154. Memorandum of Conference Between President Johnson and Chancellor Erhard0

The President held a preliminary budget meeting with the Joint Chiefs on November 29, emphasizing the need for economy and for closer supervision of defense contractors. The President agreed to consider reissuing NSAM No. 55 of June 28, 1961, which Taylor stated had been a satisfactory guidance for the Chiefs. “President Johnson asked each Joint Chief to give him an inscribed color picture to hang in his study ‘because he would be looking at them and thinking of them quite often in the future’ as he took over the awesome task of being President and Commander-in-Chief.” (Memorandum from Clifton to McNamara with attached memorandum of conference with the President by Clifton and Shepard; National Defense University, Taylor Papers, Taylor CJCS Memoranda) NSAM No. 55 is printed as Document 32.

The President referred briefly to Chancellor Erhard’s visit and noted that the Chancellor had informed him that they were now planning to spend slightly over 20 billion DM for German defense.1 Secretary McNamara expressed satisfaction at this development as, prior to the Chancellor’s discussion with the President, the previous planning figure had been 19.2 billion DM. He pointed out that the new figure represented a 40% increase over the past 24 months and that this was all to the good despite the fact that the German defense expenditures, as per cent of GNP, still did not match those of the United States.

Secretary McNamara briefly described the manner in which the FY ‘65 defense budget, beginning with the initial recommendations of the [Page 588]Service Secretaries, had been prepared in the Department of Defense. The Secretary particularly noted the participation of the Joint Chiefs of Staff in its development: their comments on each of the draft memoranda to the President prepared by the Secretary on the various program packages, their many and extensive discussions with the Secretary on the over-all budget as well as portions of the budget, and finally, the JCS corporate position on the DOD budget as submitted “that the program supported by this budget will provide effective forces in a high state of readiness for defense of the vital interests of the United States.”2 The Secretary stated that though elements of each Service’s recommended forces were still not provided for in the budget, he and all the Chiefs felt that—on balance—this budget would provide effective forces for our national security. The Secretary then suggested that the meeting proceed by having each Chief give his reactions to the proposed budget and his comments thereon.

General Taylor then expressed the appreciation of all the Joint Chiefs for this opportunity to discuss directly with their Commander-in-Chief the proposed defense budget and any resulting problems of concern to the individual Services. He compared the present extensive role of the Joint Chiefs in the development of the over-all force structure and defense budget vis-a-vis their much narrower participation a few years previously when he had been Chief of Staff of the Army. He noted that, at that time, each Chief was deeply involved in his individual Service submission whereas the JCS had little time or opportunity to consider thoroughly the impact of the defense budget as a whole. In contrast, the Joint Chiefs now spend a great deal of time on the overall defense budget and the force structure it supports; their consideration goes beyond the parochial views of their Services. Furthermore, the Joint Chiefs were privileged to consider and comment on any program change proposal, submitted to OSD, which they considered to be of significance. General Taylor noted that the JCS had participated in 104 meetings during which budgetary matters, force structure, or PCPs related to this year’s budget had been discussed. He also pointed out that the Joint Chiefs avoid dealing with uni-Service matters and that they had neither the intention nor the time to become experts on line items in the Services’ modernization or R&D programs. Such matters were dealt with through Service Secretary [Page 589]channels, while the Chiefs concentrated on their main role as principal advisors to the President on strategy and national security. General Taylor closed by indicating that the proposed budget was, over-all, a good one; nevertheless, there were some items which were of concern to the individual Services and he felt that each Chief should comment on these.

General Wheeler summarized the Army view by noting that the FY ‘65 Army budget was tight but that it would support the Army at the present level of strength and activity through the fiscal year. He pointed out that the Army’s budget had varied from $11.96 billion in FY ‘63 to $13.10 billion in FY ‘64 to $11.994 billion in FY ‘65. The President noted that this was about the same as for FY ‘63 and that the figures had been reduced slightly from Secretary McNamara’s original proposal.

General Wheeler indicated his concern over the PEMA portion of the budget which had dropped from $2.5 billion in FY ‘63 and $2.9 billion in FY ‘64 to $2.08 billion in FY ‘65. This budget would not permit major improvements in material modernization or in the buildup of reserve stocks.

[Here follow Wheeler’s detailed exposition of potential deficiencies in tanks, ammunition, and personnel, and McNamara’s description of improvements made in recent years.]

General Wheeler then returned to his last area of concern, the Nike-X, stating that he considered the lack of a ballistic missile defense the most serious deficiency in our defense posture. He considered the R&D FY-65 funding to be ample and the funding for the Nike Zeus Kwajalein tests to be satisfactory. He assured the President that the Nike-X development program was proceeding on schedule, calling particular attention to the work being done on the multi-function radar, the missile site radar, and the Sprint missile. He emphasized the need for a decision, by fall of CY 1964, to permit deployment of a Nike-X unit to the first operational site in September, 1969. This decision should be affirmative in view of the Soviet Union’s actions to protect and harden its ICBM sites.

General Wheeler then reiterated his views as to the tightness of the budget and the level of support it would afford the Army. He warned that reduction of these funds, should the Congress take such action, would be at the expense of the Army’s combat readiness and its potential combat effectiveness.

The President then queried General Wheeler as to whether he could stand on the budget and his readiness to defend it before Congress and before the reserve officers, who were likely to be critical.

General Wheeler replied affirmatively. He noted that, at a luncheon meeting, he had met with the Reserve Components Advisors to the Secretary of the Army and had informed them of the tightness of the budget [Page 590]and its probable impact on both the active Army and the reserve forces; in his view, they had accepted the facts in a most satisfactory manner.

The President then expressed his appreciation of General Wheeler’s stand, noting that no one would get everything that he wanted. Nevertheless, the over-all FY ‘65 budget would provide more than others previously had received and about as much as the country could afford. He then cautioned that we would get less than we need unless all exercised care in their defense of the budget. In his view, with a new President in office in an election year, administration officials would find the Congress probing extra deeply. He asked all present to stand together when they “got on the line”.

[Here follow Admiral McDonald’s exposition of potential deficiencies in ship conversions, ship overhauls, and aircraft procurement; General Shoup’s support of McDonald with regard to ship conversion and overhaul; and McNamara’s statement that he might need to reconsider and find additional money for ship overhaul.]

General LeMay then assured the President that the Air Force had received his austerity message loud and clear and was prepared to live with it. He noted that he was not concerned over the airlift and tactical air forces which the FY ‘65 budget would support. These forces were being modernized with a new transport and an advanced tactical fighter both actively under development. Though the rate of modernization was not all that he would like it to be, on balance he was not unhappy about these particular forces. On the other hand, he was deeply concerned in regard to strategic forces and air defense forces.

At this point General LeMay handed to the President a letter, dated 29 December,3 on his evaluation of both the strategic and the air defense situation as well as his proposal for an improved manned strategic aircraft and an improved manned interceptor. He indicated that all of the Air Force’s pertinent studies, as well as other studies of the DOD, had concluded that the strategic superiority of the United States would rapidly diminish from the present to 1968. He then referred to estimates of the rapid rise of the total megatonnage of Soviet weapons on the alert vis-a-vis those of the United States, as well as to study conclusions that the Soviets’ protected missiles could inflict greater damage on the U.S. than we could inflict on the USSR. This latter was due to the manner of distribution of the population of the two countries and the Soviet production of weapons of higher yields than those of the U.S. General LeMay emphasized the decrease in the budget for strategic forces from $9 billion in 1962 to a forecast estimate of less than $3 billion in FY 69.

[Page 591]

In response to a Presidential query, Secretary McNamara noted that the Air Force’s FY 65 budget totaled approximately $19.5 billion. General LeMay pointed out that even should a decision be made later to increase the $3 billion strategic forces budget for FY 69, it would be difficult to do so inasmuch as research and development activities in this field were diminishing rapidly and the present strategic systems were phasing out. Thus there would be but little which could be put into production.

In regard to the ballistic missile force levels, General LeMay’s view was that the budget would provide about 150 less missiles than the number necessary to attack all essential targets on a time-urgent basis. Fortunately, the manned bomber systems could make up for this deficiency.

At this point there was considerable discussion as to whether 50 Minuteman missiles had been deleted from the budget submitted by the Secretary.4 Mr. Gordon noted that on the basis of Secretary McNamara’s superb analysis of our strategic force requirements, which had accompanied his budget submission, the Bureau of the Budget had concluded that the addition of these 50 missiles would not effect any significant increase in the strategic power of the United States and was, therefore, not justified in view of the tight budget which the President had set as an objective. This action would save $150 million of new obligational authority from the FY 65 budget.

Secretary McNamara observed that there was no real disagreement concerning the need for these missiles in that Mr. Gordon had merely recommended postponement of procurement rather than cancellation. Further, he noted that proceeding with his program for these 50 missiles would result in an FY 65 expenditure of about $70 million despite the FY 65 NOA of $150 million and the over-all cost of $250 million associated with these missiles. He estimated that such postponement would increase the over-all cost of the missiles by some $35 million because of the “break” both in missile engine production-line programming and in the construction of missile sites. The Secretary also called attention to the fact that, while he felt it necessary for these 50 missiles to remain in the budget, General LeMay’s view was that these 50 missiles were the minimum essential number and that, additionally, 150 more missiles would be desirable. General LeMay agreed with the Secretary and stated that he favored a 1400 Minuteman force by the end of FY 69 as opposed to the Secretary’s recommended force level of 1200 Minuteman missiles.

Mr. Gordon stated that he would accept the Secretary’s judgment regarding the additional costs that would be engendered by postponement [Page 592]of the funding for the 50 missiles in question; thus, he would agree with the program proposed by DOD.

The President stated that it just did not make good sense to increase the over-all cost of this program by $35 million in order to save $70 million in expenditures in FY 65. He noted, too, that it would be possible for General LeMay to defend the budget as best he could if the number of missiles he considered minimum essential were included even though he realized that General LeMay considers it desirable to have 150 additional missiles. Thereupon, it was generally agreed that these 50 Minuteman missiles should be included in the FY 65 budget.

General LeMay then went on to state that his greatest worry was due to the absence of anything new coming along in the way of a manned strategic system. Under present force programming and aircraft utilization rates, it was apparent that the B-52s would have an average of more than 6000 airframe hours before they were phased out. Modifications were already being made to the B-52 fleet due to the structural stress imposed by the increasing use of low-level tactics. In contrast, he noted that previous aircraft in the strategic fleet had been phased out with an average airframe time of 2000 to 3000 hours. This problem, in conjunction with the diminishing capability of the B-52 aircraft for effective mission performance in the increasingly sophisticated Soviet air defense environment, had convinced General LeMay that it was essential to develop a new manned bomber to replace the B-52.

The President observed that this increasing trend toward relying solely on missiles as our means for strategic delivery was a matter which had worried him over the past several years. He then queried General LeMay as to his recommendations.

General LeMay called attention to the fact that over the last year various study groups within the Air Force, including Project Forecast, had been studying the requirement; from this effort a new proposal for an improved manned strategic system had evolved. He was not referring to the B-70, which he considered “dead”, but rather to an aircraft to be designed primarily for low-level penetrations at subsonic speeds with a capability for high performance at high altitude, i.e., speeds in excess of Mach 2. The advanced state of the art which only now permitted such a design was mainly due to the availability of the new variable geometry wing. The basic armament would consist of short-range air-to-surface missiles in addition to weapons now in the inventory; integral to this system, there would also be a reconnaissance subsystem consisting of the necessary radar, infra-red, and photographic sensors. He estimated that it would require $5 million of FY 64 funds and $50 million of FY 65 funds to get the design studies, program definition, and advanced development of long-lead items proceeding in an orderly fashion. To the President’s query as to whether this represented the money required for [Page 593]studies as to what should be done to replace the B-52s, the Secretary noted that the proposal was not merely a study, but the initiation of development of a new aircraft. He estimated that the ultimate cost of this new weapons system would probably be on the order of $10 billion. General LeMay generally agreed in that he estimated the ultimate cost would be close to $9 billion.

The President noted again that he was interested in this problem and wished to explore it further. However, he pointed out that at this stage he did not wish to become committed to a $9 billion project; he then asked what course of action was open if a follow-on bomber were not provided.

The Secretary indicated that, following the phaseout of the present bomber fleet, delivery of our strategic weapons could be handled by the employment of land-based ballistic missiles and the sea-based Polaris missiles.

General LeMay then reaffirmed his belief that it was necessary to maintain a proper “mix” in our strategic forces. He presented his misgivings in regard to an all-missile force which would not have the discrimination nor the reliability of the manned strategic systems and which could not furnish to the decisionmakers the flexibility of response or the multiple options so necessary in our strategic forces. Further, the missiles did not have the reliability of the manned systems because of the vulnerability of the total capability of the missile system to a single, unforeseen system deficiency. On the other hand, should the system not be working properly in a manned bomber, the crew could fly to the target, identify it, and drop their weapons thereon.

The Secretary indicated the actions under way, in line with the Joint Chiefs recommendations, for appropriate tests to increase the reliability of our ballistic missiles. He expressed confidence that the $500 million program which he had proposed for this purpose would meet with such success that, in the timeframe General LeMay was addressing, the reliability of our missiles would meet the objectives which had been set. The Secretary detailed the reasons as to why he was not at all sure that the Air Force proposal was the answer to the problem which was causing the concern expressed by the President and by General LeMay. He noted that this proposal was not for a traditional bomber but for an airborne platform from which missiles could be launched. Such a low-level penetrator would be extraordinarily complex and a very expensive system to develop. The air-to-surface missiles it carried would represent an advanced state of the art and, in his opinion, would almost certainly be “unreliable”—if the missiles in our present inventory could be so termed. The testing program for such a system would meet with the same problems with which we are confronted today, e.g., the difficulty of finding a way to test-fire the complete system to include the nuclear warhead. [Page 594]He expressed doubts as to the capability of this system to “gravity drop” weapons inasmuch as it had not been specifically designed for this function. The Secretary summarized by stating his opinion that the proposed system would be unreliable; notwithstanding, should the system turn out to be a reliable one, the Air Force did not as yet have a plan or a concept for its employment in wartime. In the ensuing discussion, Secretary McNamara and General LeMay set forth the pros and cons on these points.

To the President’s query regarding his support of the cited $55 million figure for FY 64 and FY 65, the Secretary responded that he was absolutely against it until such time as both he and the Joint Chiefs of Staff were given a chance to study the proposal in detail. General Taylor noted that the Joint Chiefs had been unaware of the proposal and were not prepared to support it until they had the opportunity to consider it carefully.

The President noted that there was no need to make a decision right at the moment, though it was of the utmost necessity that he have a firm budget by the 8th of January so that he could complete preparations for its submission to the Congress. There was nothing to preclude a later request to Congress for funds which were deemed necessary. He suggested that General LeMay get busy and formally forward his proposal to the Secretary who had indicated that he did not have the benefit of advice from the Joint Chiefs of Staff. General LeMay pointed out that his proposal was contained in the letter he had just delivered, both to the President and to the Secretary. Further, he was not requesting an increase in the over-all Air Force budget; he proposed to obtain the necessary funds by reprogramming his Air Force budget, as necessary, from items of lower priority. The Secretary remarked that he did not think it feasible, or necessary, to come to a decision by the 8th of January. He indicated it would be wise to stand on the present budget and to study the Air Force proposal later.

The President summed up by requesting General LeMay to submit his proposal to the Secretary and to the Joint Chiefs. Then, after it had been “worked over”, this matter should again be brought up to him as he wished to explore it further inasmuch as he knew many of his old colleagues on the Hill were worried over this trend toward an all-missile force. He closed by stating that he wished everyone to stand by him on this budget in their appearances before Congress.

General LeMay then turned to the subject of air defense wherein he stated that the picture was dismal. True, intelligence estimates indicated a slight degradation of the threat. However, our available intelligence was not too good and the Russians had been successful in hiding their new developments. He referred to several aircraft that the Russians had built and, in some cases, had flown in air shows before we had been [Page 595]aware of their existence. He saw no great reason to believe that we would do much better in the future in this respect.

Meanwhile, according to General LeMay, our air defense capabilities were going downward. He delineated several reasons: our radar and control systems were deteriorating, in that portions of the SAGE system were being phased out prior to appropriate replacement by the new BUIC system; our current interceptors were becoming obsolete, and even these aircraft were gradually being phased out by attrition; further, we had terminated production of our air defense interceptors.

For these reasons, General LeMay felt it was urgent to get on with the development of an improved manned interceptor. He observed that in his letter to the President he had proposed the development of a long-range aircraft which could intercept and destroy enemy bombers before they had reached the stand-off range from which they could launch air-to-surface missiles at the continental United States. The current interceptor force did not have that capability. He noted that considerable funds had already been expended and that $40 million in FY 65 funds would enable the Air Force to proceed with the orderly development of long-lead items for the interceptor and its fire control system. Thus, he was requesting the authority to reprogram $90 million, from the FY 65 Air Force budget, for both the improved manned strategic aircraft and the manned interceptor.

The Secretary, after alluding to a classified project, stated that the basic issue was not whether such an aircraft should be developed but, rather, whether such an interceptor should be produced and deployed. This issue was related to General Wheeler’s remarks regarding the ABM. He noted that if, next fall, the decision were made not to deploy the Nike-X units, it would not be reasonable to proceed with production and deployment of improved interceptors inasmuch as the country could be destroyed by ballistic missile attacks. Mr. Gilpatric observed that there was a further interrelation in this issue, i.e., the decision as to whether or not to press forward on civil defense. Secretary McNamara summed up by stating that all three of these matters would be up for decision in the latter part of 1964.

General LeMay voiced his opinion that the decision on the improved interceptor should not be contingent on these other decisions. He pointed out that it was also necessary to protect the sovereignty of this country’s air space and that, without such an improved interceptor, this requirement could not be met once supersonic transports became operational. He also observed that the Soviets had indicated that they were working on such an aircraft and that the British, working in concert with the French, had announced that their supersonic transport would be flying in 1968.

[Page 596]

At this point the President changed the subject of discussion to the development of a supersonic transport aircraft by the United States. He stated that, in his opinion, the Secretary of Defense was the proper person in our government to supervise this gigantic and expensive project. Further, he indicated that he was thinking of a Board to consist of Mr. Halaby, Mr. Black,5 Mr. McCone, and Secretary Dillon, with Secretary McNamara as Chairman; such a Board should “run with the ball” until it encountered real trouble. The Secretary laughingly noted that this would not take very long.

The meeting adjourned at 1328 hours CST.

  1. Source: National Archives and Records Administration, RG 218, JCS Records, CJCS 031.1, Meetings with the President. Top Secret. Attached to a note by Brigadier General M. J. Ingelido, Secretary of the JCS, who drafted the memorandum. McNamara’s brief handwritten notes of this conference are in the Washington National Records Center, RG 330, OSD Files: FRC 71 A 3470, Budget Memos to the President. According to the notes, all the Joint Chiefs attended the meeting, as did McNamara, Gilpatric, Clifton, and Kermit Gordon, Director of the Bureau of the Budget.
  2. Chancellor Ludwig Erhard of the Federal Republic of Germany was the President’s guest at the LBJ Ranch December 28-29. Documentation on the visit is in Foreign Relations, 1961-1963, vol. XV, Documents 242 and 248.
  3. The quotation is from a December 16 memorandum from the JCS to McNamara that was prepared in response to McNamara’s request, in a November 30 memorandum to the Chiefs, for a statement of concurrence in his recommended program. The full sentence begins: “Although the force structure does not include all the forces recommended by members of the Joint Chiefs of Staff, or by the Chiefs of Staff in their service capacities, the Joint Chiefs of Staff agree . . .” The December 16 memorandum includes an appendix listing those JCS recommendations that McNamara did not accept. (Both in the Washington National Records Center, RG 330, OSD Files: FRC 71 A 3470, McNamara Final)
  4. Not found.
  5. Gordon recommended this deferment in a December 9 memorandum. (Washington National Records Center, RG 330, OSD Files: FRC 71 A 3470, Back-Up for Discussion with the President)
  6. Najeeb Halaby, Administrator of the FAA, and Eugene Black, former President of the IBRD.