44. Memorandum of Conversation1

PARTICIPANTS

  • President Ford
  • James R. Schlesinger, Secretary of Defense
  • Roy Ash, Director, Office of Management and Budget
  • Donald Ogilvie, Acting Associate Director Office of Management and Budget

SUBJECT

  • DOD Budget Cuts

Schlesinger: The possible cuts are in two categories: One, items we didn’t ask for. We would not strongly oppose these. The others are items we would strenuously oppose. By internal logic we should make repairs to remain second to none, through a supplemental. We could defer that to 1976 because of the climate, but Stennis expects one, and Mahon is more experienced. If we go back, after the leadership (McClellan and Mahon) have said they have taken everything possible out of the DOD budget—if we then take more, we start an unraveling process. We have also worked hard to keep our Allies from reducing their budgets, and we would undercut that. As well for our potential enemies, who would see the reason for the slide.

On a substantive basis, we are in bad shape, about 30 percent below our strength before and about 25 percent below the average of [Page 213]the 1960s. The Rivers Amendment cancellation2 would save us $150 million this year and $500 million next year in base pay adjustments.

President: Let’s go through the list. I favor deferring promotions across the board. Why not do it for six months?

Ash: This is tied up with Executive pay. The question is how much is enough.

President: Three is probably psychologically better, but with economic positions like they are, not so many will want to get out.

Schlesinger: The bonuses item is okay. The reserve item is okay. We didn’t ask for the money.

President: How does maintenance fit with base closures?

Schlesinger: There’s no connection. Depot maintenance decreases readiness. Property maintenance is not so bad as depot.

President: Let’s leave operations for the moment.

Ash: I would leave out the civilian cut now.

President: Let’s cut the Texas package. No on shipbuilding.

  1. Source: Ford Library, National Security Adviser’s Files, Memoranda of Conversations, 1973–1977, Box 6, October 31, 1974—Ford, Schlesinger, Ash, Ogilvie. Confidential. The meeting, held in the Oval Office, ended at 11:25 a.m. (Ibid., Staff Secretary’s Office, President’s Daily Diary)
  2. In 1967, a bill (HR 13510—PL 90–207) passed by Congress to raise military pay included an amendment, proposed by Representative L. Mendel Rivers (D–South Carolina), Chairman of the House Committee on Armed Services, providing that such future raises be automatic and equal to salary increases for federal civilian employees. (Congress and the Nation, Vol. II, 1965–1968, p. 852)