Memorandum by the Special Assistant to the Secretary of State for Mutual Security Affairs (Martin) to the Secretary of State1
- Fiscal Year 1954 MSP
Problem: To determine the position of the Department of State on the size of the FY 1954 Mutual Security Program required to achieve U.S. foreign policy objectives.
Discussion: In the absence of policy guidance as to (1) the modifications in U.S. foreign policy objectives which may affect the size of the FY 1954 MSP, and (2) the extent to which the proposed FY 1954 MSP should be cut to contribute to the goal of a balanced budget, DMS has felt compelled to secure agency reactions to arbitrary cuts in the FY 1954 MSP. It has asked MSP agencies to comment on the effect of such cuts on programs and the effect on present U.S. objectives of the reduced programs.
For example the Department of State has been asked to report on the effect of hypothetical cuts of over 30% and of over 60% in [Page 582] the programs totalling 540 million dollars which we have proposed for economic and technical assistance to Near Eastern and South Asian countries.
In preparing this material the responsible officers in the Department have been asked to re-examine programs with care to include only those funds which on the basis of the latest data must be available in FY 1954 to accomplish U.S. objectives, but to assume no change in basic U.S. policy objectives.
There is attached as Annex A a summary of the position which it is proposed that the Department take with DMS on those programs for which State has operational responsibility. Our presentation of the harmful effects of these cuts, when they go below the levels we are now prepared to accept, is designed to influence the recommendations of the Director for Mutual Security to the Director of the Bureau of the Budget and of the latter to the President. The basic issue at this point will be how large the foreign aid program should be in the light of the need to balance and reduce taxes.
Later on we shall have for review from the standpoint of U.S. foreign policy papers prepared by the Department of Defense and the Mutual Security Agency on the programs for which they have operational responsibility. The State programs represent only a little over $600 million out of the total MSP proposed for FY 1954 of $7.6 billion.
Conclusion: It is essential to insure that the size of FY 1954 MSP to be submitted to the Congress does not go below a level which can effectively implement current foreign policy objectives. Therefore the broad lines of the program should be reviewed at the top policy level in the Department of State before action is taken by the DMS or the Bureau of the Budget.
Recommendation: That you approve the positions contained in the attached Annex A, covering those programs for which the Department of State has operational responsibility.2[Page 583]
- Sent through McWilliams of S/S. Cleared in substance by Jernegan, Cale, Allison, Andrews, Linder, Brown of H, and Under Secretary of State Smith.↩
- A handwritten notation by Roderic L. O’Connor on the source text reads: “Sec noted & approved subject to several minor p[oin]ts discussed by me with Mr. Newman.” The reference is presumably to George S. Newman of S/MSA.↩