas affected are:

--special mortgage assistance for low-cost housing ($250 million)

--Federal-aid highways ($350 million)

--Farmers Home Administration loans ($71 million)

--local flood protection and other projects of the Corps of Engineers ($90 million)

--reallocation of Elementary and Secondary Education Act Title I grant funds ($30 million).

In fiscal 1967, budget expenditures out of these released funds will amount to approximately $105 million.

These programs provide important benefits for the American people. Otherwise, I would not have proposed, and the Congress would not have enacted them. The deferrals and reductions undertaken last fall were put into effect as a necessary means of reducing the overheating which then threatened the American economy--not because the programs themselves were in any sense undesirable.

The deferral of Federal contracts and the other economic measures adopted last fall have had the desired effect. Inflationary pressures have subsided. As a consequence it has been possible, in a careful and orderly manner, to release some of the funds which had been deferred. Earlier this year we released $175 million of highway funds and $380 million in special assistance for low-cost and multi-family housing. Today's action brings the total of funds released to about $1.4 billion, approximately 27 percent of the total amount of funds deferred.

I have instructed Federal agencies to make the release effective on April 1. This will leave time for planning, notification to States, and other necessary administrative steps. In one case--emergency loans to farmers who have been affected by disasters--the release will become effective immediately.

A list of the funds released by the action today, and by earlier actions follows:

RELEASE OF DEFERRED FEDERAL PROGRAM FUNDS