124. Memorandum of a Conference with the President, White House, Washington, June 27, 19571
OTHERS PRESENT:
- Secretary Wilson
- General Randall2
- General Goodpaster
Secretary Wilson said that the Chiefs have been developing the Joint Strategic Objectives Plan for 1961. Although supposed to finish at the end of May, they had not resolved differences, and Secretary Wilson had not wanted to highlight split views at this particular time. He did feel, however, that it is time to cut down force strengths.
The President said he would like to see Defense prepare to go ahead with the reductions without advertising them. The reductions are a major bargaining point in our negotiations with the Russians. Secretary Wilson said he thought that 40% of the reduction should come from our forces overseas and afloat. He recalled that the President had agreed last spring to taking out 35,000 from Europe by streamlining. He felt 40,000 could be gotten out of Japan by early next year. He would like to get another 25,000 through decreases overseas.
Mr. Wilson then commented on budgetary problems. The President said he did not wish to get into the position of setting the exact dates for each component of the budget but instead felt that he would simply set an order of magnitude. He thought cuts should be made in the unobligated carryover of funds at the end of fiscal years. He said he wanted to get down to the point where NOA, expenditures and carryover stay steady, with NOA and expenditures at about the same figure. Mr. Wilson said that the tightest part of the budget for FY–58 will be the attempt to get expenditures below $38 billion. The President suggested that the unobligated carryover be reduced by perhaps $3 billion. This would allow flexibility in obligating.
In response to a question by Mr. Wilson, the President said he felt that cuts should be begun as soon as the Administration receives the appropriation bill. Mr. Wilson said that in two or three weeks he and Admiral Radford would bring in a plan for the President to look at.
Mr. Wilson then referred to another problem. The overexpenditures, which are chiefly in the Air Force, have thrown the program of obligations out of balance. Inflated costs and acceleration of the missiles program are chiefly responsible. If the services are called on to cut back to $38 billion it will be necessary to revise the program. This [Page 532] cannot be done simply in the service that overspends. Specifically, funds must be taken away from the Army, which did not overspend, in order to provide added obligational authority for the Air Force, which did. This action must be taken within the next month. The President recognized the difficulties, but said it is up to Defense to prepare the best program that can be arranged.
Secretary Wilson asked how stiff the $38 billion figure is for FY–58. The President said that Defense should work for the $38 billion figure in order to avoid the effort to increase taxes that would otherwise be required. Mr. Wilson said he would put figures together to work for it. He said that the figures might run a little higher due to the effect of inflation.
Referring again to the question of personnel, the President said it should be discussed in terms of a continuing process of cutting out personnel, attempting to avoid the use of specific figures such as a $2½ million figure.
Secretary Wilson said that the expenditure rate for the first half of 1958 will be greater than for the last half and will, as a result, carry us very close to the debt limit. The President said this simply means the cut backs will have to be made faster.
Secretary Wilson said he would have a plan for the President in mid-July.3
Brigadier General USA
- Source: Eisenhower Library, Whitman File, DDE Diaries. Secret. Drafted by Goodpaster on June 28.↩
- Brigadier General Carey A. Randall, USMC, Military Assistant to the Secretary of Defense.↩
- See Document 133.↩