Category After Apollo?

NASA from the time it received the BOB letter asking for a study of shuttle economics had planned to have that study carried out by an outside con­tractor with impeccable economic credentials. Tom Paine decided that “no one would believe NASA’s results.” There was, however, an interim in-house NASA study managed by Robert Lindley of the Office of Manned Space Flight. Lindley had been one of the first people within NASA to suggest that “payload effects”—the cost savings from reusing or repairing satellites and initially designing them for the less demanding characteristics of a shuttle launch—might be as important a benefit from shuttle development as lower launch costs. In terms of overall space program costs, payload development accounted for 80 percent of total costs; launch, only 20 percent, and thus lowering payload costs could have a greater impact than lowering launch costs. Lindley’s study produced positive results, but Paine was correct. It had little credibility when it was submitted to the new Office of Management and Budget (OMB) in August 1970.

NASA selected Mathematica, Inc. of Princeton, NJ to lead an indepen­dent study of shuttle economics. Mathematica had been founded by presti­gious economist Oskar Morgenstern of the Institute for Advanced Studies; there he had worked with mathematician John von Neumann to develop game theory, an approach to analyzing situations in which actors with con­flicting interests pursue independent courses of action. Morgenstern had founded Mathematica to pursue practical applications of this approach. At

Mathematica, a young Austrian-born economist named Klaus Heiss was put in charge of the space shuttle study. Mathematica was supported in its analytic efforts by the Aerospace Corporation, which developed various mission and cost models, and Lockheed, which performed technical analy­ses of payload effects. The first meeting among Mathematica, NASA, and OMB took place on July 9, 1970; the firm’s contract was for an 11-month study to be completed at the same time as the shuttle Phase B studies in June 1971.36

^With the September 30, 1971, submission of NASA’s Fiscal Year (FY) 1973 budget request to the Office of Management and Budget (OMB), the process that would most likely result in an up-or-down decision on approving space shuttle development or pursuing some less ambitious post-Apollo human space flight program entered its final stage. Even though Cap Weinberger had suggested in his August 12 memo that the NASA budget should be set at a level that would allow the beginning of space shuttle development and President Nixon had indicated “I agree with Cap,” that news had not been communicated to lower levels in the White House or to NASA. The result was a fragmented and contentious debate over shuttle approval.

Over the next three months, as NASA’s Jim Fletcher and George Low sought support in the national security community and the aerospace indus­try for NASA’s position that a “full capability” shuttle orbiter able to launch all U. S. payloads should be approved for development, OMB’s Rice and his staff were joined by science adviser Ed David, his Office of Science and Technology (OST) staff, and David’s advisory Flax committee in opposition to an ambitious space shuttle program. Others in the Executive Office of the President, such as Tom Whitehead, now at the Office of Telecommunications Policy, Bill Anders at the Space Council, and Peter Flanigan and his assistant Jonathan Rose in the White House, tried to mediate the conflict between NASA and OMB/OST and to move the process toward a productive out­come.

The debate over what should be the next step in human space flight, although conducted in the context of decisions with respect to the president’s FY1973 budget proposal, was not intimately tied to NASA’s budget level for that year, since NASA had requested only $228 million for the space shuttle in its budget submission. Rather, it was fundamentally about what kind of space program the United States would carry out in the coming decade and beyond. Approving a new start on the full capability shuttle would imply that once the shuttle was flying the United States would use it as the basis for an active national space effort, even if it were far less ambitious than what the Space Task Group had proposed in 1969. Choosing a more modest shuttle

option or an alternative to the shuttle such as an unpowered glider would signify the Nixon administration’s intent to reduce even more NASA’s post – Apollo ambitions with respect to the future of human space flight.

George Low was finally able to meet with Don Rice in late November to bring Rice up to date on NASA’s current thinking on the shuttle. Low described the meeting as “extremely good. . . for we communicated well.” Once again, Low drew his development versus operation cost curve for Rice and used it as the basis for his presentation. He told Rice that on the basis of 18 months of contractor and NASA studies and of trading off develop­ment and operating costs, NASA had come up with “a class of [shuttle] configurations that costs much less to develop than earlier configurations, is smaller but can carry the required payload, and is still ‘productive’ in terms of operating costs.” He suggested that “for practical purposes,” the two – stage fully reusable and the baseline (a two-stage shuttle with disposable hydrogen tanks) configurations could be “discarded” because of their high development cost. He argued that “the glider, as presently proposed, also does not appear to be promising.” If the glider were to carry the same pay­load as the full size shuttle orbiter, it would “probably not offer a significant saving in development cost, but will be expensive to operate.” (This was a rigged argument, since neither the Flax committee nor OMB was suggesting a glider able to carry large payloads, and NASA had still not examined the implications of a much smaller glider.) This left, suggested Low, “the Mark I/Mark II configurations with four booster options: flyback, pressure-fed, parallel-staged pressure fed, and parallel staged solid rocket boosters.” (The term “flyback” referred to the use of a modified first stage of the Saturn V Moon rocket that could be operated by a human crew and flown back to a runway after launch. The term “pressure-fed” referred to a new booster design concept, developed at NASA’s Marshall Space Flight Center, in which propellant would be forced into the booster engines by gas pressure rather than fed into the engines by a large turbopump. A “parallel-staged” con­figuration would have both booster and orbiter engines firing at liftoff, as opposed to the usual “series-staged” approach in which only booster engines would be fired on the launch pad.) Low suggested that a space shuttle using one of these booster options could be developed for between $4.5 and $6.5 billion, with operating costs between $6 and $12 million per flight. All shut­tles in this range could eventually “carry the same payload, 65,000 pounds into a due east orbit or 40,000 pounds to polar orbit, in a 15 ft by 60 ft. payload bay.” Low concluded that “the most promising configuration today is the Mark I/Mark II orbiter with the parallel-staged pressure-fed booster.” It is worth noting that NASA at this late point was still advocating the idea of phased technology development of the shuttle orbiter.43

Rice later would remark “that what sticks in my mind more than any­thing else was the difficulty of getting any solid attention paid to alterna­tive [shuttle] designs. . . alternative in terms of mission requirements and why that mattered.” He added “I still find myself a little bit incredulous to this day that there were three widely different concepts that NASA had for that system. All had the same physical capability to do work.”44 Rice was correct; NASA was strongly resistant to examining alternatives to the capabilities embodied in its preferred shuttle design. For one thing, NASA was still caught between OMB’s pressure to consider a signifi­cantly smaller shuttle or a glider and NASA’s perception that it had to meet national security requirements to gain the DOD support it thought essential for White House approval of the shuttle. Also, NASA’s human space flight team was being stubborn, convinced that the shuttle orbiter design coming out of more than eighteen months of study was a much better choice than any of the alternatives being discussed in Washington. In a 1979 letter, Low commented that “even long after those of us in the top NASA administration had decided that a less ambitious shuttle design was ‘all the traffic would bear,’ it took some time to get the rest of the people in NASA who had been working on the two-stage, fully reusable shuttle to agree with this approach. Therefore, what may have appeared to some as a NASA/OMB fight, in part, was really an internal NASA debate.”45

Not surprisingly, given the deep skepticism of OMB and OST with respect to the wisdom of going ahead with a large space shuttle, last ditch opposition to approving NASA’s shuttle plans continued. David wrote Shultz on December 30, saying that he was “disturbed by the prospect that a decision will be made” to approve the full-sized shuttle. It was David’s view that “the large space program implicit in the large shuttle decision is not consistent with the best interests of this nation.” David was joined in opposition by Rice and his OMB space staff, who remained dubious regarding the economic justification for a large shuttle, saying that “all of the decisions regarding the Shuttle should be made in the full awareness that the Shuttle is not a cost – effective system—whether at 15′ x 60′ or any other size.” Thus, what should be approved was “the smallest Shuttle which can offer improvements over our current methods of operation. Any size Shuttle will provide manned space flight and national prestige.”6

Weinberger offered Rice one last chance to make the case against a large shuttle. On December 30, Weinberger called Fletcher, asking for another look at a shuttle with a 14 x 45 foot payload bay but limited to lifting only 30,000 pounds to orbit. This suggestion came from Rice. Low reported that “Fletcher came close to telling Weinberger to go to hell.” Fletcher then called Shultz “and had another lengthy conversation with him.” Shultz was also “unwilling to make a decision and recommended that we should not yet go to see the President but take one more look at the request made by Rice and presumably David.” The next day, Friday, December 31, Fletcher and Low “held a telephone conversation with David and Rice without really getting any new information. Rice did all of the talking and David was very quiet.” Low added

Rice said that he would still like to see us go ahead with the 12 x 40′ 30,000 lb. Shuttle, but that they’re willing to give in on size. . . He wanted us to crank up studies over the weekend to answer all of his questions. I pointed out that our people had already scattered for New Year’s. . . I called Rice back later and asked him for a piece of paper to spell out in writing, once and for all, all that he wanted us to do. He indicated that the piece of paper would be a good idea but that he would not commit that it would, once and for all, ask all his questions.7

OMB sent eight questions to NASA, including “if future budgets for NASA were constrained to $3.2-$3.3 B, would you still want to do the large Shuttle?” and “why should a relatively few space station modules for the mid-1980’s determine the size and weight capabilities of the Shuttle?” Other questions dealt with more specific technical issues. By the following Monday, NASA had developed answers to most of OMB’s questions. With respect to the first query, NASA said “the answer is yes”; with respect to the second, NASA provided a detailed list of the payloads other than space station mod­ules that required a weight-lifting capability of over 30,000 pounds.8

Reflecting on the need to respond to OMB’s questions, a frustrated George Low complained that “there is nobody [likely referring to Shultz and Weinberger] in the White House willing to make any decisions. Everybody feels that the issue of Shuttle size is too small [not important enough] an issue to take to the President. . . but they’re also unwilling to let the Administrator of NASA to make that decision.” The result was that “they let their various staffs continue to. . . ask nickel and dime sized questions without ever calling a halt to that procedure and say it’s about time we made up our mind and let’s proceed.” Looking back at the decision process several years later, Low added “the single most significant factor affecting the space shuttle decision was that there was no top-level leadership in the White House. President Nixon was unwilling to deal with his agency heads and dealt solely with his staff. This placed a great deal of decision-making responsibility with the OMB, and by definition the OMB is far more interested in short-range bud­getary problems than in the long-range future of the nation.” Low’s criticism was not completely fair; both David and Rice couched their opposition to the large shuttle in terms of its longer term impact on the U. S. space pro­gram, not just on shorter-term budget issues.9

In advance of the late afternoon meeting on January 3, 1972, at which a decision how to proceed with the shuttle had to be made, David and Rice continued their opposition to the choice of a large shuttle. By this point, they recognized that some sort of announcement of presidential approval of shuttle development was a fait accompli, but were still arguing for having President Nixon make that announcement only in principle, without decid­ing on a specific shuttle design. David on January 3 sent another memo­randum to Shultz, this time arguing that “it would be desirable to defer a decision on the configuration, while announcing the Administration’s intention of proceeding with development of a new, reusable space vehicle for man and other payloads that will use advanced technology.” David sug­gested a three-month delay in selecting a shuttle configuration; during that time, NASA studies would “complete detailed examination of the lower cost alternatives to the full Shuttle capability.” Rice supported David’s argu­ment, telling Shultz “Dr. David’s proposals. . . appear to make a great deal of sense,” and that “the Administration should carefully examine the alter­natives before committing itself to a very costly and potentially unpopular large new space program.” Rice noted that “after urging by OMB and OST, NASA has only in December started looking at possible smaller and less costly alternatives—compared to about two years of study for the bigger system.” With the deadline for printing the president’s budget message fast approaching, Rice suggested that the budget message should include only “a general announcement of a decision to proceed with development of a new system for lower cost delivery of man and other payloads into space.”10 Both Rice and David resisted calling that new system a “shuttle.”

David and Rice may have exceeded their appropriate staff roles in trying to change the minds of their political leaders by arguing in support of their strong conviction that approving the NASA shuttle was not in the coun­try’s interests. For example, Rice had sought outside help from the aero­space industry in developing OMB’s alternate shuttle design and used shuttle approval as a bargaining chip in attempting to get NASA to downsize its institutional base. He gave little weight in his opposition to issues such as aerospace unemployment and the political impact of shuttle approval on the 1972 presidential election. In the judgment of one close observer of the deci­sion process, Peter Flanigan’s assistant Jonathan Rose, this behavior went beyond acceptable bounds. Rose observed that

Ed David and Don Rice may well have been right that there existed a different cost curve than the one that NASA was able to find for a shuttle with a smaller bay and lighter payload. I am quite clear that only their pressure forced the shuttle modifications which produced the massive savings from the August shuttle [the two-stage design] to the December shuttle. They were however unable to prove their case when it came to another billion dollars in potential savings if we delayed for several months more. While NASA may not histori­cally have effectively studied the smaller shuttle, I became convinced that Jim Fletcher had in the time given to him done the best he could. In the last analy­sis, that is all one can ask of an honest agency head. He should not be brutal­ized on a continuing basis by the budget process or by the White House staff when such pressure appears to reach the point of diminishing return.

The essence of judgment is to know when to stop. I simply think that Don Rice failed us here. He viewed the political situation as well as the plight of the contractors very lightly. He was far more interested in pursuing the mar­ginal cost savings which his staff led him to believe were possible. This in turn finally led him to some highly shoddy tactics in ex parte lobbying.

I believe we reached the best possible result under the circumstances. In a non-election year I might have seen the equation differently and been willing to wait several extra months to see if Rice was right. But I believe you have to play the ball from where it lies, and this after all is 1972.11

It is arguable whether Rice and David “brutalized” NASA in opposing a full capability shuttle or whether they behaved responsibly in making sure the reasons for that opposition were fully understood by the political deci­sion makers. What is clear is that they did state their case with vehemence, that short-term considerations related to aerospace employment in advance of the 1972 presidential election played a crucial role in the final decision to approve the full capability shuttle, that Rice and David were on the losing side of the argument, and that, with the benefit of hindsight, they were fully justified in their opposition.

The reaction to this situation on the part of the space flight community has been predictable—continuing advocacy that the NASA budget share should be increased. A 1990 space program review led by aerospace indus­try executive Norm Augustine suggested that “a reinvigorated space pro­gram will require real growth in the NASA budget of approximately ten percent per year (through the year 2000), reaching a peak spending level of about $30 billion per year (in constant 1990 dollars) by about the year 2000.”6 A NASA FY2000 budget of $30 billion in 1990 dollars would have been the equivalent of a budget of almost $40 billion in 2000 dollars; the actual NASA budget for Fiscal Year 2000 was $13.6 billion.7 Almost two decades later, a similar review of NASA’s human space flight program, again led by Augustine, reached only a slightly less ambitious conclusion, observing that “NASA’s budget should match its mission and goals,” but then suggesting that “meaningful human exploration” would be possible only if the NASA budget were increased by up to $3 billion per year for several years.8 Given that the proposed NASA budget at the time the review was taking place was $18.7 billion, this was a call for an over 15 percent increase in NASA’s annual resources. More recently, astrophysicist and sci­ence spokesperson Neil DeGrasse Tyson has gained widespread attention by his advocacy of doubling the NASA budget, bringing it back to 1 percent of overall Federal spending. Such an action, suggests Tyson, would “give NASA enough money to do everything everyone has wanted NASA to do over all these years and enable us to go back to the moon and on to Mars in a bold and audacious way.”9

All of these recommendations and suggestions fly in the face of a real­ity set in motion by the Nixon space doctrine: When the priority of the space program is compared through the normal political process to the pri­ority of other uses of government funds, the outcome is to allocate to the space program a relatively low share of federal discretionary spending, inad­equate to support a vigorous and sustainable program of space exploration. This outcome has been consistent for over 40 years and is very unlikely to change anytime soon. A 2014 review of the U. S. human space flight pro­gram observed that “human spaceflight—among the longest of long-term endeavors—cannot be successful if held hostage to traditional short-term decision-making and budgetary processes.” But the Nixon space doctrine declared that it was through those processes that space budget decisions should be made. The same report also noted that “it serves no purpose for advocates of human exploration to dismiss these realities [the lack of public interest in space and the attendant low priority given to increasing space spending] in an era in which the citizenry and national leaders are focused intensely on the unsustainability of the national debt, [and] the growth in entitlement spending. . . There is at least as great a chance that human space­flight budgets will be below the recent flat line trend as above it.”10 The mismatch between the requirements of a successful program of human space exploration and the tenets of the Nixon space doctrine has been a central space policy reality since the doctrine was first stated in 1970.

There is little controversy with respect to the influences that originally led to setting the desired width of the shuttle payload bay at 15 feet. They were both NASA’s space station crew and cargo payloads and a potential new upper rocket stage—a space tug—for moving national security and other payloads from the shuttle’s low Earth orbit to higher altitudes, particularly geosynchronous orbit.[7]

It is also now clear which payload defined the need for a 60-foot long payload bay. In an 1997 interview, Hans Mark, who as both Under Secretary and Secretary of the Air Force during the administration of President Jimmy Carter (1977-1981) had concurrently served from August 1977 to October 1979 as the director of NRO, commented that “the shuttle was in fact sized to launch HEXAGON.” This photo-intelligence satellite, also known as KH(Keyhole)-9 and nicknamed “the Big Bird,” was under development in 1969 as the successor to the Corona satellites, which had been operat­ing since 1960 to provide broad area photographic surveillance of various regions of the world. Hexagon was a very large object, only ten feet in diam­eter but almost 60 feet long. The satellite would weigh over 30,000 pounds when fully loaded with film for its four entry capsules that would return exposed film to Earth.15

The existence of Hexagon was in 1969 classified at a very high level, above “Top Secret”; thus it could not be mentioned in the DOD/NASA report, which bore only a lower-level “Secret” classification. As Mark sug­gested, Hexagon was used to “size” the payload bay; originally there were no plans to actually launch it on the shuttle, since the Hexagon program would be reaching the end of its likely service life as the shuttle began opera­tional flights in the late 1970s or early 1980s.16 Air Force and NRO plan­ners judged that whatever system would be the follow-on to Hexagon would likely be equally as large, and Hexagon thus could serve as a surrogate for that future system in determining an appropriate payload bay length.

Less clear is which potential Air Force or NRO missions drove the require­ment for a shuttle to have a high cross-range capability. No prior actual national security space system had been required to maneuver to return to Earth, since all were expended after completing their mission. However, the Air Force had pursued from the late 1950s until it was canceled in 1963 a research program called Dyna-Soar, which involved developing a small glider-like winged vehicle that would be launched into orbit on an expend­able booster and would have cross-range capability upon its return to Earth. The idea of a piloted space system that could be brought back to a secure base after a one-orbit or short-duration mission remained attractive to national security planners, but that idea had not gone through the typical rigorous review to establish it as a firm national security requirement. Air Force Secretary Robert Seamans suggested that the cross-range requirement was advocated by “operational types,” not the top Department of Defense, Air Force, or NRO leadership.17

The DOD/NASA report had mentioned a “single pass” mission with an unspecified launch location and requiring 1,400 nm of cross-range to return to a location near Washington, DC, presumably so that the intelligence products obtained during the mission could be rushed to top-level deci­sion makers. None of the subsequent discussions of national security shuttle flights discussed such a mission profile; it seemingly reflected the aspirations of those who prepared the 1969 report. Missions taking off and landing at Vandenberg Air Force Base on the California coast (or some other Western launch site18) were much more prominent in later discussions. If the space shuttle were to carry out a one-orbit mission launched from Vandenberg, the shuttle would have to have at least 1,100 nm of cross-range to return to a secure runway at that Air Force base.

A clue to the character of missions that required high cross-range can be found in studies performed by NASA in 1973, after the shuttle entered its development phase. By then, NASA had already done considerable work in designing “reference missions” for two uses of the shuttle—placing a satellite in geosynchronous orbit and resupplying a spacecraft in low Earth orbit. In 1973 NASA developed two new reference mission scenarios for single-orbit shuttle flights from Vandenberg Air Force Base. These reference missions were “representative of Air Force requirements on the shuttle.” One of the two missions, designated 3A, would deploy a satellite into a 104 degree, 100 nm polar orbit; the shuttle would return to Vandenberg after one orbit. The satellite to be deployed would weigh 32,000 pounds and was ten feet in diameter and 60 feet long; it would almost certainly be the follow-on photo­intelligence satellite to Hexagon. It would be deployed less than 24 min­utes after launch. NASA noted that “the mission of the payload is beyond the scope” of the reference mission description, likely referring to its intel­ligence objectives. The second mission, designated 3B, after carrying out a rendezvous within 25 minutes of launch, would retrieve a similar satellite and return it to Vandenberg after a single orbit.19

So were satellite deployment or retrieval the missions that defined the needed shuttle cross-range capability? Or was it also, or even primarily, the hope of national security planners to be able to fly an on-demand mission in polar orbit to get crisis-related information on what was happening at a flash­point anywhere in the world, such as the mission landing in Washington, DC, mentioned in the DOD/NASA report? This latter speculation is sup­ported by a letter drafted in late 1971 for then NASA Administrator James Fletcher to send to Deputy Secretary of Defense David Packard as NASA sought DOD support for the shuttle program. The draft letter suggested that “the shuttle could be maintained on ready alert, making possible rapid responses to foreseeable and unexpected situations”; such a mission could examine “unidentified and suspicious orbiting objects”; enable “capture, disablement, or destruction of unfriendly spacecraft”; and make possible “rapid examination of crucial situations developing on earth or in space.”20

The DOD/NASA report also mentioned launches of “self-contained mission modules which possessed their own crews to operate specific mis­sion equipment.” Might these “mission modules” have carried the human – operated KH-10 very high-resolution camera system, code named Dorian, developed during the 1960s for the Manned Orbiting Laboratory (MOL) program? That program was canceled on June 10, 1969, just as the DOD/ NASA shuttle report was being prepared. The MOL combined a capsule based on NASA’s Gemini spacecraft, to be used during launch and reentry, and a two-segment module containing the Dorian camera system and crew quarters. The 1971 NASA draft letter said, “the shuttle could be equipped to perform the MOL mission for seven days on station. . . Alternatively, the shuttle could transport MOL-like equipment in a self-supporting module to the desired orbit for operation over a longer period of time.” Such missions would most likely have been launched into polar orbit so they would overfly all areas of the world, and would return to Vandenberg at their completion, thus requiring cross-range capability.21

The need for high cross-range was throughout the shuttle debate a point of contention between NASA and the national security community. In real­ity, requirements for national security missions requiring high cross-range were never formalized and more or less evaporated during the 1970s. Well before that time, however, NASA had decided that a shuttle having signifi­cant maneuvering capability as it returned from orbit was needed to sur­vive the heat of entry into the atmosphere. So while the national security cross-range requirement initially drove NASA to a particular shuttle orbiter design, one with delta-shaped wings and the thermal protection needed to resist high temperatures during a maneuvering entry, NASA likely would have adopted a similar design even if that requirement had not been levied in 1969. Whether NASA would have gone forward with a shuttle having a 15 x 60 foot payload bay and powerful enough to launch the most heavy national security payloads is not as clear; in the final days of the shuttle debate in December 1971, NASA put forward a somewhat smaller and less powerful shuttle as its proposed design.

OMB Director Shultz wrote NASA’s Low on February 27, 1971, to reiter­ate the need for the economic analysis as an input into the shuttle deci­sion process. Mathematica’s final report arrived at OMB only on July 23, even though the report was dated May 31. A major reason for the delay in submitting the report to OMB were Mathematica-NASA interactions on what the report would say. Heiss commented that “there was tremendous pressure by NASA on us to come out and say okay, the two stage shuttle is a good thing.” Drafts of the executive summary were read by NASA “12, 15 times” and Mathematica was asked “why do you need this paragraph in and this is gratuitous and this is sort of not warranted.” Mathematica “stuck with it.” The report’s language, noted Heiss, was “carefully bal­anced.” In particular, Heiss said that the report’s wording was intended to imply that “it’s not clear that the two-stage system is really the one that could accomplish this [fly the projected 1980s missions] at the least cost.”37

The Mathematica report analyzed 23 different “scenarios”—forecasts of future launch demand. One of those scenarios was based on the mission model provided by NASA and DOD, which called for 736 missions over the period 1978-1990, an average of 56 missions per year. The costs of developing a shuttle and the facilities required to operate it was estimated by Mathematica to be $12.8 billion and the incremental cost of a shuttle launch was set at $4.6 million (in 1970 dollars). For this scenario, Mathematica estimated that there would be almost an $8 billion savings in launch costs and an $18 billion savings in payload costs compared to the use of existing expendable boosters. The report concluded that at a 10 percent discount rate, the “allowable” development cost (the maximum amount that would produce economic benefits) of a fully reusable space shuttle, including the space tug needed to move payloads to orbits the shuttle could not reach, was [8]

Since NASA study contractors were estimating that shuttle development (not counting the space tug) would range between $9 and $12 billion, on a purely economic basis the case for investing in the shuttle clearly required a high flight rate for the 1980s, including not only NASA but national secu­rity and commercial missions; it would take over 40 launches per year for the investment in the shuttle to break even financially.38

While there was a relatively firm basis, based on past experience with developing large aircraft and other space systems, for estimating the costs of developing and testing the shuttle, there was no comparable experience in estimating the cost of operating a reusable space system or the payload sav­ings that could result from its use. Yet those costs were an important element in determining the system’s economic payoff. This was a significant flaw in Mathematica’s analysis, since the cost per launch and payload savings inputs to its analysis were based on what one senior NASA engineer would describe only as an “optimistic guess.”39

Mathematica went on to note that the fully reusable shuttle was poten­tially “not the only system” that could achieve these significant payload cost savings, that “other technically acceptable systems should be studied,” and that “the task of identifying the best reusable Space Transportation System among all viable alternatives” had not begun. These points resonated with Don Rice and his staff at OMB, who had been pushing NASA, without much success, to look at alternatives to the fully reusable shuttle. The report com­mented that “the economic justification of a reusable Space Transportation System is independent of the question of manned versus unmanned space flight,” suggesting that the shuttle should be seen as a means of achieving space program objectives, not an end in itself. The report said that a shuttle should be developed “only. . . if can be shown, conclusively, what it is to be used for and that the intended uses are meaningful to those who have to appropriate the funds, and to those from whom the funds are raised.”40

The Mathematica report was hardly a ringing endorsement of the case for developing the two-stage, fully reusable shuttle. Its appearance in mid-1971 was an important added input to the moves already underway within NASA to make major changes in the agency’s approach to developing the space shuttle.

The first step in the budget decision process was a set of “hearings” at which NASA met with those in OMB and other parts of the Executive Office of the President working on space issues to present the thinking behind NASA’s budget request. The OMB hearings took place on October 6, 7, and 8, with the human space flight program being the focus on October 7. Low led the NASA delegation to the hearings and reported that they were gener­ally positive and friendly in tone. Low told Rice and the OMB staff that at the budget level of approximately $3.2 billion that NASA had requested, the agency’s priorities with respect to human space flight were, in order: flying Skylab, starting shuttle development, flying the Apollo 16 and 17 missions, carrying out a docking mission with a Soviet spacecraft, and adding addi­tional “gap-filler” missions using left-over Apollo hardware. But if NASA were held to a budget less that $3 billion as proposed in the OMB August target, said Low, NASA would give priority to flying the remaining two Apollo missions and would “re-examine what to do about future manned space flight.”1

There was one exception to the collegial tone of the October 7 hearing. William Niskanen, head of the OMB Evaluation Division, made two pro­vocative suggestions. The first was to finance the NASA program through revenues raised by selling the material returned from the Apollo missions to the Moon. The second was to have the private sector, using its own financial resources, develop the next generation space transportation system, and then sell transportation services to NASA and the Department of Defense (DOD) to recoup that investment. The staff of the Evaluation Division was in gen­eral even more skeptical of the value of NASA’s human space flight program than were OMB’s mainline budget examiners, and Niskanen a year earlier had been an opponent of any hint of a commitment to the space shuttle. Niskanen was a student of conservative economist Milton Freidman at the University of Chicago and libertarian in political and economic philosophy, advocating a very limited role for government; this perspective made him an opponent of major new government programs justified on economic grounds.

Reacting to the first of Niskanen’s ideas, the Space Council’s Anders com­mented that “unless the President himself ordered us to consider the selling of lunar material for profit, we should not even discuss the subject because it would be embarrassing to the Administration.” With respect to a commercial shuttle, Low told Niskanen that “the reason for not doing it is that it simply won’t work: if the idea is to cancel the space program, this might be a way to do it.” Whereupon, Low reported, Niskanen and his staff left the room, “but not without making a fairly strong threat about NASA’s budget.”

OMB’s Rice was personally sympathetic to the idea of not going ahead with the shuttle, noting that Niskanen and his group “wanted to kill it, just kill it off,” but that he had “adopted the view fairly early on that while that may well be the desirable thing to do from a broader public interest point of view, I didn’t believe that the President was in fact going to take the country out of manned space flight.” This skeptical perspective would lead Rice in the following weeks to seek the least costly shuttle program possible, putting him in direct opposition to NASA’s insistence that only a large space shuttle made sense. Rice’s background was in the type of systems analysis that had been developed at the Rand Corporation (which he would later head) and applied during the 1960s under Robert McNamara at the DOD; both Rice and Niskanen had worked at DOD then. Rice had pushed NASA to take a “whole systems” approach to evaluating the shuttle and possible alternatives for space transportation in terms of their cost-effectiveness. This approach, with its emphasis on quantitative measures, gave primary importance to eco­nomic factors. NASA’s Fletcher, believing that the primary reason for going ahead with the shuttle was the new capabilities it would offer and the intan­gible values associated with human space flight, was skeptical of a systems analysis approach to evaluating the shuttle, believing that “you can make systems analysis prove anything you want. . . it was just a lot of hocus-pocus,” since it could not assign a quantitative value to those new capabilities or to the value of the shuttle in terms of national prestige and international coop­eration. NASA’s Willis Shapley described Rice as “a strong believer in the religion of systems analysis” who took the shuttle issue on “to prove. . . that you could really get a better decision by really giving this the full systems analysis treatment.” Shapley, himself a long-time Bureau of the Budget staff person before joining NASA, observed that “analysis becomes a weapon in a controversy rather than a search after some abstract kind of truth.”2

NASA’s primary link to President Nixon and other senior White House decision makers was through Peter Flanigan and his assistant Jonathan Rose. George Low drafted a “best case” essay on the shuttle for Rose and Flanigan to use within the White House; it was edited by Willis Shapley and sent to Rose by James Fletcher on November 22. The essay made five points:

1. The U. S. cannot forego manned space flight.

2. The space shuttle is the only meaningful new manned space program that can be accomplished on a modest budget.

3. The space shuttle is a necessary next step for the practical use of space.

4. The cost and complexity of today’s shuttle is one-half of what it was six months ago.

5. Starting the shuttle now will have a significant positive effect on aerospace employment. Not starting would be a serious blow to both the morale and health of the Aerospace Industry.

The paper observed that “man has learned to fly in space, and man will continue to fly in space. This is fact. And, given this fact, the United States cannot forego its responsibility—to itself and to the free world—to have a part in manned space flight. . . For the U. S. not to be in space, while others do have men in space, is unthinkable, and a position which America cannot accept.” It suggested that the shuttle “can provide transportation to and from space each week,” and that “space operations would indeed become routine.” The link to an eventual space station and other long-term space activities was made explicit: “In the 1980’s and beyond, the low cost to orbit [that] the shuttle gives us is essential for all the dramatic and practi­cal future programs we can conceive. One example is a space station.” The paper argued that “the shuttle helps our international position—both our competitive position with the Soviet Union and our prospects of coopera­tion with them and other nations. . . With the shuttle, the United States will have a clear space superiority over the rest of the world.” It claimed that the shuttle could be developed for an investment of $4.5-$5 billion, with an operating cost of “around $10 million or less per flight.” It noted that the shuttle orbiter “has been dramatically reduced in size—from a length of 206 feet down to 110 feet,” but “the payload carrying capability has not been reduced.” In terms of employment effects, “an accelerated start on the shuttle would lead to a direct employment of 8,000 by the end of 1972, and 24,000 by the end of 1973.”46

With this paper, NASA stated its arguments for shuttle approval in what its leaders hoped would be a convincing fashion. Unlike the somewhat nega­tive arguments in support of the space shuttle that George Low had put forward in October 1970—that shuttle development could be justified “as a versatile and economical system for placing unmanned civil and military satellites in orbit, entirely apart from its role in conducting or supporting manned missions” and that “with the shuttle the U. S. can have a continuing program of manned space flight. . . without a commitment to a major new manned mission goal”—NASA in November 1971 made a much more posi­tive case for the shuttle as a human space flight system serving important national interests.47 Key to this case were not only the claim that the space shuttle would make space operations routine and less expensive but also the proposition that the shuttle would advance intangible values such as U. S. space leadership and international cooperation and that it was thus essential for the United States to continue a vigorous program of human space flight based on the shuttle and its new capabilities.

As NASA put forward this case for approving the shuttle, Rice and his OMB staff in parallel were preparing a decision memorandum for Richard Nixon that took a very different tack, suggesting that the president should approve a much smaller and less frequently used shuttle than the system that NASA had in mind. That memorandum questioned the economic argument for shuttle development and assigned only limited value to potential benefits such as space leadership and new capabilities for space operations. The fol­lowing few weeks would determine which point of view would prevail.

In preparation for the January 3 White House meeting, the NASA lead­ers prepared a letter reporting on their conclusions following the harried weekend of answering OMB’s questions. The letter reported that “the previ­ous conclusion that the full capability 15 x 60—65,000# shuttle makes the most sense has been reaffirmed and we now urge—even more strongly— that this configuration be adopted.” It said that “the OMB proposed option of a 14 x 45—30,000# shuttle is not acceptable because it will not handle manned space station modules, manned sortie flights, or manned resupply missions in a standard space station orbit.” In addition, “this shuttle would not handle 28 different science, applications and planetary payloads.” Once again, NASA asked for an “Administrator’s contingency” of 20 percent of the estimated development cost to accommodate “future cost growths due to technical problems.”12

Before their meeting, Fletcher and Low stopped by the offices of the Space Council across Pennsylvania Avenue from the White House to dis­cuss with Bill Anders, who had become an ally in their conflict with OMB and OST, “what they were going to say and what they thought the state of play was. Clearly they thought everything was still under scrutiny and study and it wasn’t close to a decision.” Then they went to Shultz’s White House office; the 6:00 p. m. meeting was attended by Shultz, Weinberger, Rice, David, Flanigan, and Nixon Congressional liaison Clark MacGregor. David briefly restated his opposition to going ahead with the NASA-recommended 14 x 45 foot shuttle, but Shultz quickly overruled both David and Rice and told Fletcher and Low that they could proceed with their plans for the full capability 15 x 60 foot, 65,000 pound shuttle. At some point between December 29 and January 3, Shultz had telephoned fellow economist Oskar Morgenstern to discuss the Mathematica study of shuttle econom­ics that Morgenstern’s firm had carried out; Morgenstern assured him that the shuttle was a reasonable program in economic terms. (One report even had Shultz making the call to Morgenstern during the January 3 meeting, but this seems unlikely, given the short duration of the meeting.) With that assurance, aware of the impact of the shuttle on aerospace employment, and also apparently aware of President Nixon’s interest in the national security missions enabled by the full capability shuttle, Shultz had decided before the meeting to approve NASA’s full capability shuttle configuration. Within a few minutes, Fletcher and Low were back in the Space Council office, “kind of elated,” to report “we didn’t have to say a word; we were just told that the decision was to go ahead” with the full capability shuttle that NASA had been advocating all along. When the two NASA leaders returned to NASA headquarters and reported the outcome of their meeting to human space flight chief Dale Myers, he was “amazed.”13

The next day, to be sure that his understanding of what had been decided was correct and to get that understanding on the record, Fletcher wrote Weinberger “to document the decision reached yesterday concerning the space shuttle.” As Fletcher understood it: “NASA will proceed with the development of the space shuttle. The shuttle orbiter will have a 15 x 60-foot payload bay, and a 65,000-pound payload capability. It will be boosted either by a pressure-fed liquid recoverable booster or by solid rocket motors. NASA will make a decision between these two booster options before requests for proposals are issued in the spring of 1972.” In addition, “NASA and indus­try will also continue to study, for the next several weeks, a somewhat smaller version of the orbiter. . . The main purpose of studying this smaller shuttle is to determine whether or not significant savings in operational costs can be realized, with [already existing] solid rocket motors, at this smaller size.”14