89. Memorandum From the Director of the Bureau of the Budget (Schultze) to President Johnson 1


  • Management Responsibility of the Secretary of State

Based on General Taylor’s recommendations in March, you assigned to the Secretary of State “authority and responsibility, to the full extent permitted by law, for overall direction, coordination, and supervision of interdepartmental activities of the U.S. Government overseas.” (National Security Action Memorandum 341, attached)2 This was a major step in strengthening the Secretary as a focal point of assistance to the President

  • —in surveying and managing our growing overseas operations, now conducted by many Departments;
  • —in insuring that U.S. programs effectively meet our interests and objectives in overseas areas.

My review of overseas programs in the 1968 Budget Preview has convinced me of the importance of having a top official of the Department to assist the Secretary full time in (1) managing the Department, (2) coordinating the foreign affairs activities of the several agencies, and (3) providing leadership to the interagency committees and procedures established under NSAM 341.

Specifically, as a next step in strengthening our foreign affairs operations, I recommend that the number three man in the Department (the Tom Mann job), who is titled in statute either “Under Secretary for Political Affairs” or “Under Secretary for Economic Affairs”, be assigned to this management role. Acting for the Secretary, he would: [Page 189]

  • manage the resources of the Department of State, with Foreign Service officers and other employees totaling 25,000, and an annual budget of $400 million ($700 million with reimbursements from other agencies).
  • —be responsible for the effective translation of policy decisions into action.
  • direct, coordinate, and supervise interdepartmental activities overseas as specified in NSAM 341. These activities include programs of economic and military assistance, food aid, the Peace Corps, and USIA, cost about $5 billion annually, and involve about 37,000 employees in addition to State’s.
  • chair the Senior Interdepartmental Group established by NSAM 341.

To be effective in this task, he will need a strong program review and analysis staff and a foreign affairs programming system which would relate agency programs in countries and regions. He also should be a main point of advice to the Secretary on programs and budgets for foreign affairs activities.

The recommendation assumes that the Secretary will continue to use the Under Secretary as his “alter ego” in advising the President, conducting diplomatic relations, and dealing with Congress and the public. I do not believe the Under Secretary can perform this demanding role and also give the necessary sustained attention to the management job I am proposing.

The Mann vacancy provides an opportunity to restructure the assignment as recommended herein and to find the right man to fill it. No legislation would be needed.

I believe the recommended assignment backed by the right staff and procedures would contribute materially to

  • —clearer and earlier identification of objectives and requirements in countries;
  • more effective planning and execution of agency programs to meet total U.S. interest in a country, especially in insurgency and other crisis situations;
  • —better management of foreign affairs personnel, a critical resource, to improve quality and utilization among agencies;
  • more effective operations at least cost, by eliminating lower priority activities and consolidating administrative support;
  • reductions in the number of people abroad.

I believe that this proposal would be well received in the Congress and strongly supported in the executive branch. I recommend

  • —that you discuss it with Secretary Rusk and request him to plan for a restructuring of assignments;
  • —that the proposed assignment be the basis for selecting the Mann replacement.

Charles L. Schultze 3
  1. Source: Johnson Library, National Security File, NSAMs, NSAM 341. Confidential. Typed at the end of the memorandum is the following note: “Walt Rostow has seen, and agrees with this memo. CLS [Charles L. Schultze].”
  2. Document 56.
  3. Printed from a copy that indicates Schultze signed the original.