160. Memorandum From the Administrator of the Agency for International Development (Bell) to President Kennedy0
SUBJECT
- Clay Committee Report and FY 1964 Foreign Aid Request
The Clay Committee met yesterday and agreed on their first report, subject to a few textual changes.1 Tentative plans are for the report to be transmitted to the President on March 21, with its public release shortly thereafter, for the President’s foreign aid message to follow about a week later (say March 28th), and for testimony to begin the following week (say April 2nd).
The present report of the Committee is a substantially improved document from last week’s version. It contains most of the same critical and restrictive comments, but they are far better balanced by positive support for properly conceived and administration foreign aid programs.
With respect to appropriations, the report is not very clear. It says essentially that under the Committee’s recommendations, they believe [Page 351] that “ongoing programs” could be carried on for $500 million less than is now the case. Recognizing present commitments, the Committee does not consider that this much could be cut at once from present fund levels. Furthermore, they recognize that sound programs now under consideration and future program needs will add to the cost of the program.
However, the statement is ambiguous enough to give rise to the danger that, either from an oversimplification in press reports or from further comments by Committee members, the $500 million figure in the report will be related to this year’s appropriation of $3.9 billion. In that event, the figure of $3.4 billion may assume an unwarranted currency, with the danger of this indicating what next year’s appropriation should be.
The Committee report in fact expresses no specific views on the FY 1964 appropriation request. The Committee has in effect authorized General Clay to testify on its behalf, applying its general views to the specific conditions of the coming year. General Clay has not thus far given any firm indication of his views on the FY 1964 appropriation level. It is my impression that he may consider that an appropriation in the neighborhood of $4 billion might be a proper level—compared to $4.9 billion dollars in the Budget.
The problem before us now is what specific figure the President should recommend to the Congress in his foreign aid message. There is general agreement that the recommendation should be reduced from the budget figure to reflect some expected carryover of unused lending authority. Together with some recent program changes, this would indicate a figure of $4,756 million (compared with $4,945 million in the Budget).
The question in my opinion is not whether, but when, to propose a further reduction in response to the Clay Committee’s views. There are two principal alternatives.
- 1.
-
To recommend a lower figure in the President’s message, in direct response to the Clay report, and justified as putting into effect the recommendations in the report so far as the President considers it feasible and desirable to do so at present. I recommend that this be done, and that the President propose a figure of $4,514 million—$75 million off MAP and $167 million off economic aid, compared to the present (reduced) budget figure. (Attached is a table showing the comparison in more detail.)2
The advantage of this course is to give a direct and forthright response to the Clay report.
The disadvantage is that it might result in a lower final appropriation.
[Page 352]If this course is adopted, I recommend that you telephone General Clay before your message goes to Congress, in order to make clear your expectation that he will support a strong foreign aid program—and an appropriation as close to your figure as possible.
- 2.
- To transmit in the President’s message the present (reduced) budget figure ($4,756 million), but to say in the message that the President has not had an opportunity to weigh the Clay report fully, and will communicate with Congress on the subject later. Then, when the Administration witnesses begin to testify, the President could send up his modified figure.
The advantage of this course would be to permit more time to consider the significance of the Clay recommendations. Furthermore it would start the Congressional legislative process with a higher figure, and let the President’s reduction in response to the Clay Committee appear to be part of the Congressional process. Since the process would start with a higher figure, Congress could take credit for a larger reduction.
The disadvantages of this course would be that it might appear rather artificial and hesitant, and that the President’s reduction in response to the Clay report, when it came, might seem rather small ($240 million).
The Secretary of State, the Secretary of Defense, and the Director of the Bureau of the Budget join in recommending the first alternative.
We need to decide between these two courses quickly since our “presentation books” must go to print within the next few days in order to be ready for the beginning of testimony the first week in April.
- Source: Kennedy Library, National Security Files, Meetings and Memoranda Series, NSAM No. 159. Secret.↩
- Reference presumably is to a draft of March 15. (Washington National Records Center, RG 286, AID Administrator Files: FRC 67 A 1530, Clay Committee, FY 1963, Folder #1)↩
- Not printed.↩
- Printed from a copy that indicates Bell signed the original.↩