39. Memorandum From Secretary of State Rogers and Secretary of Defense Laird to President Nixon 1

SUBJECT

  • FY 1971 Requirements for Supplemental Funds

Recommendation:

That you request supplemental funds in the amount of $380 million for Military Assistance and $185 million for Supporting Assistance.

That in order to have any hope of obtaining these supplemental funds in this session of Congress, you personally present the request to the Congressional leadership.2

Discussion:

On the question of going forward in this session of Congress to seek economic and military assistance, there are two issues involved on which we need your decision: one of magnitude, and the other of timing. This Memorandum only addresses the first issue; the second we would like to discuss directly with you.

Magnitude

Requirements for supplementary funds are as follows:

I. Cambodia—Military Assistance $125 million

This is a tentative figure, developed in NSSM-99,3 which is under study by the Senior Review Group. It would be in addition to the $40 [Page 90]million already provided and it does not include funding of ARVN and other third country operations under consideration in NSSM-99.4

Supporting Assistance $120 million

Based on NSSM-99 strategies and our best present estimates pending review of the IMF study which may shed further light in the coming weeks. [sic] This level presumes temporarily untying AID funds on an emergency basis (for Cambodia only) for world-wide procurement and includes $40 million in forward funding of FY 1972 requirements in order to avoid a break in the pipeline. If a Cambodian initiative to organize an international Consultative Group of donor countries is successful, requirements for U.S. assistance may be reduced.

II. Military Assistance Program (General)—$70 million

This amount is needed to compensate for the diversions made from the originally planned world-wide MAP to meet the Cambodian emergency ($40 million); to increase the Indonesian program ($13 million) and to make up for a shortfall on past years recoupments ($17 million). These diversions have caused serious problems for certain allies, (e.g., Greece, Turkey, Taiwan), created severe difficulties in finding even $.8 million to assist Uruguay and Guatemala and raised anxious questions regarding the direction of American policy.

III. Korea—$150 million

Inclusion of funds for Korea in a supplemental to Congress would publicly reassure the Koreans of our intentions concerning modernization, and would have a highly beneficial impact on our joint planning for U.S. troop reductions. In addition, we shall be providing Korea with considerable assistance in 1971: $140 million in regular MAP, plus $117 million of equipment of U.S. troops to be withdrawn, plus perhaps $30 million in long-supply stocks.

IV. Jordan—Military Assistance $30 million

In July 1970 we signed a sales agreement with Jordan on an arms package of some $53 million. It was assumed that Jordan could obtain the necessary funds from subsidies from Kuwait, Libya and Saudi Arabia, and $30 million from credits we had planned to provide it in FY 1970 and 1971. As the Foreign Military Sales bill remains stranded in the House-Senate Conference, we have no funds for credits and, following the events of this month, Kuwait and Libya have discontinued payments. At the same time, Embassy Amman is sending long lists of requirements. We are flying to Jordan some of the ammunition that is now urgently needed and plan to [Page 91]ask the Embassy to establish priorities on the undelivered balance of the arms package.

What is being provided now is necessarily on a sales basis. We expect that Jordan will require substantial additional amounts of equipment for which it will be unable to pay. We have found no way of providing credits. Therefore, to give substance to the assurances of support you have given King Hussein, we recommend requesting $30 million in grant military assistance for which we are preparing an illustrative program.

V. Lebanon—Military Assistance $5 million

Available facts do not permit the formulation of a specific list of requirements for the Lebanese armed forces. However, the maintenance of a stable, moderate regime in Lebanon is in the interest of the United States. The major threat to this stability and to Lebanon’s continued economic development stem from fedayeen activities within Lebanon, fedayeen incursions into Israel (with resultant retaliations from Israel) and the presence of Syrian forces on the Lebanese border with the capability to intervene at any time to assist the fedayeens, as with the case in recent fighting in Jordan. To bolster Lebanon, we believe that we should request funds amounting to $5 million for grant assistance to Lebanon. Not only is credit not available, but we also believe that grant aid would have both a greater political impact in Lebanon and better serve notice to the Syrians and other parties that the U.S. intends to give strong support to the maintenance of the Lebanese government.

VI. Israel—Credit $500 million

A Memorandum has been sent to you recommending $500 million of credits be offered Israel under the Jackson Amendment to the Defense Procurement Act.5 The first $350 million is to be on concessional terms (5 year grace period, 20 year repayment period and 3% rate of interest) and the balance of $150 million on regular FMS terms (10 year repayment at the cost of money to the U.S. Government).

VII. Vietnam—Supporting Assistance $65 million

An additional $65 million of Supporting Assistance funds are needed for Vietnam, for the following purposes:

$50 million for additional funds for the Commodity Import Program (CIP), which provides for the tied procurement of commercial imports. While NSDM-80 provided for a minimum level of economic support for FY 1971, this additional amount will establish a more adequate pipeline for FY 1972 funding when DOD expenditures will be declining rapidly.

$15 million for additional support to the Land Reform Program. Present funds for land reform provide U.S. payments to be made at the [Page 92]time that the GVN makes payments to land owners for the purchase of their property. The additional request would provide payments to the GVN at the time titles are issued to the new land owners, as an extra incentive to the GVN to make rapid distribution of titles. This request would be responsive to widespread Congressional support for land reform, including Congressional suggestions that U.S. financial support be increased and consistent with your earlier indication to Congress that a Vietnam Supplement might be required.

  • William P. Rogers
  • Melvin R. Laird
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 195, AID 10/7/70-12/31/70. Secret. Attached to an October 16 memorandum from K. Wayne Smith to Kissinger suggesting the Cambodia recommendations were high but otherwise supporting the requests.
  2. There is no indication if the President approved or disapproved the recommendations. In his October 16 memorandum, Smith noted that he thought it clear from the President’s October 8 decision (see footnote 4, Document 37), that the President wanted the message to go forward after the election. Smith attached draft memoranda to the President and agencies setting in motion actions to develop a message to Congress. All this was attached to a handwritten October 17 note from Haig to Kissinger that read: “HAK—I am generally in agreement with this pkg. You may wish to call Laird personally on his latest memo, Tab F. Meeting on this should be before Oct 26 in my view.” On Haig’s note Kissinger wrote: “Memos to Agencies should say SRG will review. Have signed all memos except to P. Send all others.” Tab F, not printed, was an October 14 memorandum from Laird to Kissinger recalling the urgency in Laird’s September 11 memorandum ( Document 32). In a handwritten postscript, Laird suggested that the Israel package be placed first in the message to Congress.
  3. See footnote 3, Document 35.
  4. The basic difficulty is that U.S. funding for South Vietnamese and Thai operations, as contemplated in NSSM-99, is precluded under the terms of pending DOD authorizing legislation. [Footnote in the source text.]
  5. This memorandum has not been found.