154. Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon1

  • SUBJECT
    • Defense Budget Guidance

As a result of the DPRC studies,2 my discussions with you, and the discussions in the NSC on August 19,3 I have prepared a draft NSDM which sets forth your revised fiscal guidance for the Department of Defense for FY 72–76. (See Tab A)4

The issues surrounding the development of the guidance are explained below. First, however, I have included an issue somewhat apart from the fiscal guidance but which arose during the discussions.

Separate Issue

There are two views as to what we should do with our bomber force pending the outcome of SALT. For some time, the Department of Defense has planned on phasing out 76 B–52s by the end of FY 72 while activating some 40 FB–111s.

  • —Some argue, Gerry Smith, for example, that we could make the reduction without serious impact on SALT because the bombers involved are not strategically very significant; further, the Soviets probably [Page 593]expect substantial reductions in older B–52s, so they already have reduced value for bargaining purposes.
  • —On the other hand, the reduction could affect SALT in one of the following ways:
    1.
    Our negotiating position could be weakened if the Soviets believed that we will be forced to make strategic force reductions for budgetary reasons, regardless of SALT.
    2.
    Since we have advanced the position that bombers in storage should not count in the negotiations, the Soviets might charge us with duplicity if we start to put large numbers of additional B–52s into storage.
    3.
    Finally, we argue, in the SALT negotiations, that the FB–111 is not a strategic bomber. The reduction of B–52s with the simultaneous activation of the FB–111s gives the Soviets good grounds to argue that the FB–111s should be counted as equivalent to B–52s for arms control purposes.

The draft NSDM maintains the existing force of 540 bombers for the time being. If you prefer to adopt the other course, please indicate below and I will revise the NSDM.

Do not revise the NSDM, maintain the existing bomber force (my recommendation)5

Revise the NSDM to permit the planned reductions

The Fiscal Guidance

Strategic Forces.

We plan to preserve the existing strategic force posture until the completion of SALT except for air defense (and, possibly, bombers, depending on your decision above). There are, of course, substantial savings to be made in connection with a strategic arms limitation agreement.

Air Defense. There is general agreement that we can make sharp reductions in CONUS air defense missiles and aircraft. Originally designed against a high altitude attack, our air defenses are relatively ineffective against Soviet low-level attack techniques. Moreover, there is a serious question as to the value of air defense without a similar defense against missiles. In reducing the air defense we would be making very little reduction in capability since the most important part, the [Page 594]warning and surveillance system, would be retained. The reductions in air defense will save about $400 million.

Safeguard. While we do not recommend changes in Safeguard at this time, you should be aware of the fiscal implications. If we get a SALT agreement by July of 1971 which limits or bans ABM, we should be able to save more than $1 billion for the NCA option or about $2 billion for the zero option.

If SALT discussions continue, however, we can consider alternatives to our current full-speed-ahead program. By selecting the option of zero, one, or two new sites in FY 72, we can reduce outlays, although at the expense of both stretching out the program and increasing its total cost. No one recommends selecting such an option at this time, and the fiscal guidance is consistent with the current program of three sites in FY 72.

Titan Missiles. While we think the Titan should remain in the force until after SALT, there are some minor reductions which can be made in the operating costs. After SALT, we can retire the Titans at a savings of about $50 million a year.

General Purpose Forces.

It is generally agreed that we can accept a reduction of about $3 billion in general purpose forces. While it is true that we have a far better understanding of strategic forces, I think we have gained some insight into the general purpose forces during the DPRC study. Given that reductions must be made, I believe that they should be made in the following areas: tactical air forces, escort ships, anti-submarine warfare (ASW) forces, and amphibious task forces. While these forces contribute to our capability, it is not certain how much. Compared to the alternative of cutting divisions, there is little doubt that we should reduce in these areas.

In the draft NSDM, I have been quite specific as to the priorities to ensure that we protect the division forces which make the fundamental contribution to the NSDM 27 strategy.

Volunteer Force. The $2 billion for the volunteer force which you directed in NSDM 536 is reduced to $800 million. When added to about $500 million in pay increases for enlisted personnel with less than two years service, we have $1.3 billion as tangible evidence of your commitment to the zero draft concept. I have retained the NSDM 53 level of $3.5 billion for the FY 73–76 guidance. This amount may be larger than required for the force levels we are now envisaging and we may want to reduce it later.

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Support Costs. Finally, the NSDM includes reductions in support costs of $300 to $400 million. This is a reasonable reduction which Defense can spread across all programs.

Summary

The above reductions total about $4.5 billion. The FY 72 Defense outlays for the current program are estimated at $79 billion. Thus, the revised guidance for FY 72 is $74.5 billion. The FY 73–76 guidance is adjusted accordingly and rounded to the nearest billion dollars.

Additional Consideration

Since you have been pressing the Congress to pass the Defense Appropriation prior to the elections, the publication of a formal document making the kinds of reductions we have made might well be used in an attempt to make substantial reductions in the FY 71 appropriation.

However, I feel that it is important to issue the guidance, along with your priorities, if we are to avoid a last minute crunch with the cuts being apportioned uniformly across the Services or having ground forces and support items reduced while retaining procurement programs and hardware-intensive forces which we believe make a lesser contribution to our overall capability.

If you choose not to issue the NSDM until after passage of the Defense Appropriation and after the election, I can see that Defense gets the FY 72 figure for planning.

Recommendation

I recommend that you approve the draft NSDM:

Approved, issue the NSDM7

Disapproved, give the FY 72 fiscal guidance to Defense informally

Disapproved, withhold any guidance until later

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–219, NSDM 84. Top Secret. Sent for action. Lynn sent the memorandum to Kissinger on August 28 under a covering memorandum. Kissinger wrote two comments near the top of the memorandum’s first page. The first reads, “Hold implementation ‘till Monday [September 7].” The other, addressed to Wayne Smith of the NSC Staff, reads, “Run this past Schlesinger.” In a September 7 memorandum, Haig informed Kissinger that Schlesinger concurred. (Ibid.)
  2. See Document 152.
  3. See Document 153.
  4. Attached but not printed is Tab A, an undated, unsigned draft of Document 155.
  5. Nixon initialed this option.
  6. Document 139.
  7. Nixon approved this option and added the following comment: “K—Talk to Shultz (per our telephone conversation—9/2)”. The referenced telephone conversation was not further identified and no record of it has been found.