32. Memorandum From Secretary of Defense Laird to the President’s Assistant for National Security Affairs (Kissinger)1

Introduction

We are involved in a real crisis in our key programs for grant military assistance (MAP), Foreign Military Sales (FMS) and Supporting Assistance (SA).

In the first place, the resources currently available and being requested from Congress are inadequate to support ongoing implementation of the Nixon Doctrine and to assist in maintaining adequate balances of power throughout the world. Requirements continue to mount which have led—and continue to lead—to overcommitment of limited available funds in the basic security assistance programs. The only possible result, without supplemental help, is that Defense is unable to achieve specified national security goals.

In the second place, the time to make the request for additional resources is now. The necessary action has not been forthcoming. I am convinced the only viable solution to the current MAP/FMS crisis is to ask for more resources.

I know the Executive Branch has preferred not to seek supplementary FY 1971 funds from Congress until much later in the year. The on-rush of events in the Middle East, Southeast Asia, and Korea will not, however, afford us the luxury of waiting. The failure to move now for a supplemental is contributing to the current MAP/FMS crisis. The irony is that the present circumstances are favorable for receiving favorable Congressional consideration of a supplemental request. The corollary is that future circumstances almost certainly will not be as favorable. In the following paragraphs, I would like to outline in more detail our current situation.

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Military Assistance

We have urgent additional MAP requirements for at least $260 million. A summary breakout of the MAP supplemental needs is as follows:

Republic of Korea $150 million
Cambodia 60
Turkey 25
Republic of China 15
Greece 10
Total Grant Aid MAP Supplemental $260 million

The $150 million for the Republic of Korea is needed to initiate a balanced force modernization. This modernization is essential to compensate, in part, for ongoing U.S. troop withdrawals. The Cambodian situation presents a no-less-urgent requirement. Currently, $48.9 million is available to cover the outlays for both FY 1970 and FY 1971 ($8.9 million in FY 70 and $40.0 million in FY 71). All except $13 million of the $48.9 million has already been obligated. In the meantime, estimates of FY 1971 Cambodian requirements are $100.0 million, i.e., $60 million more than is currently at hand. Without a supplemental, our alternatives are (1) to restructure further an overall MAP pool of funds which is insufficient to achieve U.S. goals, or (2) to design a military strategy in Cambodia within the confines of the existing funds, a course which may likewise lead to failure to achieve stated U.S. objectives. Obviously, both of the currently available alternatives are undesirable. In addition to the additional ROK and Cambodian needs, there is an urgent requirement for $50 million to restore Turkey, the Republic of China, and Greece to the pre-existing FY 1971 MAP levels.

Foreign Military Sales

Drastic reductions in grant aid make the need for credit sales more important than ever. Authorizing legislation for FY 1970 and FY 1971 Credit Sales, however, remains in joint Senate-House Conference, and we cannot offer even this sort of help to foreign countries.

With respect to credit, we have a particularly serious situation in Israel. That nation’s military orders placed with us are mounting rapidly and, in the absence of FMS credit, we are compelled to request payment from Israel on a cash basis. Payment requirements for approved sales total $297.7 million for the current fiscal year—a level beyond [Page 75]Israel’s ability to pay without great hardship. Additional firm orders now under review, most of which we cannot refuse, will increase the FY 1971 payment requirements to about $390 million. Adding $40 million in repayments due on past FMS credit transactions brings total FY 1971 payments due to the U.S. up to $430 million, a level clearly requiring extraordinary measures.

Unless we can provide additional credit, Israel faces a grave financial situation and might be forced to default on payments due this year, the first such default in the history of Foreign Military Sales. If this should occur, the Military Departments may not be reimbursed for many millions of dollars in costs already incurred, ongoing contracts may be canceled at considerable cost, and Israel might not receive equipment it expects and urgently needs. A chaotic situation would prevail until the problem is resolved.

Supporting Assistance

During this period of continuing U.S. troop redeployments from Southeast Asia and concurrent Vietnamization, we must do what we can to assure that the South Vietnamese Government survives. The economy of South Vietnam is strained by the demands of Vietnamization, and as anticipated in defending the Foreign Aid Bill before Congress, additional supporting assistance, estimated at about $100.0 million, will be needed. Similarly, there is a pressing requirement for about $130.0 million in Supporting Assistance for Cambodia. Funds are immediately needed to assist the Cambodian Government to pay and support its growing forces and limit the impact of this action upon its fragile and underdeveloped economy. Supporting Assistance is required for both these programs now. Failure to supply such assistance could seriously jeopardize Vietnamization and/or contribute to Cambodia’s fall. Our already significant investment, both in terms of military equipment and prestige, could be lost.

Timing of Supplemental Request

Now is the time to make the supplemental request. There is general approval for our initiation of U.S. troop redeployments from the Republic of Korea. Likewise, the situation in Cambodia is more stable than we may expect after the North Vietnamese have had time to infiltrate new men and supplies. The time to make the request for a MAP supplemental is when patterns and trends are going reasonably well from our standpoint. Congress will act, in my judgment, to keep the situation going well. To delay asking for the MAP Supplemental is to risk making the request at a much less propitious time. In my judgment, if we do not request a MAP Supplemental within 30 days, there will be no chance of obtaining the added—and critical—MAP funds.

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Likewise, the time to move on the FMS situation is now. The Middle East situation is such that favorable consideration could be expected on the Israeli-equipment funding. More pragmatically, if the Defense Department does not obtain relief on the funding, the military departments will literally have to take major funding increments out of their hide—and that at a time when our available resources for our own needs are only marginally sufficient to meet our major strategy objectives.

Furthermore, we may now expect Congress to work towards a mid-October adjournment. If we do not press now for MAP/FMS action, we shall lose the opportunity for relief until February 1971 at the earliest. That presents a clearly intolerable situation.

Summary

I consider our programs for Military Assistance and Credit Sales to be of highest priority and essential to U.S. foreign policy objectives. We have done our best to design our assistance programs in a fashion that will minimize the need for stationing U.S. forces overseas and, at the same time, give us reasonable assurance that our interests abroad are protected. We cannot succeed unless we are provided with the resources requisite to the job.

We should take immediate and forceful action to obtain:

  • —The FY 1971 appropriations requested for military assistance.
  • —The FY 1970 and FY 1971 Foreign Military Credit Sales appropriations.
  • —The requisite supplemental funds for each of our assistance programs, viz,
  • MAP supplemental of $260 million.
  • —An amendment to the DoD Procurement Appropriations request to fund credit military sales to Israel amounting to $390 million.
  • —Supporting Assistance supplement of $230 million.

These steps are essential if the United States is to carry out programs which are essential—and on which actions have already been taken—in the Far East, in Southeast Asia, and in the Middle East. I strongly urge immediate action.

Melvin R. Laird
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 194, AID, Volume IV 9/11/70-10/6/70. Secret. Attached to a September 19 memorandum from K. Wayne Smith to Kissinger indicating he had discussed Laird’s letter with Johnson, Packard, Moorer, and Helms at an SRG meeting on September 15. Smith’s analysis of Laird’s recommendations concluded that they could be rejected on their merits, and he suggested that if it was decided to seek a supplemental “now,” it should be because the timing was propitious and not because essential objectives could not be accomplished without the supplemental. Smith also called Kissinger’s attention to a September 16 memorandum from Under Secretary Johnson who voted that since most of the appropriations would be to the State Department and/or AID, Secretary Rogers should be consulted before any decisions were made, if the President accepted Laird’s point of view.