132. Minutes of Defense Program Review Committee Meeting1

JS [Schlesinger]: As side comment, mentioned problem of piecemeal commitments to domestic program throughout the year, so that DOD becomes the only place to chop.

The Committee should try to solve that problem.

Packard: Mentioned problem of $200 million not being enough. Would take $300 million.2 HAK said we have no brief for any particular program.

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I [Lynn?] commented you could never get it from Congress, they already get large credit sales.

Packard said that was probably true, but shouldn’t specify an amount or else you’ll blow the whole ball game.

JS: Gives briefing on his handout.3 Emphasizes the likely need for a tax increase if a deficit is to be avoided. NSDM 274 low level can barely be met.

DP [Packard]: Mentions that they are up to over $74 billion including pay increases, not counting zero draft calls.

JS: Then points out that other programs—civil rights, environment—plus $2 billion postal settlement, could make pessimistic projections look realistic. We’ve allowed only what the President has already asked Congress for.

President should focus on this problem at this time of the year.

GT [Tucker]: Do we assume President has 100% batting average?

JS: There’s a good chance this will happen, perhaps Congress will even increase them.

JS: It is possible to trim down on civ.[ilian] programs if President is determined to do so, but it’s tough.

Appropriate inference is that if President wants low force structure in NSDM 27, he will have to observe extensive stringency on non-defense side.

Piecemeal commitments will produce a gap for DOD in November.

DP: This makes it important to get non-defense program into focus.

HAK [Kissinger]: Can we get tiers of non-defense program so we can see what is being traded off?

JS: There are no tiers. These are commitments.

HAK: So your asking him won’t do anything now.

JS: Or to review other non-defense programs.

McC [McCracken]: Purpose here is to see totality of commitments. If we are strained, we have options

  • —defense vs non-defense
  • —within defense
  • —deficit
  • —tax increase. Admin. may have to face up to this.

HAK: We’ve got to give President idea of what he’s up against, not just that he’s got extreme stringency.

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We should tell him priorities, the options, what this means.

JS: You don’t want to change DOD guidance by $2 billion in November.

McC: Passes out handout, discusses balanced economy, fact that projections are in constant dollars.5

HAK: Basic point is that squeeze isn’t going to get any easier.

McC: Right. If we run a deficit, it will make things worse.

DP: What would happen with a deficit?

McC: Deficits aren’t bad per se. Problem is residential construction. Treasury shouldn’t divert savings.

GT: What would tax increase do?

McC: Would defer personal construction expenditures.

HAK: So from that point of view, tax cut was a disaster.

GT: How long would it take to feed back on GNP?

McC: It would take up to 4 quarters to adjust.

Packard: Passes out talking paper. Our guidance is $70.8.6

HAK: Where did you get this?

DP: From NSDM 27, SEA assumption.

GT: Mentions assumption of much greater reserve capability in new posture.

HAK: Is this upgrading inactive reserves accepted for 12 budgets?

Ans. Yes, except for zero draft.

DP: We’ll have to give you more details on this.

HAK: If we have zero draft, we’ll have to change all the projections. Who will do this?

DP: We’ll do it.

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HAK: You need 2 CVAs to keep 1 on station?7

DP: 3 for 1. It depends on whether you want to station people overseas.

We should do it whether it makes any sense or not.

GT: We couldn’t put 5 on station with 12 in the force.

HAK: So you cut force by 3, you cut number deployed by 1?

DP: You could probably cut 1 in SEA, though I know President wants contingency reserve.

If there is any likelihood this budget is on high side, we’ll have to come down on 12.

I’m leaving CVAN 70 aside, political problems.

AJ [Johnson]: What if these SEA forces don’t happen?

DP: This is one of big uncertainties. Based on linear phase down. On strategy, disengagement is a tricky business.

HAK: You could go to nuclear war.

GT: It pulls down threshold at which you escalate.

DP: This assures forces for 90 days in NATO.

GT: You have logistics support for one war.

HAK: You can fight for 90 days. This insures you lose in both places.

AJ: Support is for ourselves only.

Lee: It’s much less than 90 days. Zero for some of our Allies.

HAK: They only have to punch through in one place.

I get two things out of this

  • —uncertainty of 90 days
  • —uncertainty we can get forces to Europe.

Spiers: Assures some strategic warning.

DP: We must do our homework. We should move right on with our studies.8 This will define our problems more clearly.

DP: Subgroup to Working Group.

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HAK: This would be a subgroup to Working Group in a manner similar to Verification Panel.

GT: Summary Report Group would be essentially the Working Group.

DP: We have resources study. We need a domestic group, say from Ehrlichman’s shop.

HAK: Domestic staff isn’t interested in purely strategic side, but when we get to trade-offs, they should show the options.

Now as I understand it, BOB says DOD budget $3.4 billion too high.

JS: At least.

HAK: So we must see what impact of aid would be on domestic and DOD side.

Could we see what various levels of cuts in DOD would be, just as we see it on the domestic side.

DP: We should.

HAK: Should we do it in three increments?

DP: We could ask each of the Services what they would do with $1 billion. Shouldn’t arbitrarily allocate it.

HAK: President should see both sides. This group can do an analysis of commitments.

All the things people were writing about in the 1950s are coming true in the 1970s.

GT: There’s a big difference if you take $3 billion out in ‘72 or take it out over five years.

HAK: But take it out in tiers.

JS: You should look at a ‘72 stretch as well as a cut.

DP: We need to make assumptions about out years, or else Services will show everything can be put off.

DP: We’ve got some issues even at the present level.

HAK: We might end up with net evaluation. Tough ones will be between forces and foreign policy. Carriers must be looked at from that point of view. We may want to start a more select group on Vietnamization.

DP: You can’t do any better. We should stick to this plan. Anything else is plain guessing.

HAK: Let me discuss this work program with President, get some pieces of paper out.

Vannoy: We’re concerned about Vietnamization. It looks like it will come at expense of NATO.

DP: JCS are also concerned about $70.8, don’t think it’s enough.

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Vannoy: Also we’re concerned about increasing Soviet capabilities.

HAK: This should be part of that.9

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–98, DPRC General, Mar. 1970–Dec. 1970. No classification marking. Attendees included the following: Schlesinger, Packard, Kissinger, McCracken, Johnson, Spiers, Vannoy, Tucker, Lynn, and Vice Admiral John Lee representing ACDA.
  2. Lynn sent Kissinger a memorandum on March 21 informing him of the meeting’s agenda: the FY 1972 Defense budget within the context of the overall U.S. budgetary and economic outlook. The main problem, according to Lynn, was “how to reconcile the disagreements on the size of the budget and Vietnamization.” Lynn advised Kissinger that Packard, during his briefing, was likely to discuss the Defense Department’s MAP budget, which included $300 million for Korea. (Ibid., DPRC General, 1969–Feb. 1970)
  3. Not further identified.
  4. Document 56.
  5. The handout was not found. According to a memorandum for the record of this meeting, prepared by Vannoy, Schlesinger briefed the DPRC on the fiscal outlook for 1972–1976. Schlesinger provided two forecasts, both of which assumed no additional Presidential domestic initiatives. One indicated that the Defense Department’s current fiscal guidance of $74.6 billion for FY 1972 would result in a shortfall of $3.4 billion. The other, more pessimistic forecast indicated a shortfall of $6.6 billion. Both Schlesinger and McCracken, Vannoy wrote, “made a strong case for the President to have a clear view of available resources and competing commitments in order to avoid existing piecemeal commitment of resources in uncoordinated non-defense programs.” McCracken presented the CEA’s “view of the economy and the demands on it,” a review that “disclosed no significant excess resources until CY 75.” (National Archives, RG 218, Records of the Joint Chiefs of Staff, Records of the Chairman, Admiral Moorer, 334, DPRC)
  6. The talking paper was not found. Packard, according to Vannoy’s memorandum, identified Defense’s FY 1972 fiscal guidance as $70.8 billion that, when corrected for inflation and with the addition of two pay raises for military personnel, equaled $74.6 billion. Packard stated, however, that even that greater figure did not include funds needed to move to an all-volunteer armed force.
  7. According to Vannoy’s memorandum, discussion centered on the following topics: carrier force levels, the validity of disengaging in Asia to fight in NATO, the validity of the 90-day conventional war concept, and the implications of Southeast Asia planning assumptions.
  8. In a March 13 memorandum to Kissinger, Lynn stated that the Defense Department had proposed that the NSC Working Group oversee two studies: one on defense commitments and the second on defense versus domestic resources. (National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–98, DPRC General, Mar. 1970–Dec. 1970)
  9. Vannoy summarized the meeting’s results in his memorandum for the record: “There was agreement that the meeting had been a useful exploratory session; that we had real problems facing us in FY 72; and that the President needs to know what his options and associated risks are.”