Section
104
SS

Section 104 states that ° . . . Pederal programs shall not cease
to apply to the T-ust Territory of the Pacific Islands either before

or after the term.nation of the trusteeship, without =he express
approval of Congress."

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We presume 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 turn 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 question are now of major significance in texms 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 Novenber
1978, and it remains our view, that the Federal assistance level
Needs to be phased down, so that thepost-trusteeship entities

in Micronesia are not required toabsorb the shock of a sudden |

termination of Federal aid of that magnitude.

That Noverber 1978 policy has, however, been criticized. It has
been argued, for example, that under it this Departrent 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 flowmandatory. That was not then nor is
it now our purpose. We do not intend that any Federal program
that is, by law, required to be implementedin theTrust Territory

be terminated without appropriate natitication $9 theCongress
through the authorization/appropriation process, or

in

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a

Control Act. However, Gur 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

development, by foreclosing the aptilicaticn™in the Trust Territory

of Federal prigrams directed to that end. Again, thatwas not and
Ln

ary

Because of the controversy that has developed'an 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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