34. Memorandum of Conversation1


  • President Nixon
  • Cabinet Meeting

President: I want to give the Cabinet officers a rundown of how the Government is operating. After each of you has reported, we will have a wrap-up session, perhaps at Camp David.

We have been concentrating in the last weeks on economic matters. We’re sending a report to the Congress today—which is worth reading.2 It explains why there can be no tax cut, and why we need a tight budget. You will all have to cut some, with the possible exception of DOD.

Let me say something about Ken Rush’s responsibilities. [He circulates a paper].3 It’s been reported that he will be an economic Kissinger. There is only one Kissinger, and economics is different from the NSC. Many Cabinet officers have responsibilities in this area. Rush will be a funnel, not a filter. All Cabinet areas affect the economy. In foreign policy, where there can be only one voice—even here we assure that every voice can be heard—but the President has to make the decisions and it must be tightly held. Economic decisions are much broader.

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Let me fill you in in the Middle East.4 We have had a number of breakthroughs, but both sides are still holding on certain points as a matter of honor. I can’t tell you how it is going because it is still 50–50.

The Government is moving ahead and this is what we want to demonstrate. Brinegar, you begin.

[Omitted here is discussion of domestic transportation issues.]

[President:] Now to Earl and food.

Butz: The political problem of food prices is behind us. We are having a tremendous increase in production. Wheat is 2.2, up 500 million, corn is up 1.5–2 million bales. In 1973 we had record farm income. In 1974 it will be a bit less. Soft spots are cattle and beef; the feeders are now actually losing money. Food prices should stay at this level the rest of the year. Retail margins are widening. Exports will total $21 billion, imports $9 billion—for an 11.5 contribution to the balance of payments. We will use 700 million bushels of wheat—the rest is for export. We need to export half of the soybeans.

On food aid and stockpiling, a debate is developing. Humphrey and his friends think we should have a large Government food reserve. I disagree. We are out of the food reserve business and I think we should stay out. We carried the world food reserve and everyone got soft—they didn’t have to plan. We need food reserves, but they can be carried by private industry and foreign governments. We have carried the lion’s share of production aid for years, going back to the Marshall Plan.

President: The whole idea that if we feed the world there will be peace is nonsense. But taking an area like the Middle East, if we develop a new relationship with the Arabs, the Middle East is one of the hungriest areas of the world. Food is indispensable in our foreign policy. The Soviet Union is providing arms to the Arabs; we can counter here. If we tried to give arms both to Israel and the Arabs, there would be a hell of a fuss raised.

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The United States should move away from multilateral to bilateral aid. Keep this in mind at the World Food Conference.5 We need it for foreign policy. As our military assistance recedes, we need other bilateral aid. The IMF sort of thing is OK, but we need this tool for our foreign policy. This has to be closely held, because it goes against the grain of the altruists.

Scali: We can count our bilateral aid toward world goals, and we can’t look too selfish.

President: OK, but let’s have no illusion that we need to be able to influence governments and what they do. The World Bank does a fine job, but it is not an effective instrument of U.S. foreign policy. Frequently, it has not helped where we wanted and has helped countries where is was not in our interest.

One final word, we are not going to solve our budget problems by slashing DOD. We are at a critical juncture in foreign policy. We don’t rule out cuts in DOD, but that is not our goal. The Soviet Union has a crash program going on and unilateral cuts would be disastrous. India goes nuclear so it can push its weight around a bit in South Asia.

We must stay strong not just in order to be number one, but because it is essential for our diplomacy with the Soviet Union, the Chinese, Europe and the rest. If they get the impression the U.S. is turning away from world leadership, we are finished.

I want every Department head to look hard at personnel. We all know there can be some cutting. I would rather have the Departments initiate it than do it from the White House.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 1029, Presidential/HAK MemCons, MemCons—HAK & Presidential, May 8–31, 1974 [1 of 3]. Secret. The meeting was held in the Cabinet Room at the White House. According to the President’s Daily Diary, the meeting took place from 10:05 until 11:34 a.m. In attendance were Nixon, Ford, Simon, Schlesinger, Morton, Butz, Dent, Weinberger, Brinegar, Ash, Burch, Rush, Schubert, Bush, Attorney General William Saxbe, Secretary of Housing and Urban Development James Lynn, United Nations Ambassador John Scali, Haig, Ziegler, Cole, Scowcroft, Hartmann, and Special Assistant to the President David Parker. (Ibid., White House Central Files)
  2. The President’s message transmitting the report of the Council of Economic Advisers on May 28 is printed in Public Papers: Nixon, 1974, pp. 460-461.
  3. Brackets are in the original. Nixon announced on May 25 that he was appointing Deputy Secretary of State Rush as his Counselor for Economic Policy at Cabinet rank. For additional details on Rush’s appointment, see ibid., p. 453. The paper was not found.
  4. Kissinger departed Washington on April 28 for the Middle East in order to negotiate a separation of forces agreement between Syria and Israel. En route, he met with Gromyko in Geneva on April 28–29 in preparation for Nixon’s upcoming summit meeting with Brezhnev. For records of the Kissinger-Gromyko meetings, see Foreign Relations, 1969–1976, volume XV, Soviet Union, June 1972–August 1974, Documents 175178. Kissinger then met with Boumediene and Sadat before shuttling between Damascus and Jerusalem May 3–29. During this period, Kissinger also made short visits to Jordan, Cyprus, Saudi Arabia, and Egypt in order to brief Jordanian King Hussein, Gromyko, Saudi King Faisal, and Sadat on the negotiations. Documentation on Kissinger’s shuttle diplomacy and the disengagement agreement signed by Syrian and Israeli representatives on May 31 is printed ibid., volume XXVI, Arab-Israeli Dispute, 1974–1976.
  5. See Document 47.