62. Memorandum From the Chairman of the Policy Planning Council (Rostow) and the Deputy Under Secretary of State for Administration (Crockett) to Secretary of State Rusk 1

SUBJECT

  • The Future of Planning and Programming

Pursuant to your 1962 instructions,2 we have undertaken in selected countries around the world a program of National Policy Papers that analyze United States interests and provide comprehensive statements of United States strategy, objectives, and courses of action. To date we have completed NPPs for thirteen countries. Another six are in preparation. When the latter are completed we will have authoritative detailed policy documents for the countries in which 42 per cent of all U.S. expenditures (except military) are made.

You have now been assigned additional responsibilities for the over-all direction, coordination, and supervision of interdepartmental activities of our Government overseas by the March 3, 1966 NSAM.

We propose the following steps as essential to rapid and effective implementation of the President’s directive in the fields of national and regional policy planning and programming:

a.
An acceleration in the NPP program through revision and streamlining of the methods and procedures used in their preparation and approval.
b.
The design and prompt provision of authoritative interim policy papers for those countries where a completed NPP cannot be expected [Page 142]within the next six to twelve months and where we intend (as in the case of the Latin American countries) to establish foreign affairs programming.
c.
The installation as rapidly as possible of a foreign affairs programming system in successive regions to complement the policy planning actions.

We have from the beginning recognized that we must examine the actual use of resources in each country and region before we can be confident that our efforts overseas are being sensitively related to established policies, objectives, and courses of action. For this reason we have been working for three years on a programming system that will display in a common language present and proposed uses of all U.S. resources in relation to official objectives and purposes.

Various versions of this system have been experimentally installed in thirty-two countries throughout the world, thirteen of which used the system as the basis for last year’s Executive Review of Overseas Programs. On the basis of this experience, we have prepared further simplifications and improvements which we now believe give us a workable system.

Two problems confront us.

The first is the negative reaction to these continued efforts expressed to a greater or lesser extent by working levels in all the foreign affairs agencies except the Department of Defense. The second is a similar but much stronger response from the working level of the Bureau of the Budget.

Several of the foreign affairs agencies, notably AID and FAS, view our planning and programming activities as a potential constraint on their discretionary authority and a threat to their institutional autonomy. They point out that these inferred invasions are inappropriate so long as they are being held individually accountable for their programs by the President and Congress. While we can understand and to an extent sympathize with these concerns, we believe the issue has been settled by the President’s directive which both establishes the responsibilities of the Secretary of State and provides a forum for resolving interagency issues.

Although we established agreement earlier with Mr. Schultze, the working level of the Bureau of the Budget has continued to oppose the Department of State’s developing a capability to examine foreign affairs programming on a country and regional level involving the resources of all U.S. agencies. They believe the Planning, Programming, and Budgeting Systems (PPBSs) being installed by all agencies under Bureau of the Budget Circular 66–3,3 are sufficient for the President’s [Page 143]and the Department’s purposes, and that the Department of State should cease its efforts to develop a comprehensive country and regionally-based system.

It is perfectly clear to us that the programming system we envisage is a necessary complement to the various agency PPBSs. The analysis by the Bureau of the Budget of agency budgets and programs in terms of their specific functions cannot be intimately related to country and regional policies and cannot, therefore, meet our needs and responsibilities. A foreign affairs program must be built from the ground up, from individual country and regional policy objectives, and with full knowledge in each country of the role of each agency in fulfilling national objectives under the guidance of the Ambassador.

The working levels of other foreign affairs agencies are attracted to the more traditional Bureau of the Budget approach because it avoids the assessment of their programs in the light of all pertinent national objectives. They may also see in this approach a way of diluting the Ambassador’s responsibilities for the orchestration of all country programs.

Ironically, the Budget Bureau’s views represent a movement away from the tested and successful Pentagon approach that has placed the national defense above service interests and systematically arrayed service programs against specific national defense objectives. It is the essence of modern programming that the use of resources be related to objectives and purposes; not to agency functions.

In working level debates with the Budget Bureau, three major arguments are advanced against the Department’s planning and programming system:

a.
The NPPs are not sufficiently precise to provide a base for budget programming. The NPPs go further than any previous national policy papers in relating to policies and objectives to specific courses of action. They do not-and they should not-pretend to specify in full detail, aid, information, counter-insurgency, and other operational programs. They do, however, provide a single authoritative instrument for relating the use of resources in a country (or a region) to high priority tasks and thus help assure “a proper selectivity of the areas and issues to which the United States Government applies its resources.” Put another way, the National Policy Papers were never designed to do the work of the various agencies for them, nor to do the work of the Bureau of the Budget in critically reviewing agency operations. But they do fill a gap which cannot be fulfilled by any other means known to us-a gap made vivid for us all in 1962 when we confronted a proliferation of uncoordinated national policy papers arising from the several agencies.
b.
The Department of State programming system does not meaningfully array resource data, nor do foreign affairs programs compete for resource allocations. [Page 144]In part this is a reflection of the functional vs. purpose argument cited above. As we indicated there, the BOB’s current approach to programming is to develop PPB systems for each major department and agency. In the foreign affairs area, this approach will result in vertical reflections of agency programs that are closely tied to the financial structure and the organizational and functional delineations of each agency. Our approach, on the other hand, has been to design a horizontal array of inter-agency programs closely tied to policy objectives and national purpose. We believe both views-the vertical and the horizontal-are desirable and will provide valuable insights into trade-off possibilities, alternative solutions to problems, and program gaps, overlaps and duplications.

The second half of the BOB contention, namely that foreign affairs resources are not competitive, in our opinion is simply not true. The authorized programs of the various agencies engaged in foreign affairs do offer alternatives and options when viewed from the standpoint of national objectives. An unfavorable U.S. balance of payments situation with a given country may be improved more by the visit of a trade mission or a trade fair than by the work of a U.S. Travel Service office. Successful negotiations to remove travel and currency restrictions may have more impact than either. Rural development in a given country may be more effectively and economically performed by Peace Corps volunteers than by AID technicians. Educational development may be more effectively accomplished by supporting local institutions than by financing study in the U.S. All three of these examples involve program decisions that cut across existing agency lines.

The problem is not lack of competition but rather the absence of techniques and mechanisms for identifying and resolving competition. Cost benefit analysis in defense relates resources to our ability to kill people. Foreign affairs does not provide any simple mathematical equivalent. A simple quantitative approach to student exchanges or, even, to agricultural credit, or other AID operations would be illusory. To say the problem of adjusting resource use to foreign affairs objectives is difficult-and requires wisdom and intimate knowledge of each country-does not mean that we are justified in abandoning our effort to feel our way towards a matching of resource use to country and regional objectives. An effort to manage foreign affairs resources by agency budgeting in Washington, without examining carefully their use in each country, abandons the problem; it does not solve it.

c. The absence of provable budgetary changes flowing from the experimental review of agency programs in last year’s thirteen country exercise (EROP). This assertion is only partially true. A number of program changes are being made by the various agencies themselves as a result [Page 145]of Ambassadorial recommendations. It is true that the Budget Bureau (largely because of time factors) did not include EROP recommendations in their consideration of agency budgets. For example, the budget for the U.S. Travel Service was increased by some $1,700,000 despite firm recommendations for reductions totaling $350,100 from Ambassadors in four of the eleven countries in which the Travel Service operates.

It is fair to say that the missing element in EROP was an institutional mechanism that could effectively implement the decisions which resulted from the analysis of data collected across agency lines. The President’s action creating the SIG and IRGs in each region solves that dilemma.

In spite of these differences, we believe we must maintain the closest possible cooperation with the Bureau of the Budget to insure that we achieve a maximum of reciprocal benefits and a convergence between the two systems. In fact, our system can provide each agency PPBS with such data as they may desire due to the built-in flexibility of the computer program.

To summarize: we have invested a considerable effort in the development of integrated planning and programming systems covering the entire foreign affairs spectrum, based, as a Department of State system must be, on country and regional objectives. These systems are now ready for full application. The prospect of such action is being opposed in some quarters on essentially bureaucratic grounds.

Our response is that we have learned much in the past three years. We know we don’t have all the answers to an evolving and complex problem for which there is no precise precedent. We are convinced that the resolute carrying forward of the effort begun three years ago is a vital link in fulfilling your responsibilities under NSAM 341. We are equally convinced that an abandonment of these efforts now will go far toward gutting the essential purposes of that document.

We therefore recommend that you:

1.
Officially endorse these efforts in appropriate notifications to the executive departments and agencies and our Ambassadors;4 and,
2.
Authorize us to proceed with our plans for the immediate installation of the foreign affairs planning and programming system in the Latin America region.

[Page 146]

We respectfully urge prompt consideration of these recommendations. We believe the lead time permitting a review of the FY–1968 budget cycle from the Latin America region requires your decision by March 11, 1966.

  1. Source: Kennedy Library, Crockett Papers, MS 75–45, Foreign Affairs Planning System 1966. No classification marking. The memorandum is unsigned. Another copy of the memorandum indicates it was drafted by Rostow, Crockett, Barrett, and Robert T. Bonham on March 7 and forwarded to Ball by Springsteen, together with two draft documents implementing the proposal, for Ball’s 3:30 p.m. meeting on March 7 with Crockett and Rostow. (National Archives and Records Administration, RG 59, S/S-Ball Files: Lot 74 D 272, SIG Miscellaneous) A handwritten note on Crockett’s letterhead attached to the copy of the memorandum in the Crockett Papers states: “These memos were prepared for discussion with the Secretary by WJC [Crockett], Rostow, Ball, [U. Alexis] Johnson, & Barrett. However, meeting did not take place. Rostow saw Sec privately Mar 8 and gave him copy of memo. Also subsequently sent Nodis telegram [to Crockett] from Panama [where Rostow was attending a conference]. However, Mar 9 meeting with BOB changed picture and agreement reached to work on experimental basis this yr. BOB was to send paper detailing understanding.” In Programming Systems and Foreign Affairs Leadership, pp. 128–143, Mosher and Harr discuss the background and substance of the memorandum, describe the March 9 meeting with BOB, and print BOB’s summary of what, from its perspective, was concluded at the meeting. The memorandum itself is printed on pp. 252 257.
  2. Not further identified.
  3. See Document 45.
  4. Attached to the copy of the memorandum in the National Archives are (1) a draft letter from Rusk to heads of executive departments and agencies with significant operations overseas and (2) a draft circular telegram from Rusk to all diplomatic posts. The draft letter notified recipients that the Department was expanding its National Policy Paper program and moving forward with its Foreign Affairs Programming System, starting in Latin America. The draft circular conveyed a briefer but similar message.