26. Notes of Meeting of the National Security Council1

[Omitted here is discussion of the Pueblo and Cyprus crises. The discussion relating to the Pueblo is printed in Foreign Relations, 1964–1968, volume XXIX, Part 1, Document 218.]

The President: I spent some of this morning with Senator Ted Kennedy discussing his trip to Vietnam and the report he plans to submit.2 There are two points he made:

He is distressed about the degree of corruption in the South Vietnamese government. He thinks this may be ascending rather than descending.
He said there is substantial division among our generals about tactics and strategy we are following. He said many of them think we are investing more than we are getting in return.

I would suggest Secretary McNamara call the Senator and tell him I am very concerned about his report and that we are taking steps to head this off.

Secretary McNamara: We looked into the harassment and interdiction fire tactics. General Wheeler asked General Westmoreland to make very clear the rules of engagement and make sure they are well understood.

The President: General Wheeler, are you as confident today as you were yesterday that we can handle the situation at Khesanh?

General Wheeler: I do not think the enemy is capable of doing what they have set out to do. General Westmoreland has strengthened his position. He has contingency plans and can meet any contingency. There is nothing he has asked for that he has not been given. Khesanh is important to us militarily and psychologically. It is the anchor of our defensive situation along the DMZ.

The President: General Wheeler, are you sure that you have everything that is needed to take care of the situation in Khesanh?

General Wheeler: Yes, we are. General Westmoreland has been given everything he has requested.

The President: Have you done all we can back here?

General Wheeler: Yes Sir.

The President: We have been getting unusually good press from South Vietnam recently and I think that Secretary McNamara and General Wheeler should pass that along to the people who are handling our press relations out there.

Secretary McNamara: We have a good new military press man and I will be happy to pass along the President’s views.

The President: I will now ask Secretary Fowler to give us a summary of his situation concerning the budget and the possible deficit.

Secretary Fowler: It is no longer a question of debate on whether or not a tax increase is a good thing. I think our case has been presented quite clearly. We may get $6 billion, 2.9 from excise taxes and 3.0 from corporate taxes. So it becomes a question of getting 6 this way or 12 if we get the surtax.

Looking back over the last six months, the economy has risen $32 billion in this half versus $13 billion increase in the first half. We have a 4% price increase. Last year we said the balance of payments problem was becoming serious. It did. The committee said they wanted budget expenditures reduced by $5 billion. We reduced them by $4–1/2 billion.

[Page 67]

The committee asked us not to request a rate of increase to exceed that of last year. We did that. We restricted new programs. We cut back on old programs.

I reminded the committee that time is running out if we are to do anything meaningful about this deficit.

  1. Source: Johnson Library, Tom Johnson’s Notes of Meetings. Top Secret. The meeting was held in the Cabinet Room of the White House. In addition to those who spoke, those present at the meeting included Humphrey, Rusk, Battle, Sisco, Nitze, Helms, Marks, Vance, Katzenbach, Rostow, Christian, Saunders, Davis, Smith, and Tom Johnson. (Ibid., President’s Daily Diary)
  2. See footnote 2, Document 23.