20. Memorandum From the Director of the Bureau of the Budget (Mayo) to President Nixon1
- FY 1971 Military Assistance Budget
Since we discussed the MAP FY 1971 budget, the Congress has enacted a two-year authorization for military assistance as well as economic assistance.2 The authorization for grant military assistance contained in the enrolled Foreign Aid Bill is $350 million for both FY 1970 and FY 1971. You have approved $400 million in grant military assistance for FY 1971, $50 million above the congressional authorization, but $50 million [Page 49] below the budget level originally recommended by State and Defense.
Your decision on economic aid for FY 1971 was based on accepting, where possible, the second year FY 1971 authorization level. John Hannah and I have now agreed upon an economic aid total of $1,844 million in budget authority which conforms to the authorization level, except for $100 million in additional supporting assistance in Vietnam which is essential to the Vietnamization policy. The rationale for accepting a lower total for economic aid (State/AID and the Budget Bureau had proposed $2.0 billion to you) was to reduce the legislative load on the Foreign Affairs/Relations Committees next year. This would provide time to focus on the report of the Peterson Task Force and your new aid proposals.
The Administration should also consider extending this approach to military assistance—reducing the MAP FY 1971 request to $350 million—on the following basis:
- —Congress, when it completes work on FY 1970 aid appropriations in January, will probably provide only $350 million, the amount authorized for MAP. The Senate opposition to the $54 million earmarked for Taiwan will probably prevail.
- —Prospects for persuading Congress to increase the FY 1971 MAP authorization by $50 million are poor. The controversy over jets for Taiwan has produced strong feelings in both the House and the Senate, as exemplified by Senator Aiken’s remarks that the foreign aid program has become “a diplomatic pork barrel and a subsidy to American industry.”
- —A $350 million MAP level for FY 1971 would be very tight, requiring reductions in all the major country programs but credit sales and expected increases in excess stocks would at least partially offset these reductions.
Defense and State recommend that the FY 1971 MAP budget request not be reduced below $400 million.3 They would prefer to try to obtain the increase in authorization on the grounds that $350 million would not meet the critical defense needs of the major recipient countries like Korea, Turkey, and Spain, and fund the remaining programs at levels adequate to serve U.S. foreign policy. John Hannah is concerned about the effect a MAP authorization increase would have on congressional consideration of new foreign aid proposals next year.
For reasons of congressional tactics, you may want to consider the option of a 1971 MAP budget of $350 million and seek the views of Bryce Harlow and Henry Kissinger on the question.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 206, Bureau of the Budget, Volume I. Confidential. Attached to a January 5, 1970, memorandum from John Campbell to Tod Hullin indicating that the President had seen the memorandum during a discussion with Mayo. President Nixon met with Mayo and Ehrlichman at the White House on December 30, and with Mayo, Ehrlichman, and Kissinger in San Clemente on January 3, 1970. Mayo’s memorandum presumably was reviewed by the President at one of these meetings. (Ibid., White House Central Files, President’s Daily Diary) The Washington Post reported on January 4 that, in a brief meeting with the press immediately following the January 3 meeting, the President said all the major decisions for the forthcoming budget had been made.↩
- In his signing statement on December 31, the President noted with satisfaction that the legislation authorized the Overseas Private Investment Corporation. He also recognized a widespread feeling that a far-reaching renovation of the foreign assistance program was required and that the 2-year authorization provided in the Foreign Assistance Act of 1969 would give ample time to make such recommendations based on the forthcoming report of the Task Force on International Development. For text of his statement, see Public Papers of the Presidents of the United States: Richard Nixon, 1969, pp. 1047-1048.↩
- See Document 19.↩