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

Dear Bill:

This letter provides policy guidance for the preparation of the fiscal year 1974 budget submission for the International Security Assistance Program. The President has spoken at the Cabinet meeting of July 20 of the critical budget situation facing us and emphasized the need for rigorous fiscal restraint, effective program development, and strong agency management in the fiscal year 1974 and the years to follow.2

The Administration will continue to apply creative solutions to national problems. However, we simply cannot afford to consider new proposals or enriched programs that are not accompanied by offsetting reductions. Rather, it will be necessary to terminate some ongoing activities, to curtail others severely, to reduce some operations to a Spartan level, and to institute management improvements that will increase productivity and promote greater efficiency and effectiveness in agency activities.

The choices that have to be made will be extremely difficult; it may even seem painful. Of course, the priorities and effective innovations of our Administration should be protected to the maximum extent possible. We stand ready to meet with you and consult on these matters if you would like our help.

As you know, the Administration is actively seeking enactment of a rigid ceiling on 1973 outlays. Firm efforts must therefore be made to hold down 1973 obligations and outlays. Postponements and stretch-outs of 1973 commitments are especially encouraged if they lead to reductions in 1974 outlays. On the other hand, program deferrals in 1973 that lead to increased outlays in 1974 obviously are not acceptable, because they will exacerbate an already difficult 1974 problem.

[Page 222]

Enclosed are the specific planning ceilings for budget authority and outlays for the International Security Assistance Program to guide you in developing your 1974 budget submission. The President’s decisions on the budget totals require that you submit your budget at or below those figures. Each of us must adhere strictly to the ceiling totals provided, both in the initial submissions and throughout the budget process. It should be understood, however, that subsequent developments may necessitate reducing these planning ceiling amounts; thus, there is no assurance that your final budget allowance will remain at this level.

We will shortly give you the date for an initial submission of budget materials. It is of course essential that this initial submission be carefully prepared, and on time (whether or not congressional action has been completed on the current request), in order to provide the President sufficient time to consider the issues and to transmit the 1974 budget promptly to the next Congress.

I recognize that the task assigned by this letter will be difficult to carry out. But as the President said in Cabinet, it is absolutely essential that we prevent the higher prices and higher taxes that inevitably will result if we do not make severe cuts in Federal spending.3


Cap Weinberger
[Page 223]



International Security Assistance Programs

(in millions)
Budget Authority Outlays
Security Assistance-Military
Federal Funds
Gross Amounts
Grant Military Assistance 580 671
Foreign Military Credit Sales 570 407
Liquidation of Foreign Military Sales -20
Deductions—proprietary receipts -183 -183
Total, Federal Funds 967 875
Trust Funds (Net) (cash sales) 650 -100
Security Assistance-Economic
Federal Funds
Security Supporting Assistance 663 682
Total, Net 2,280 1,457

These figures will be adjusted for changes in the trust fund, liquidation of foreign military sales account estimates, or proprietary receipts.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 324, Foreign Aid, Volume II 1972. No classification marking. Attached to an August 14 memorandum from Kissinger to the President agreeing with Laird’s position that the FY 1974 security assistance ceilings were too low. See footnote 1, Document 95.
  2. There is no record of a Cabinet meeting on July 20. The Cabinet had a breakfast meeting with the Republican Congressional leadership on July 21 and then met separately in the Cabinet Room. Rogers, Laird, and Weinberger attended both these meetings. (National Archives, Nixon Presidential Materials, White House Central Files, President’s Daily Diary)
  3. On September 19 Deputy Secretary Irwin wrote Weinberger regarding this letter. Irwin noted that the planning ceilings, even if fully authorized by Congress, would require a cutback on projected program requirements for FY 1974. He indicated that Under Secretary Tarr was conducting an interagency review of the security assistance program that would provide the basis for the budget submission in October. (Washington National Records Center, Agency for International Development, AID Administrator Files: FRC 286 75 A 13, Supporting Assistance FY73)