20. Memorandum From Secretary of Defense McNamara and the Director of the Bureau of the Budget (Bell) to President Kennedy0


  • Revisions to Defense FY 1962 Budget

This joint memorandum of the Secretary of Defense and the Director of the Bureau of the Budget summarizes the results and present status of further reviews of the proposals for revising the FY 1961 and FY 1962 Defense programs and budget which were submitted to you by the Secretary of Defense with his memorandum dated February 20, 1961.1

Attachment I lists the items and amounts on which there is currently agreement between the Department of Defense and the Bureau of the Budget, assuming that you approve the related policy recommendations of the Department of Defense. The changes in the amounts from those appearing in the attachments to the February 20, 1961, memorandum of the Secretary of Defense result partly from refinements by Defense in the earlier estimates and partly from adjustments recommended by the Bureau of the Budget and concurred in by the Department of Defense.

We have agreed to defer any request for appropriations for an increase in airborne alert over the amounts now included in the FY 1962 Budget. In lieu thereof we propose to rely on continuation in FY 1962 of the present legislative authority to incur a deficiency, if necessary, to support an airborne alert. The FY 1962 Budget now includes funds for a 1/8 “on-the-shelf” air alert capability and 12 sorties per day. Upon your determination at any time during the fiscal year that further airborne alert action is necessary, the Defense Department could provide for the alert on a deficiency basis. We estimate that the additional cost involved in increasing the number of daily sorties from 12 to 30 should be at the rate of $176 million per annum.

Attachment II lists the items and comments on which there is currently disagreement between the Department of Defense and the Bureau of the Budget, together with their respective recommendations.

The items covered in the attachments are limited to those contained in the Department of Defense proposals of February 20, 1961, plus the Bureau of the Budget proposal to cancel the last four Titan II squadrons [Page 57] which was also discussed with you at the meeting on February 21, 1961. Several additional matters involving possible further adjustments to the Defense FY 1962 budget will be treated separately. These include, among others, the impact on the FY 1962 budget of possible actions to close installations, the possible additional fund requirements for retired pay, repair of fire damage to the USS Constellation, cost increases for Minuteman, and a classified project.

The specific amounts of the budget amendments required for each appropriation account will be determined on the basis of your decisions with respect to the program amounts shown in Attachments I and II and the items to be treated separately. Except for a possible FY 1961 supplemental for retired pay, all FY 1961 requirements, including those indicated on Attachments I and II, are to be financed from funds presently available pending the provision of additional funds in the 1962 appropriations where necessary.

Secretary of Defense Director of the Bureau of the Budget

Attachment I2


[Page 58] [Page 59]
(Millions of Dollars)
FY 1961 FY 1962
Strategic and Continental Air Defense
1. Command and Control
a. SAC Airborne Command Post + 3.7
b. Airborne Communications Relays + 6.2 + 2.0
c. Sea-Mobile Command Post + 0.6 + 0.9
d. Improvements in Alternate Joint Communications Center + 3.0
Sub-Total + 6.8 + 9.6
2. Bomber Program
a. Airborne Alert *
b. Expanded B-52 Alert Force by 50% + 6.6 + 9.0**
c. Bomb Alarm at BMEWS Sites
d. Bomb Alarm Output at SAC Bases + 2.0
e. Expanded Ground Alert and Accelerated Phase-out of B-47 -10.1
f. Acceleration of Midas Development +60.0
g. Snark Early Phase-out - 6.9
Sub-Total + 6.6 +54.0
3. Air Defense System—Restoration of GCI to Radar Sites +23.0
4. Missile Reliability
a. Polaris Confidence Firings +42.0
b. Minuteman Confidence Firings +35.0
c. Minuteman 2nd Wing Block Changes +49.0
Sub-Total +49.0 +77.0
5. Reconnaissance—Bulls Eye and Special National Security Agency Requirements +61.0
6. Acceleration of Polaris A-3 +60.0
7. Numbers of Missiles
a. Polaris Initial Acceleration +597.4 -597.4
b. Polaris Initial Acceleration—Associated Items + 45.0 + 70.0
c. Polaris—Cancel Long Beach Installation - 57.7
d. Minuteman 2X Production Capability + 17.0 + 19.0
e. Accelerated Minuteman Deployment Rate + 50.0
Sub-Total +659.4 -516.1
8. Options for a More Flexible Thermonuclear Strategy
a. Increased Flexibility in Minuteman + 6.0 + 20.0
Total—Strategic and Continental Air Defense Proposals Agreed Upon +727.8 -211.5
Limited War
3. Readiness, Training and Exercises +149.0
4. Air Transport + 89.0 + 83.3
5. Ships (LPD Amphib. Transport, Dock) + 40.0
6. F-105 Aircraft Modification + 25.0
7. Ammunition, Equipment and Stock + 13.0 +217.0
8. Research and Development (not separately reported) + 70.0
Total—Limited War Proposals Agreed Upon +102.0 +584.3
Research and Development
2. Certain Fire Power, Mobility and Communications Programs + 20.0
3. Tactical Fighter or Fighters + 45.0
4. Eagle/Missileer
a. Missileer
b. Eagle - 10.0 - 47.7
5. Conventional Weapons for Limited War (Navy) + 12.0
6. Other Navy Programs + 20.0
8. Skybolt (GAM-87) + 50.0
9. Dynasoar +30.0
10. ANP -25.0
11. Missile Penetration Aids + 20.0
12. Hyper Environmental Test System + 10.0
13. Saint + 14.0
14. Discoverer + 30.0
15. Defender + 21.0
Total—Research and Development Proposals Agreed Upon - 10.0 +199.3
Recap of Agreed Upon Proposals
Strategic and Continental Air Defense +727.8 -211.5
Limited War +102.0 +584.3
Research and Development - 10.0 +199.3
TOTAL +819.8 +572.1

Attachment II3


[Page 60]
Proposed Revisions
DOD BOB Variance
1. Polaris, Second Acceleration (Strategic: Item 7c) +330.0 +1,108.0 +778.0
2. Titan II, Cancellation of Last Four Squadrons - 200.0 -200.0
3. Nike-Zeus, Long Lead Production (Strategic: Item 8b) + 82.8 - 82.8
4. Military Personnel, Increased Strength
Army Special Forces (Limited: Item 1) + 19.0 - 19.0
Army, Navy and Marines (Limited: Item 2) + 35.0 - 35.0
Air Force Net Increase, Expanded + 9.0 - 9.0
B-52 Alert Force (Strategic: Item 2b)
Sub-Total + 63.0 - 63.0
5. Advent (R&D: Item 1) + 22.7 - 22.7
6. B-70 (R&D: Item 7)
FY 1962 -108.0 - 358.0 -250.0
FY 1961 - 100.0 -100.0
Sub-Total -108.0 - 458.0 -350.0
Recap of Proposals Currently in Disagreement
FY 1962 +390.5 + 550.0 +159.5
FY 1961 - 100.0 -100.0
TOTAL +390.5 + 450.0 + 59.5

1. Polaris Second Acceleration

Defense Proposal

Provide $330 million for incremental funding on a minimum basis to initiate with FY 1962 funds work on 10 additional Polaris submarines (Nos. 20 through 29).

Budget Recommendation

Assuming the 10 submarines are to be built, include $778 million additional to provide funds on a “full funding” basis in accordance with regular budgetary practices in the shipbuilding area. Defense recommendation would definitely commit the Government to construction of the 10 submarines. Proposed partial financing will probably be criticized in Congress as a dodge to reduce the total amount of the 1962 budget amendment and would be an unfortunate precedent from a management standpoint. The $778 million will have to be included in the 1963 budget as an increased fund requirement without a corresponding increase in the program.

Defense Recommendation

The inclusion of $778 million additional appropriation in FY 1962 is not considered necessary. The long lead components for the additional submarines can be fully financed without these funds. The $778 million would be required in FY 1963 for financing the ship construction per se. However, this is primarily a fiscal policy matter for decision by the President. Defense would not object if the decision was made to include the additional funds in FY 1962.

2. Titan II—Cancellation of Last Four Squadrons

Budget Proposal

Consider, as a partial offset to the substantial increases in the proposed budget revisions, the cancellation of the last 4 of the presently [Page 61] planned 8 squadron Titan II program. Total savings would be about $500 to $525 million, of which between $200 and $225 million, consisting of amounts in the present 1962 budget and recoupments of 1961 funds, could be applied to reduce the proposed 1962 budget amendments. As shown below, the reduction would eliminate from the forces only 36 operational Titan II missiles which would not come into the force until the third quarter of 1964, by which time the inventory of Polaris and Minuteman missiles will be increasing rapidly, and an even greater increase in Minuteman missiles could be accomplished under the flexibility provisions recommended in the budget amendment.

End FY 1963 End FY 1964
Atlas 132 132
Titan I 54 54
Titan II (first 4 squadrons) 27 36
Minuteman 150 540
Polaris 192 384
Total operational missiles 555 1,146
Titan II (last 4 squadrons) -0- 36
Minuteman (additional possible) 260

It is suggested that the equivalent additional deterrent posture could be achieved in this period, if necessary, with additional Minuteman missiles in lieu of the last 4 Titan II squadrons and that the special advantages of the Titan II missile (longer range and heavier warhead) may be provided to a sufficient degree by the first 4 squadrons which, under the proposal, would not be cancelled. It would be desirable not to defer the decision since initial construction contracts have been let and obligations through FY 1962 will be about $250 million.

Defense Recommendation

The cost comparison made by the Bureau of the Budget is not an accepted basis for measuring effectiveness. The current uncertainty as to complete reliability of the Minuteman precludes the substitution thereof for the 4 Titan squadrons. Further, the military requirements, as they are determined from active studies now being made, may indicate a need for missiles of large capabilities which cannot be filled by the Minuteman.

3. Nike Zeus—Long Lead Production

Defense Proposal

Provide $82.8 million, the minimum first year funding, to provide capability for and to initiate actual production of long lead time items which must be contracted for in FY 1962 to permit accomplishment of the first Nike Zeus installations by about October 1965 if all developmental, production, and installation schedules are met. The intention is to provide flexibility, at a low cost, for a future decision whether or not to go [Page 62] ahead with production and installation of the Nike Zeus system. A comprehensive review by the Office of the Secretary of Defense clearly indicates that the minimum initial requirement is $82.8 million rather than the previous provisional estimate of $50.0 million for this purpose.

Budget Recommendation

Defer provision of first year production funding at least to the 1963 budget. There appears to be general agreement (except for certain Army and contractor representatives) that development has not yet progressed to the point where the technical feasibility of the Zeus system has been proven. A decision now to proceed with $82.8 million in 1962 entails follow-on funding of about $550 million in 1963 for large-scale production activities to preserve the possibility of meeting the October 1965 date.

A decision on the $550 million would have to be made in the 1963 budget decision period this fall with very little additional developmental data than is available right now—the key tests of the complete system do not begin until the summer of 1962. Thus, instead of providing flexibility, it appears that a decision to provide $82.8 million in 1962 virtually commits us to large-scale production, and it would certainly be regarded as doing so by the vocal advocates of Nike-Zeus.

Deferring first year production funding at least to the 1963 budget, as recommended, would defer the large-scale $550 million funding decision to the 1964 budget decision period in the fall of 1962, at which time the results of the first full system tests should be available.

In view of the widespread doubts whether the Nike-Zeus system should ever be deployed, because of practical operating problems, its own vulnerability, and its very large cost in relation to the protection received, deferral of the initial production decision appears warranted, even if it means a delay of at least a year in the target date of October 1965. Demonstration for psychological or prestige reasons of our technical capability of intercepting an ICBM would be accomplished by the present research and development program without going into actual production.

Defense Recommendation

The Department of Defense agrees with the position taken by the Bureau of the Budget that the Nike Zeus development program involves many uncertainties and, in common with other advanced weapon system developments, such as the big missiles, constitutes a high risk program with a chance of failure, but believes that it has the promise of substantial pay-off in terms of deterrence and prestige, if successful.

Provision in FY 1962 of $82.8 million does not entail a follow-on funding decision of about $550 million in the FY 1963 budget unless, for good reason, the capability to proceed with preparations for production is [Page 63] exercised early enough in FY 1962 to warrant such an amount of follow-on funding in FY 1963 to preserve the possibility of meeting the October 1965 date. Preservation of the capability to proceed with preparations for production can, of course, be misinterpreted, but it is the intention of the Department of Defense to so manage this capability as to make such misinterpretation unlikely. It does not necessarily follow that deferring the first year production decision to the FY 1963 budget would defer the $550 million follow-on decision to the FY 1964 budget since the time frame of the sequence of events in this program is not that rigid. Furthermore, it is expected that the Nike Zeus program will continue to involve uncertainties even after the test schedule is well underway, but this fact in itself is not a compelling argument against the early provision of the capability to proceed with preparations for production at the earliest time an assessment of the relative risks involved would favor a decision to advance.

4. Military Personnel, Increased Strength (all items)

Defense Proposal

Provide a net increase of $63 million for military personnel costs in 1962 to provide for 13,000 additional personnel for limited war and Polaris capabilities and a 2,000 net increase for the B-52 ground alert program after allowing for slight offsetting reductions resulting from the B-47 accelerated phase-down and the elimination of Snark missile units.

Budget Recommendation

Approve no change in total military personnel strength or funding in 1962, on the grounds that the proposed increases (to which there is no objection) can be accommodated by redistribution within the existing total. Specific areas in which offsetting reductions well in excess of the proposed increases appear possible have been brought to the attention of the Department of Defense.

Defense Recommendation

Defense must have the certain capability of providing the military strength needed for these identified purposes without the conditional necessity of making offsetting reductions elsewhere at this time. The military services advise they cannot absorb these requirements without a time consuming review of all requirements. Such a review has been ordered but cannot be relied upon to produce the required spaces in time to meet these requirements. These requested spaces and funds will be released by the Secretary of Defense only upon showings by the Services that they cannot otherwise provide for them within presently authorized strengths.

[Page 64]

5. Advent—Communications Satellite Project

Defense Proposal

The Department of Defense proposes to augment the FY 1961 funding for Advent by a transfer of $13.2 million from the Emergency Fund and to add $22.7 million to the $57.0 million presently in the FY 1962 budget, in order to maintain the research and development effort at a level to insure that highly reliable satellite equipments are available to meet present schedules.

Budget Recommendation

Make no specific recommendations to Congress at this time for additional funding in the controversial communications satellite field in the absence of a thorough review of both Defense and NASA projects in this field on which an administration position can be based. Use 1962 Emergency Fund for any increased funding requirements for Advent that may be required.

Defense Recommendation

The amount of $57.0 million presently in the FY 1962 budget is insufficient to maintain an adequate research and development schedule at a level of effort required to achieve a highly reliable satellite. The requirement is now known and thus would not be an appropriate need to be met from the FY 1962 Emergency Fund. The need for reliable full time military communications is considered to be compelling to the extent that any reassessment of national policy would recognize the need to continue Advent.

6. B-70

Defense Proposal

The Department of Defense proposes to proceed at a reduced rate of $250 million in FY 1962 with a development program which will include 6 prototype aircraft and prototypes of certain sub-systems to provide for the orderly demonstration of Mach 3 flight with an airframe potentially useful as a bomber. The intention is to reserve an option later to develop a weapon system which could provide a first operational wing about 1970.

Budget Recommendation

Consider cancellation of entire program at this time in view of doubtful need for an aircraft with the B-70 characteristics in addition to expected missile capabilities during the period the B-70 would become available and in view of the extremely high cost of the B-70 in relation to the limited second strike capabilities that would be provided by such a [Page 65] vulnerable ground based system. If a new strategic bomber beyond the B-52 and B-58 is needed, consideration should be given to a less costly concept better adapted to an airborne alert.

Defense Recommendation

Since evidence is not conclusive it is not timely to decide either (a) to proceed at this time with an all-out weapon system development program, or (b) that there is to be no further step taken in manned strategic bombers beyond the B-52 by terminating the B-70 program. Even though there will be primary dependence on ballistic missiles for the strategic mission in the future, there remains certain uncertainties with respect to missiles including the question of reliability. There are certain advantages inherent in a controlled force of manned bombers. Until full confidence can be achieved in the missile force and until there is conclusive evidence of the feasibility or lack of feasibility, based on technical, military, economic and timing factors, of a Mach 3 bomber, it is believed to be essential to explore this phase of flight to preserve the option to advance towards a weapon system at the earliest time an assessment of the relative risks involved should favor such decision.

[Here follows a series of financial recapitulations.]

  1. Source: Kennedy Library, National Security Files, Departments and Agencies Series, Department of Defense 3/61. Secret.
  2. Document 17.
  3. Secret.
  4. Deleted based on continuation of deficiency authority.
  5. Excludes proposed net increase in FY 1962 Military Personnel Funds.
  6. Secret.