Section 104

Section 104 states that ° . . . Pederal prograss shall not cease
to apply to the Trust Territory of the Pacific Islands either before
or after the termnation of the trusteeship, without =he express
‘
approval of Congress."
We presime that this section is directed, at least in part, toward
‘a policy concerning Federal programs in the Trust Territory that this
Department adopted in November 1978. That policy was in tan based
upon the expectation that, upon termination . the Trusteeship,
which the President has targeted for 1981, the many Federal grant
programs now applicable to the Trust Territory would, for the mst
part, oease. That is the basis upon which the future political
status of the Trust Territory is being negotiated. The Federal
programs in questian are now of major significance in tezms of
revenue resources in the Trust Territory. They have totaled about
$25 million per year in recent years (with the figure excluding a
controversial feeding program, which is now largely terminated
except for emergencies). It was this Department's view in November
1978, and it remains ow view, that the Federal assistance level
needs to be phased down, so that the post-trusteeship entities
in Micronesia are not required to absorb the shock of a sudden |
termination of Federal aid of that magnitude.
That Nowember 1978 policy has, however, been criticized. It has
been argued, for example, that under it this Department would
be violating the Impoundment Control Act, because Federal funds
would be prohibited fram flowing to the Trust Territory when the
Congress had made such flow mandatory. ‘That was not then nor is
it now ow purpose. We do not interd that any Federal program
that is, by law, required to be implemented in the Trust Territory
be terminated without appropriate notification to the Congress
;
through the authorization/appropriation process, or the Impoundment

Control Act.

However, our November 1978 policy was mainly directed at)

“discretionary” programs, those that the grantor or the grantee can
apply if they so choose, as a matter of policy. It has also been
argued that our November 1978 policy interferes with economic
Gevelopment, by foreclosing the application in the Trust Territory
of Federal programs directed to that end. Again, that was not and
is not our purpose.

Because of the controversy that has developed’on this question, we are

engaged now in a revision of that November 1978 policy statement.
We shall share the new statement with the interested Committees
when we have completed our consultations within the Executive Branch.

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