Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

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

Washington, May 20, 1969.

SUBJECT

• Aid Issues

Your meeting this morning with the President

I suggest that you make the following points to the President at this morning’s briefing:²

1. Arthur Burns raised several points yesterday on the new aid legislation,³ which will be ready for you to send to Congress in a few days. (FYI: After you left last night, Richardson and Harlow decided to seek a meeting between the President and the Congressional leadership later this week to avoid having to postpone the hearings which start next Monday. I think we are in good enough shape to give the President an adequate briefing if the meeting is held no earlier than Thursday.)⁴

2. Most of his points are minor matters and have been agreed upon by all agencies. (FYI: They dealt with specific features of the proposed Overseas Private Investment Corporation.)

3. Only one point which he raised requires your personal attention and it had already been flagged in a memorandum to you from Bob Mayo on the bill.⁵ (FYI: This is the proposed removal of a long series of country restrictions written into the aid legislation by Congress over the past eight years. They are explained in the “background” section of this memorandum.)

4. I will be getting to you later a package of papers on the aid legislation including: (a) briefing material for your discussion of aid with the Congressional leadership;⁶ (b) the final draft of your aid message to the Congress, which will transmit the bill;⁷ (c) recommendations on the several issues in the bill which require your personal decisions. (FYI: They are the formation of a commission, how to handle the Hickenlooper amendment, the omission of the country restrictions, and Secretary Laird’s proposal to add $108 million of military assistance for Korea to the request.)

Background

Arthur Burns has two objectives in his memorandum of last night to the President on aid:⁸

1. To take credit for achieving minor changes in the Overseas Private Investment Corporation section of the bill. All agencies agreed with his points so they are not an issue.

2. To warn the President against seeking removal of the series of country prohibitions (“barnacles”) in the present Foreign Assistance Act. This is the only substantive issue raised by Burns and it was already raised by Bob Mayo in his memorandum to the President on the overall legislation.⁹

Attached is an analysis of the provisions whose omission from the new bill is proposed.¹⁰ (Five of the present restrictions would be retained—Hickenlooper, a revised Conte-Symington concerning LDC military expenditures, and those on aid to Communist countries and to countries with whom we do not have diplomatic relations.)

Of the thirteen provisions whose omission is proposed, four are encompassed in other laws and the other nine have not been applied anyway.

This led Burns to compare the risk of Congressional demagoguery against what appeared to him as small gains of omitting them. It is true that a request for omission could be portrayed as an effort by the Administration to eliminate laws which “protect the interests of the United States” against Communist countries, welchers on debts, military adventurers, countries permitting mob action against U.S. embassies, seizures of U.S. property, etc.

The main arguments for omission are:

1. The restrictions can pose problems for the administration of the program without providing any benefits for overall U.S. interests.

2. They shift exercise of foreign policy prerogatives from the President to the Congress and can reduce the President’s flexibility in specific cases.

3. The new Administration has a chance to get rid of them now but will probably forfeit that chance forever if it endorses them in its first aid bill.

Conclusion and Recommendation

In my view it is a close issue. Removal of the “barnacles” is clearly desirable but is not of high priority. I know of no specific aid loan or country program which has been seriously handicapped by any of the restrictions which would be dropped.

On the other hand, the risk is probably not too high either. Every change has been cleared with its Congressional sponsors (except where they are no longer in Congress). It must be admitted, however, that other Congressmen eager for an issue could raise trouble.

I therefore recommend that we propose omission of the restrictions in the new legislation but retreat if significant Congressional opposition develops. The probable result is that some will be omitted and a few retained, with a net gain for aid.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 193, AID Volume I 1969. Secret.
2. This meeting has not been identified.
3. Not further identified, but see footnote 8 below.
4. May 22. Earlier, under cover of a May 16 memorandum, Kissinger forwarded to the President Under Secretary Richardson’s May 2 and May 13 memoranda with recommendations for launching the new foreign assistance program, with the President’s message slated for May 23. The President rejected a briefing on May 19 and requested a “memo instead.” Regarding the recommendation that he meet with senior Republicans on the four committees handling the AID bill on May 20 and the bipartisan Congressional leadership on May 21, the President checked the “Disapprove” and “Speak to me” options. (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 323, Foreign Aid Message)
5. This may be a reference to a May 14 memorandum from Mayo to the President, which included discussion of the “barnacles,” restrictions contained in Section 620 of the Foreign Assistance Act, many of which Mayo wanted to revise or repeal. (Ibid., Agency Files, Box 206, Bureau of the Budget) It may also be a reference to a May 20 memorandum from Mayo to the President regarding the barnacles, which was attached to Kissinger’s May 22 memorandum to the President, Document 10.
6. The President, along with Vice President Agnew, Under Secretary Richardson, AID Administrator Hannah, and others, met with bipartisan Congressional leaders from 5:14 to 6:36 p.m. on May 27. (National Archives, Nixon Presidential Materials, White House Central Files, President’s Daily Diary)
7. The President sent his Foreign Assistance Message to Congress on May 28. See Public Papers of the Presidents of the United States: Richard Nixon, 1969, pp. 441-447.
8. No May 19 memorandum from Burns to the President was found, but see Document 9.
9. See footnote 5 above.
10. Not found.