Note: The text of the memorandum was released on February 15.
On the same day, the White House announced that work had already begun, at the President's direction, to implement zero-base budgeting in the White House, and that substantial budget reductions are anticipated. Richard M. Harden, Special Assistant to the President for Budget and Organization, is coordinating White House implementation.
Memorandum for the Heads of Executive Departments and Agencies
During the campaign, I pledged that immediately after the inauguration I would issue an order establishing zero-base budgeting throughout the Federal Government. This pledge was made because of the success of the zero-base budget system adopted by the State of Georgia under my direction as Governor.
A zero-base budgeting system permits a detailed analysis and justification of budget requests by an evaluation of the importance of each operation performed.
An effective zero-base budgeting system will benefit the Federal Government in several ways. It will
• Focus the budget process on a comprehensive analysis of objectives and needs.
• Combine planning and budgeting into a single process.
• Cause managers to evaluate in detail the cost-effectiveness of their operations.
• Expand management participation in planning and budgeting at all levels of the Federal Government.
The Director of the Office of Management and Budget will review the Federal budget process for the preparation, analysis, and justification of budget estimates and will revise those procedures to incorporate the appropriate techniques of the zero-base budgeting system. He will develop a plan for applying the zero-base budgeting concept to preparation, analysis, and justifications of the budget estimates of each department and agency of the Executive Branch.
I ask each of you to develop a zero-base system within your agency in accordance with instructions to be issued by the Office of Management and Budget. The Fiscal Year 1979 budget will be prepared using this system.
By working together under a zero-base budgeting system, we can reduce costs and make the Federal Government more efficient and effective.