An OMB "Bombshell&quot

On May 17, Fletcher received a letter from Don Rice, the OMB assistant director with space responsibilities, after the two had met on May 7. To Rice, the letter was the one action that should have made clear to NASA that it had to adjust its plans to the reality of continued budget constraints. At the meeting, Fletcher and Rice had agreed that NASA and OMB would “work together to develop a realistic NASA plan for the future.” Rice agreed to provide NASA with a five-year projection of the budget that NASA was likely to receive, “allowing NASA and OMB management to consider the relative priorities of alternative programs.” Rice realized “that the most difficult aspect of this approach to five-year planning would be to secure agreement between NASA and OMB on the range of overall agency totals which could be considered ‘realistic’ for the five-year period.” He suggested that the then-current NASA budget of $3.2 billion per year might be an appropriate expectation. Rice later reflected that his letter “hit [NASA] like a bombshell,” since a $3.2 billion annual budget for the next half-decade would make it impossible for NASA to develop the shuttle it was then plan­ning. Dale Myers described Rice’s letter as “the single stroke of the pen that knocked out the first stage booster, because you just couldn’t get the two [stages] into the budget.”32

At this point, NASA had been hoping that its annual budget might increase to $4 billion—perhaps even $5 billion—by the mid-1970s. Rice’s suggestion that NASA plan for an annual budget at a significantly lower level was a sobering reminder that the agency had to constrain its future ambi­tions. Among other things, it implied that NASA could not budget more than $1 billion per year for shuttle development and still maintain the bal­anced program that was presidential policy.

By the time he finished his White House visits, Fletcher had come to share George Low’s concern that NASA was not on a sustainable path with respect to the shuttle program. Fletcher, reported Low, “in fact, has asked for the development of a shuttle program that will fit within a $4 billion overall NASA budget.” To Low, an important question was “is there a phasing of the shuttle or, alternatively, a cheaper shuttle that will not reach the very high expenditures in the middle of the decade?” Low worried that despite “pushing this point for about six months now, we have not yet been able to come up with an answer. Perhaps there is no viable answer.” In a thought that would reoccur several times in the following months, Low suggested that perhaps there was no alternative but “the choice of foregoing the shuttle altogether for the 1970’s and starting it in the 1980’s.”33