29. Memorandum From C. Fred Bergsten of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Problems Facing Military Assistance Program for FY 1971

Issue

A number of extremely serious issues confront our military assistance program for FY 1971, not to mention the longer run:2

  • —Cambodia will probably require at least $50 million, and perhaps much more, which was of course not anticipated when the present $350 million level was authorized last January. (You will recall that MAP for Vietnam, Laos and Thailand is now in the DOD budget.)
  • —As much as $150 million more than now programmed may be desirable to implement the President’s Korea decisions to persuade Park to undertake the necessary force modernizations.
  • —The President’s Indonesia decision will require an extra $10 million, and the Indonesians want more.
  • —“Recoupments” (unused authority from previous years) now look about $15 million less than earlier estimated.
  • —Our transfers of excess U.S. military stocks, which have provided a vital supplement (not requiring appropriations) to MAP in the past, could be severely limited by Congressional action. The acquisition cost of the stocks transferred in FY 1970 was $500 million, and some estimates suggest that the amount could go up to $1 billion this year. A Senate amendment to the foreign military sales bill, however, would limit transfers to $70 million in FY 1971. The countries most hurt by the restrictions would be the GRC, Korea, Turkey and Greece.
  • —Failure to get a foreign military sales bill could further increase the pressure on MAP, since credit sales (the proposed level is $350 million)3 [Page 67]are an alternative to MAP in some countries. This would be especially true in the Eastern Mediterranean, since about two-thirds of the sales bill is for that area; Presidential commitments to Israel and Iran are involved.

Options

I have made no attempt to develop detailed options in this quick summary. The Under Secretaries Committee is supposedly doing so right now, and should have them available in a few weeks.4 However, the options in broad terms seem to be as follows (they could of course be adopted in combination):

  • —Request a supplemental MAP authorization, for all or part, (e.g., Korea only, Cambodia only) of the $200-$250 million shortfall now anticipated. The obvious problem is Congress.
  • —Cut our MAP programs in the other countries to make room for at least part of the new needs. Funding Cambodia and Indonesia alone would require further sharp cutbacks for Turkey, Greece and the GRC and smaller cuts for Latin America and the Philippines (see attached table). All of these cutbacks would of course cause problems, especially in the eastern Mediterranean when the Soviet presence is increasing dramatically. This option could not provide much if any additional MAP for Korea without severe cutbacks in some countries and/or complete elimination of MAP in many.
  • —Defer some of the “new” programs, particularly Korea.
  • —Make a major effort to avoid Congressional restrictions on excess stocks, and utilize them as much as possible to relieve the strains on MAP. This can apparently be done on a substantial basis, though by no means as a dollar for dollar substitute. It appears to be a particularly strong possibility in Korea and Cambodia.
  • —In addition to any of the other options, make a major effort to get authority for military credit sales at the proposed $350 million level. If Cooper-Church derails the present bill permanently, we might have to submit separate country bills; this could help with some countries (Israel, Iran) but would meet strong opposition for others (Greece, Turkey).

Procedures

Within a day or two, State will submit a proposal for about $40 million for new Cambodian MAP, with cutbacks in other programs to make room.5 There is apparently great urgency because the $8.9 million [Page 68]already authorized is running out. Budget will present, as an alternative, a much smaller amount to get us through a few months and enable us to put the total Cambodian requirement in the overall context outlined in this memorandum.

Within a few weeks, the Under Secretaries Committee will present recommendations on the entire FY 1971 program. It will include options on MAP levels for Korea and Cambodia, with options for providing these levels either via a supplemental or cutbacks for the other countries.

Attachment

PRESENT MAP LEVELS FOR FY 1971 AND POSSIBLE CHANGES TO PROVIDE $40 MILLION FOR CAMBODIA (AND $10 MILLION MORE FOR INDONESIA)*
(Millions of Dollars)

Approved Possible Changes
East Asia and Pacific $ 183.2 $ 215.0
Cambodia 40.0
China 20.0 6.4
Indonesia 5.0 15.0
Korea 140.8 140.0
Philippines 17.0 13.2
Near East and South Asia 124.0 89.4
Greece 20.0 10.4
Iran 2.4 2.4
Saudi Arabia .7 .7
Turkey 100.0 75.0
Europe 26.1 26.1
Spain 25.0 25.0
Africa 18.6 15.4
Ethiopia 12.0 10.0
Tunisia 3.3 3.3
Latin America 16.2 7.7
Non-Regional 23.9 23.9
Total Program 392.0 377.0
Less: Recoupments -31.0 -16.0
Reimbursement -6.0 -6.0
Reappropriation -5.0 -5.0
New Budgetary Authority 350.0 350.0
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 194, AID, Volume IV 9/11/70-10/6/70. Secret. Cleared by Lynn, Holdridge, Kennedy, Saunders, and Vaky. Attached to a July 7 note from Bergsten to Haig identifying it as a memorandum Haig had requested for Kissinger summarizing the problems faced by the Military Assistance Program. Bergsten noted that Kennedy thought Kissinger would want to read it before the July 8 WSAG meeting on Cambodia (postponed to July 17) since “Cambodia MAP will be discussed at that time and the memo flags the real problems involved with any new burden on the program.”
  2. In late 1969 Congress had authorized a $350 million program for both FY 1970 and 1971; see Document 20.
  3. The $350 million FMS legislation that was currently before Congress was separate from the $350 million MAP authorization at the end of the first session; see footnote 2 above.
  4. At the top of the memorandum, Kissinger wrote, “I want to be present at the Undersecretaries Meeting.”
  5. Not found.
  6. Items do not add to totals because small country programs are omitted.