38. Letter From the Administrator of the Agency for International Development (Bell) to the Assistant Secretary of Defense for International Security Affairs (McNaughton)1
Dear John:
Your letter of July 30 regarding MAP requirements for FY 1966 points to one of several serious questions that face us during the present fiscal year with respect to foreign assistance requirements.2
Your letter indicates that you expect the increased Vietnam-Laos MAP costs in FY 1966, over and above the amount provided in the MAP budget, will exceed the $300 million authority to draw upon Defense Department stocks established in Section 510 of the Foreign Assistance Act. In these circumstances, you raise the question whether there is a possibility [Page 104] of transferring some funds from economic aid appropriations to military aid.
I am afraid I cannot be encouraging. If Congress acts favorably at the appropriations stage, we hope to have about $464 million available for Supporting Assistance, which is not enough to meet requirements already in sight, including $330 million for Southeast Asia; $65 million for Korea, $32 million for Jordan, and smaller but important amounts for several countries in Africa and Latin America. Moreover, it now appears that the Contingency Fund budget request of $50 million will not be sufficient even to meet requirements for the Dominican Republic and for Vietnam and Laos—let alone unexpected needs elsewhere.
Thus the appropriations from which transfers to MAP would ordinarily be made appear to be more than fully committed. In the last two years, it has been possible, late in the year, to transfer some funds from the Technical Cooperation appropriation (on the order of $15 million), but it is too soon to predict whether or not this can be done in the present fiscal year, and in any event the amount would not be large in relation to the likely requirements. Funds cannot be transferred, as you know, from the Development Loan and Alliance for Progress appropriations.
I conclude, therefore, that transferring funds from economic aid to military aid promises to alleviate the basic problem only to a small extent, if at all.
Moreover, in view of the requirements facing the Supporting Assistance and Contingency Fund appropriations, I believe it is preferable to let stand the agreement between you and Bill Gaud that the Defense Department and/or MAP will cover the Korean costs in Vietnam to which you refer.
Looking ahead, beyond the requirements which are already upon us, at the likelihood—virtually the certainty—that additional requirements will face us during the present fiscal year in Vietnam and elsewhere in Southeast Asia, it seems to me the only sensible way to conduct our foreign assistance financing is to anticipate the need for a supplemental appropriation, probably for economic as well as military assistance. We cannot estimate accurately the size of such a supplemental at present, but we should be able to do so by the end of the calendar year, in time to permit a request to be presented to the Congress at the beginning of the next session.
If you concur, I suggest that we prepare a proposal, for approval by Secretaries Rusk and McNamara and by the President, for proceeding to program MAP funds for Vietnam and Laos as the needs of the military situation require, and to program MAP funds for other countries at the minimum levels the U.S. interest will permit (including taking full [Page 105] account of the recent studies by Mr. Hoopes of DOD/ISA),3 recognizing that this will in all probability result in a request for supplemental appropriations in January.
Sincerely yours,
- Source: Washington, National Records Center, RG 286, AID Administrator Files: FRC 69 G 1866, DEF 19 Military Assistance, FY 1966. Confidential. A copy was sent to Schultze.↩
- Document 36.↩
- Townsend W. Hoopes, Deputy Assistant Secretary of Defense for International Secutiry Affairs. The studies have not been further identified.↩