WASHINGTON OUTLOOK

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00988R000600160040-6
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 1
• Document Creation Date: December 12, 2016
• Document Release Date: March 13, 2002
• Sequence Number: 40
• Publication Date: September 22, 1974
• Content Type: MAGAZINE

? ? , cpprQved_ Far #2e O2 3I ': CIA-RDP85-00988ROfi1WO160040-6
fi
IThe Pentar.ton r do s in inflation
The t7efense u et that will be sent to Congress
next January will top $ i 00-billion and then some.
The main reason for the huge increase over this
year's $94-billion request: For the first time, the
Pentagon intends to budget realistically for inflation
and let the costs fall where they may.
inflation was seriously underestimated in this
year's budget. Planners at the Pentagon and the
Office of Management & Budget only factored a
3.5% estimate into the costs of major programs. But
the actual rate has ballooned
to 11% for procurement and
8.2% for research, develop-
ment, testing, and evaluation
(RDT&E) projects. It has robbed
landing and Skylab programs be used in the joint
issiion.
Three sets of the $300,000 passive radar system
that will be installed in the Soyuz already have been
shipped to Russia. Officials are not worried about
giving away any secrets: the active part of the sys-
tem, which does most of the work, will be installed
on the Apollo.
A new look at Farming, Inc.
After years of rhetoric over the decline of the family
farm, the government finally is trying to find out just
how deeply U. S. corporations have moved into
farming. The results-which will take two years or
so to compile fully-could determine whether farm
state congressmen succeed in their perennial of-
the current budget of $6-billion forts to curb corporate takeovers of farmland.
in buying power. Congress has In the new Census Bureau survey, every com-
cut $5-billion more. , pany known to be involved in farming is being
Defense Secretary James R.
James Schlesinger get trapped the same way next
year. The fiscal 1976 budget is
being calculated on the assumption of eye-popping
asked to list the farms it owns and to report its other
business lines. Early indications are that most of the
companies with farm subsidiaries have agribusi-
ness foundations, as farm equipment distributors,
feed manufacturers, wholesalers, and the like. But
inflation rates for the next few years. With fiscal i mining companies, real estate developers, general
1974 as the baseline of 100, the inflation factors
spelled out on internal Pentagon documents are:
1976: Procurement 119, RDT&E 115.8
1977: Procurement 128.3, RDT&E 122.7
1978: Procurement 134.7, RDT&E 128.8
1979: Procurement 140.6, P.DT&E 134.6
1080: Procurement 146.7, RDT&E 140.4
After fiscal 1980, Defense Dept. budget officials
how prices of major weapons systems have bal-
will assume a milder annual inflation rate of 3.7% for Capital wrapup
procurement and 4.2% for RDT&E. But the impact of Penslon woes: The Pension Benefit Guaranty Corp.
inflation before then will be spelled out in the fiscal established by the new pension reform law has al-
1976 budget that Congress will get in January. De- ready been swamped with applications for plan ter-
fense Dept. officials will include in that document a mination insurance payments. Benefit coverage is
five-year projection of defense costs. The retroactive to July 1, and about 170 pension plans
enormous cost increases that inflation already has have folded since then without sufficient assets to
brought about will surface much earlier. In about pay all vested benefits. The new federal insurance
two weeks, the Pentagon will report to Congress on covers vested befits up to $750 a month.
iooned so tar this year.
manufacturers, and more than 15 conglomerates
also are thought to be farm owners.
idi-
f
b
h
s
arm su
at
The Agriculture Dept. guesses t
aries of such companies may be producing more
than $5-billion worth of crops a year. But the new
t down and to
il th
a
survey is the fiat effort to na
trace the corporate farmers' other interests.
National notes: Treasury Secretary William E. Simon's
top aides have taken to wearing beepers so they
U. S. ;mace jjear for fussia's Soyuz can be contacted any place, anytiirme. Simon was
Tt?he Sovi4:t Soyu` spacecraft that will be used in dismayed when tan discovered one rran's suburban
next July's docking with a U. S. Apollo vehicle will home is out of r a n g e .... Some congressmen have
carry built-in insurance against failure of the ren- begun to muse that, now that they permitted a 'rite
de7vous. After watching Soviet problems with their in Civil Service salaries, they ought to raise their
own dockisi# prthveot?okJ IgdbGi O2fO3Y2 dl st 4-R?PB J~~ fl ij~~~~~ ~-since 1969. But politi-
the RCA system that worked so well in the lunar cal realities makethat unlikely.