Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

307. Memorandum from Keeny to Bundy, November 30, 1963¹

November 30, 1963

SUBJECT

• November 27 Meeting on the DOD Budget

The principal points covered and decisions reached at the November 27 meeting with Secretary McNamara on the DOD budget were as follows:

I. Strategic Retaliatory Forces

1. Minuteman. Secretary McNamara did not accept the BOB proposals for reduced MM force level, slippage in improved MM production, or delay in the improved retrofit program, and it was agreed that these issues should be submitted to the President. Secretary McNamara expressed interest in Dr. Wiesner’s question concerning the apparently excessive nature (10 per cent per year) of the reliability firing program and requested Drs. Brown and Wiesner to determine how this related to the production and retrofit programs. As a follow up, I have discussed this question with Dr. Brown’s staff; and, while it is clear it represents a major policy issue for the future, a cutback here would not lead to significant savings in FY 65.

2. B–70. Secretary McNamara agreed that he was prepared to cutback the third of the three B–70’s provided a positive decision was made on handling of the classified project with which you are familiar. It was noted that this would permit savings of the order of $80 million and that some $3 million per month was being spent on this aircraft. Secretary McNamara suggested that he might enter the third aircraft under NOA but omit it under expenditures.

3. B–47 phase down. Mr. Gordon apparently decided to withdraw this issue.

II. Continental Air and Missile Defense

1. Phase down on active interceptor squadrons. Secretary McNamara agreed that this should be done but felt that for political reasons they wanted to defer the question until next year.

2. BMEWS Improvements. After a technical justification by Dr. Brown with which Dr. Wiesner and I agreed, the BOB decided to withdraw their objections on this issue.

3. FAA air traffic control systems. After consideration of present FAA schedules for this new system, it was decided that it would be technically and operationally acceptable to defer $42 million in this area.

III. Anti-Submarine Warfare

1. Nuclear attack submarines and submarine tender. There was an extended discussion of the merits of nuclear attack submarines in which, I believe, the OSD representatives made a very poor case for the 6 submarines in the DOD budget. Mr. Gordon maintained the BOB position that all 6 submarines and the submarine tender should be deferred with a saving of $502.5 million in FY 65 NOA. Dr. Wiesner suggested that a buy of 2 or 3 submarines, if this were necessary to keep the yards busy, would be the best solution. Secretary McNamara agreed he would give further consideration to the OSD position on this issue.

2. SUBROC. It was agreed to split the difference on this item and support continued production at the minimum sustaining level of 5 per month with a saving of $20 million.

IV. Army and Marine Ground Forces

Secretary McNamara indicated that he could take no position on the problems raised by the Bureau of the Budget until he had discussed each of the individual subject items with Secretary Vance.

V. Holdover Items

1. Command, control and communications. Secretary McNamara stated frankly that he did not understand the mode of operation for command and control and directed that they operate within a budget of $158 million rather than $208 million. Dr. Wiesner reported that he had not yet been able to get a complete report on communication procurement from DOD but that, as far as he had gone, the program appeared to be in a pretty good shape with the possible exception of certain switching equipment which might be incompatible. It was agreed that this question would be left open.

2. F4C/D/E Aircraft. There was an extended discussion of the technical characteristics of F4C/D/E aircraft and the nature of several alternative production programs. Unfortunately, neither Secretary McNamara nor Mr. Gilpatric were present during most of this discussion. Despite the instructions given at the last meeting, the technical analysis of the aircraft and alternative programs prepared by the Comptroller was not coordinated with Dr. Wiesner and was, in fact, not available until just before the meeting. Alternative I, which cuts 100 aircraft from FY 65 buy, was not acceptable to him since it saved only $120 million in FY 65 and involved an increase of $40 million in total program costs. He stated that Alternative 2, which cuts 326 aircraft from the FY 65 buy at a saving of over $600 million, was unacceptable to him since it constituted too large a reduction in aircraft in a 66–68 time frame. He made a major point of the advantages of the ferry range of the F4C’s over existing aircraft. It was agreed to keep Alternative I as a budget issue. [Subsequently, I have learned that the savings on aircraft alone (not including associated equipment) of Alternative I would, in fact, be $40 million more than those reported by OSD on the basis of McDonald Aircraft estimates and that the additional program costs, because of deferral, would only be $7 million and not $40 million. On further investigation, we also question whether the ferry range argument is as important as McNamara believes. These factors might affect McNamara’s thinking on this issue. There is a real split on this one within OSD since the Comptroller’s office wants F4C’s as fast as possible and DDR&E essentially agrees with our criticisms of the program. If we are to make any progress on this highly technical issue, I believe it should be directly with McNamara and not as a Presidential issue.]

3. MMRBM. It was reported that nothing was being done to direct the development of this system specifically toward land-based deployment suitable for use only in Germany. Secretary McNamara stated that the program would continue to be carried out in this manner.

4. Nuclear weapons effects tests. It was agreed that the items discussed in the previous meeting would be removed from the program.

5. Program 437 (Thor-antisatellite on Johnson Island). Dr. Brown reported that the costs had indeed grown in the manner described by the BOB. Secretary McNamara stated that this was unacceptable and the Air Force had exceeded the authority he had given them. He could not understand why they could have a four-shot research and development program for $24 million and then required an additional $49 million for two additional shots. Secretary McNamara directed that FY 64 funds be frozen until the program was better defined and that additional funding for FY 65 should be limited to $12 million.

6. Typhon. It was agreed that the system would be cancelled but that sufficient funds would be kept in FY 65 to permit test firing with equipment already procured since this system involved basically new types of radar equipment that might relate to future developments.

7. Space. The BOB space report was not discussed. It was agreed that a meeting with Mr. Webb would be scheduled for Saturday, 30 November. Secretary McNamara stated that he was anxious to cancel Dynasoar but could only do this if a deal could be worked out with NASA on the future of Gemini.

8. MAP. There was an extended discussion of the MAP problem. Secretary McNamara stated that the legislation should be modified so that the Secretary of State would not have to approve the MAP funds since this procedure essentially referred differences between State and DOD for Congressional resolution when this should be done within the Administration. He stated that the following steps should be taken: (1) cut $1.4 billion from the military aid budget and (2) divide the $1.4 billion into two components to be submitted by the DOD, namely: (a) one component as part of the normal DOD request to cover areas such as Viet Nam where U.S. forces are involved and (b) a second component for grant aids for areas such as Thailand which could be treated either as part of the normal DOD budget or as a separate bill submitted by the DOD.

9. Classified projects. It was agreed that these would be discussed after 6 or 7 December since the BOB would not have completed its review of government-wide classified projects until that time.

10. Family housing. Secretary McNamara spoke very strongly against any cuts in the DOD proposals for family housing and the BOB apparently withdrew this issue.

11. Civil Defense. Secretary McNamara stated that he had decided to assign $350 million, including $175 million for incentive shelters to civil defense. It would be Mr. Gilpatric’s job to decide, in consultation with Dr. Wiesner, how the additional $175 million would be allocated. In view of the complications introduced by the failure of Congress to act on the FY 65 Civil Defense appropriation, which influences the manner in which the $350 million would be best utilized, it was suggested that civil defense be entered as a single line item in the budget without any breakdown at this time.

It should be noted that the outcome of the meeting on a number of items was probably effected by the fact that both Secretary McNamara and Mr. Gilpatric were forced to leave the meeting for extended periods during the discussion. For example, Secretary McNamara missed most of the discussion of the F4C and the nuclear attack submarine. Consequently, he did not have an opportunity to hear how unimpressive the response of his colleagues was to the various criticisms that were advanced against these programs and heard only a summary of the alternative programs that one could adopt in these and several other fields.

Spurgeon Keeny

1. Readout of November 27th budget meeting with McNamara. Secret. 5 pp. Johnson Library, National Security File, Agency File, Def Bud 65.