The Showdown Looms

During the second half of December the White House prepared for a final decision on the space shuttle configuration. On December 16 the OMB space unit prepared a memorandum for the president discussing the “capa­bilities, size, and cost of the space shuttle” as “the one key Presidential issue remaining in the NASA FY 1973 Budget.” The memorandum made the case for the OMB shuttle approach, and noted that “the difference between the employment impact of the two versions of the Shuttle on 11/72 [an indirect way of saying ‘on the Presidential election’] is negligible. Announcement of a favorable decision for either version would be gratefully received by the aerospace industry.” The memo recognized that the larger shuttle could “transport certain intelligence satellites and a relatively few large astronomy satellites,” but that “achieving the extra capability of the larger version is not of near-term importance.” It suggested that “it is important to maintain the Titan III for national security. Dropping the dependable Titan III would place too much reliance upon a new and unproven system for vital national security missions.” Approving “the lower cost Shuttle would preserve the option to build bigger versions in the 1980’s if really required. There is a high probability that this will not be the case.” The memo recommended that “policy guidance be given to NASA that (a) the total investment cost of the Shuttle (including facilities and vehicles) is not to exceed $5 billion,

(b) the recurring cost per Shuttle launch is not to exceed $6 million, and

(c) the peak NASA budget during the rest of the 1970’s is not to exceed $3.2 billion (in 1971 dollars).” These cost constraints had been modified slightly upward compared to the December 11 OMB shuttle paper. With this guidance, “NASA and its industrial contractors [should] proceed at once to begin to define the best system that can be developed within the overall fiscal constraints.”27

Don Rice forwarded the draft presidential memo to Cap Weinberger together with a cover note that revealed some of the tactics that OMB was employing in its dealings with NASA. Rice noted that “the fact that the Shuttle decision is still open is our most significant bargaining point with NASA” with respect to the agency’s future. He suggested, “as part of the decision on the Space Shuttle, an understanding be reached with Dr. Fletcher about the need for the closure of a manned space flight center after Apollo and Skylab are completed.” In order to receive approval for the shuttle, NASA would have to agree in several years to reduce its institutional base, a particular OMB objective. But no action on this closure “would be initiated or announced” until after the November presidential election. Rice closed his note to Weinberger by suggesting that “it would seem unwise to approve. . . NASA’s request for a large Space Shuttle.”28

This draft memorandum was not forwarded to Richard Nixon; the space shuttle issue was instead addressed by his senior advisers. NASA was sched­uled to meet with OMB on December 29 to make its final recommendation with respect to the shuttle. In preparation, on December 28 there was a meeting in the Indian Treaty Room of the Old Executive Office Building at which Don Rice discussed the various shuttle configurations with senior White House staff such as Ehrlichman, Shultz, Weinberger, Flanigan, and international economics counselor Peter Peterson. Bill Anders held mod­els of the different configurations as Rice spoke. Later on the same day, Ehrlichman met separately with Ed David and Peter Flanigan to discuss the shuttle decision. During one of these meetings, Ehrlichman called Anders, asking which shuttle configuration would produce the most aerospace jobs in southern California. Anders replied “you don’t need to be a rocket sci­entist to know that the bigger the shuttle, the more the jobs.” Ehrlichman replied “OK, that will be the one” which would be approved. By the end of December, when the final decision on the shuttle design was to be made, there was thus a good understanding within the senior levels of the White House of the issues at stake.29 It was clearly time for a decision.