79. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon 1
- Foreign Aid Budget for 1973
The memorandum from George Shultz at Tab 1 summarizes OMB’s FY 73 budget recommendations for foreign aid, both security and development.[Page 184]
In brief, the recommended FY 73 program is tight but adequate to support our foreign policy objectives. The following table highlights the new obligational authority changes from the 1972 budget and current estimate (based on the conference and Senate-passed authorization bill).
|($ millions)||72 Budget||72 Estimate||73 Recommendation|
|Development and Humanitarian Assistance||2,808||2,516||2,657|
|Total, Foreign Assistance||4,886||4,064||4,755|
(A more detailed table is at Tab 2)2
Your security assistance request will be slightly above that requested and 25 percent above what we anticipate the Congress will give us for FY 72. Your economic assistance request will be about $150M less than you sought, and about an equal amount more than we expect Congress to provide, for FY 72.
Significant items include the following: The $60M Thai program has been transferred from the Defense budget to MAP in conformity with the pending aid authorization bill. The increase in supporting assistance from $763 to $811M results from the withdrawal of U.S. forces from Vietnam and the consequent need to supplement GVN foreign exchange earnings. The Indonesian program includes $25M in MAP and $115M in development loans, reflecting your recent decision on the U.S. pledge to Indonesia. South Asian relief needs are highly uncertain; therefore, we recommend $100M be included in the budget with an indication that a supplemental appropriation may be needed later.
George Shultz’ recommendation is that we only go for $50M for the Contingency Fund. His rationale is that the Congress has in the past been reluctant to approve our requests. Indeed, there is only $30M in the current authorization bill, and the appropriation is likely to be reduced even further. Congress looks with suspicion on what it sees as an uncontrolled amount. The uncertainties which we can expect, in particular those associated with relief for South Asia and possible additional security needs in Southeast Asia, warrant our asking for a larger amount. I recommend you request $100M for the 1973 Contingency Fund rather than the $50M George has proposed.[Page 185]
That you approve the proposals as submitted by George Shultz with an addition of $50M to the Contingency Fund, making a total of $100M.
- Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 323, Foreign Aid, Volume I 7/70-1971. Secret. Attached is a December 27 memorandum from Kennedy and Hormats to Kissinger recommending that he forward this memorandum and the attached December 23 memorandum from Shultz to the President. Kennedy and Hormats expressed a concern that Shultz was recommending only $50 million for the Contingency Fund instead of agency requests for $130 million. They agreed that “prospective uncertainties” warranted $100 million. On the December 27 Kennedy-Hormats memorandum, Haig wrote: “Dick, I’ll OK for HAK for Pres.”↩
- Not printed.↩
- Haig checked the Approve option and wrote: “Haig for HAK for Pres.” An attached December 30 memorandum for the record by Kennedy indicates that he notified Kenneth Dam of the approval and the preference for an additional $50 million for the Contingency Fund. Dam reportedly indicated that the additional $50 million would be put in the Contingency Fund.↩
- Following further refinement of the numbers, the Foreign Assistance legislation for FY 1973 was sent to Congress on March 14, 1972. In his transmittal message the President recalled the delay and low level of funding of his FY 1972 request (see footnote 2, Document 78) and urged prompt action to authorize and appropriate the full amount of the FY 1973 request. See Public Papers of the Presidents of the United States: Richard Nixon, 1972, pp. 412-413. He also urged action on his foreign assistance reform proposals of April 21, 1971, legislation that was never enacted. Nevertheless, in his September 19, 1972, message to Congress transmitting the “Report on the Foreign Assistance Program for FY 71,” the President continued to hope the April 21, 1971, proposals would “provide the basis for a discussion with the Congress on ways in which we can structure our programs to increase their effectiveness.” See ibid., p. 877.↩
- None of the attached tables is printed.↩