Also enclosed for the information of the Council is an Annex showing foreign
aid and other national security expenditures in FY 1955 and 1956 and the distribution of foreign grant aid in
FY 1955.3
[Enclosure]
Review of Military Assistance and Supporting Programs
1. a. Note that a high proportion of U.S. military and economic
assistance is received by Turkey, Iran, Pakistan, Vietnam, Formosa and
Korea; and that in each of these countries the armed forces (1) “do not
represent total military requirements,”5 (2) cannot be supported by
the local economy now or in the foreseeable future, and (3) require U.S.
subsidies at an annual cost ranging from $100 million to $800 million to
each of these countries
b. Direct an appropriate group or agency to proceed urgently with a study
of the assistance programs for these countries; and direct the NSC Planning Board, in the light of such
study, to review the relevant NSC
policies. It is understood that such study and
[Page 42]
review will not delay preparation and presentation
of the FY 57 budget now in progress.6
| Majority Proposal |
Budget–Treasury Proposal |
2. Agree that in the interest of greater flexibility the
Congress should be requested to make available to the President,
in addition to the specific appropriation for military and
economic assistance, a fund of the order of several hundred
million dollars which may be used, in his discretion:
- a.
- For unforeseen and essential military assistance needs
arising from changes in the international
situation.
- b.
- For economic assistance for development and related
purposes wherever new or expanded programs appear in the
U.S. interest.
|
2. Agree that, in order to provide flexibility to meet
unexpected developments or take advantage of future
circumstances, a substantial portion of the total FY 1957 foreign aid program should
be in the form of a contingency fund. |
3. Agree that in present circumstances, it may be desirable to seek
greater latitude in the granting of military and economic assistance
than is permitted by existing statutory requirements relating to
commitments or policies of the recipient countries; and accordingly
request the departments and agencies concerned, without delaying
preparation and presentation of the FY 57
budget, to study existing restrictions applicable to their respective
programs and advise the Council of the results of such study.
4. Request the responsible Departments and Agencies to devise
programming, clearance and allocation-of-funds techniques for military
assistance programs aimed at reducing the time span involved between the
initiation of a new fiscal year programming and the clearance for
delivery of the first items to be shipped.
5. Recognize that the nature, scope and objectives of U.S. economic aid
are matters requiring urgent review, particularly in the context of
current Soviet moves in the economic field in the underdeveloped areas;
request the International Development Advisory Board, chaired by
Eric Johnston, to review U.S.
economic aid programs
[Page 43]
and to
report to the Council through the Director, ICA, on the level and types of economic assistance required
in the underdeveloped areas in order best to achieve the long-range
objectives of the United States.
[Here follow sections entitled “General Questions,” “Questions Relating
to Particular Countries and Areas,” “Organizational Questions,” and the
annex, “Foreign Aid and Other National Security Expenditures.”]
