REDUCTIONS IN 1982 NEW COMMITMENTS FOR FEDERAL LOAN GUARANTEES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84M00395R000100010014-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: March 9, 2007
• Sequence Number: 14
• Publication Date: November 5, 1981
• Content Type: MEMO

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Attachment
THE WHITE HOUSE
November 5, 1981
MEMORANDUM FOR: Secretary of Defense
Secretary of the Treasury
Secretary of Agriculture
Secretary of Commerce
Secretary of Health and Human Services
Secretary of Housing and Urban Development
Secretary of Transportation
Administrator, Small Business Administration
President, Export-Import Bank of the United States
SUBJECT: Reductions in 1982 New Commitments
for Federal Loan Guarantees
Federal budget policies are having a serious adverse impact on
the nation's credit markets because of the virtual explosion in
recent years of Federal and federally-assisted borrowing.
For example, in the fiscal year just ended, the Federal govern-
ment borrowed $78.8 billion to finance its on and off-budget
deficits and stimulated an additional $48.0 billion in borrowing
for loan guarantees and $27.7 billion for government sponsored
enterprises. In sum, funds raised under Federal auspices in 1981
absorbed 43 percent'of the capital raised in the nonfinancial
sector of the U.S. credit markets.
This direct government and government assisted borrowing has
contributed to record interest rates, disorder in financial
markets, and inadequate economic growth. The escalation of
interest.rates in recent years has made it impossible for many
families to buy homes and has discouraged investment by business
and industry.
At my request, the Cabinet Council on Economic Affairs has
completed a thorough review of Federal loan guarantee programs
and has recommended that action be taken immediately to reduce
unnecessary credit demands. After reviewing the Council's
recommendations, I have concluded that reductions in new com-
mitments should be made in the programs and in the amounts listed
in the attachment to this memorandum.
Accordingly, I am asking each of you to prepare and submit to
the Director of the Office of Management and Budget within 15
days a specific plan for achieving the reductions identified
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for the programs listed for your department or agency. You should
consider all matters within your discretion for achieving the
reduction, including changes in credit standards and loan criteria.
To hasten the implementation of this policy, administrative action
would be preferred wherever possible. In the event you conclude
that the reductions cannot be achieved administratively, you
should submit draft legislation that you believe necessary to
achieve the reduction.
Attachment
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REDUCTIONS IN 1982 NEW COMMITMENTS FOR LOAN GUARANTEES
(in billions of dollars)
Previously
Planned
1982 Level
Reduction
to be
Achieved
Department or Agency and Program
Department of Agriculture
- Rural Electrification-and Telephone
Revolving Fund
$ 5.20
$ 1.00
- Farmers Home Administration
13.40
.30
Department of Commerce
- NOAA Fishing vessel financing
.08
.02
- Trade adjustment assistance
.04
.01
Department of Defense
- Defense Production Guarantees
.03
.03
Department of Housing and Urban Development
- GNMA Mortgage backed-securities
64.00
16.00
- Section 108 community development
.25
.25
Department of Health and Human Services
- Health Professions guaranteed student
loans
.10
.02
Department of Transportation
- Maritime Administration Federal Ship
Financing Fund
.90
.22
- Section 511 rail rehabilitation
.27
.14
- FAA Aircraft Purchase loan guarantees
.10
.05
Department of Treasury
- Biomass energy development
.05
.05
Small Business Administration
- Business Loan and Investment Fund, Suret
Guarantees and Pollution Control
Equipment Contract Revolving Fund
y
5.00
1.00
Export-Import Bank
- Guarantees and Insurance
8.20
1.20
$20.29
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