76. Letter From Secretary of State Rogers to the Director of the Office of Management and Budget (Shultz)1

Dear George:

In my letter to you dated October 29, 1971, submitting our security assistance budget request for FY 1973, I made reference to a special Security Assistance Contingency Fund.2 The budget requirement for this fund—$100 million—will be additional to the FY 1973 program for Economic Supporting Assistance (SA) and the Military Assistance Program (MAP).

I should like to explain the purposes of the proposed Contingency Fund. As you recall, the President, in his Message to the Congress of April 21, 1971, transmitting draft legislation on foreign aid, requested authority for $100 million for the President’s Foreign Assistance Contingency Fund for FY 1972. The Fund was intended to permit the Administration, with due notification to the Congress, to meet worldwide contingencies in ways compatible with our national interests. The President made clear that he sought unprogrammed funds for use, on short notice, when sudden crises in the international community required us to act promptly.

[Page 177]

Congress has in recent years appropriated only very limited funds for unprogrammed contingencies. Moreover, various amendments to the Foreign Assistance Act and substantial reductions in FAA appropriations have limited the Administration’s ability to meet unexpected problems rapidly and effectively. As a result, we have frequently been compelled to reallocate funds to meet new contingencies by transferring monies from programs previously justified to the Congress as highly important to the U.S. This practice has encountered Congressional resentment and has created major programming problems for the Executive Branch. I believe that a new approach is required—one which assures the Administration adequate flexibility to meet unforeseen crises and is at the same time forthright with the Congress.

I therefore propose a $100 million Contingency Fund for Security Assistance in FY 1973, to be utilized for Military Assistance and Economic Supporting Assistance purposes. This Contingency Fund would be appropriated to the President and apportioned to the Secretary of State who would maintain control over its use.

Inclusion of a Security Assistance Contingency Fund in our FY 1973 budget request will require certain adjustments in the FY 1973 budget requests related to the Foreign Assistance Act, already submitted to you, as follows:

  • First, additional FY 1973 New Obligational Authority of $100 million for the Security Assistance Contingency Fund, and a related increase in the FY 1973 outlay ceiling of $30 million.
  • Second, a reduction in the Supporting Assistance request of $50 million in New Obligational Authority and $14 million in outlays, bringing the Supporting Assistance totals to $880 million and $811 million respectively. The undistributed $50 million of Economic Supporting Assistance which was requested in Dr. Hannah’s FY 1973 submission to you of October 12, 1971, will no longer be required since the Security Assistance Contingency Fund would cover such needs.

A.I.D.’s contingency fund of $30 million in FY 1973 requested by Dr. Hannah on October 12, 1971, would be apportioned to the A.I.D. Administrator and would be limited to Development Assistance categories, primarily disaster relief. The latter fact could be made clear through legislative history.

I recognize the difficulty of preparing a persuasive brief for the Security Assistance Contingency Fund before the Congress. However, I am confident that, with adequate advance preparation, we will be able to secure general support on the Hill for this approach. Before completing the FY 1973 Congressional Presentation, we would consult with the Congressional leadership and appropriate Congressional [Page 178] Committee members to ascertain likely Congressional reactions. If these consultations should show Congressional hostility to the idea, which might in turn provoke further restrictions on the Administration’s flexibility in using FAA funds, we would need to reconsider the whole approach.

I would welcome your support in establishing the proposed Security Assistance Contingency Fund. If you have any comments, my staff would be happy to meet with your representatives.


William P. Rogers
  1. Source: National Archives, RG 59, Central Files 1970-73, AID (US). Confidential. Drafted by W.H. Lewis (PM/PA) on November 4 and cleared by Leahy (H) and O’Connor (CO/SA). The letter was forwarded to Secretary Rogers through Irwin under cover of a November 4 memorandum from Spiers recommending that the Secretary sign the letter.
  2. The October 29 letter transmitted estimates for FY 1973 security assistance and projections for FY 1974-1977. Rogers indicated he would shortly send his proposal for about $100 million in Contingency Fund Security Assistance for FY 1973. (Ibid.)