November 24, 1987

To the Congress of the United States:

In accordance with the requirements of section 252(c)(2)(C)(i) of the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987, Public Law 100 - 119 (the "Act''), I hereby transmit my report proposing alternative sequestration reductions for the Department of Defense for Fiscal Year 1988, together with a proposed joint resolution that provides for adoption of my report.

The alternative proposal exempts only the Strategic Defense Initiative, based on the priority of the program, and multi-year/firm fixed-price contracts, based on the need to preserve the economies inherent in our acquisition strategy. The exemptions in the alternative proposal are offset by reductions distributed uniformly across all other programs and accounts.

In making calculations for this joint resolution, we have used account outlay rates identical to those used in the November 20, 1987, sequester report issued by the Director of the Office of Management and Budget. The outlay increases that would result from adoption of the alternative sequestration reductions in my report would be offset by the outlay reductions also contained in the report.

As provided in section 252(c)(2) of the Act, I request prompt congressional passage of a joint resolution affirming these changes.

Ronald Reagan

The White House,

November 24, 1987.