Foreign Relations of the United States, 1977–1980, Volume IV, National Security Policy

168. Memorandum From Fritz Ermarth and Jasper Welch of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, November 23, 1979

SUBJECT

• US and Soviet Defense Expenditures—Growth Rates and Cumulative Results

We have continued to examine the consequences of various US and Soviet total defense growth rates in terms of cumulative defense expenditures for the two sides in the decade 1980–1990. The following are some salient points, all referenced to constant dollars.

Background Data

— Currently, the USSR is spending about 50% more on defense than the US, according to CIA dollar costing.

— During the decade 1968–78, the Soviets spent cumulatively about 10% more than we on defense; or about 30% more than we if US Southeast Asia expenditures are extracted as “wasted.”

— On the basis of physical indicators, the CIA projects that the Soviet defense effort will continue to grow at past rates of about 3% per annum, at least until the mid-1980s. A steady Soviet defense growth rate of 3% throughout the decade 1980–1990 is reasonable.

Implications

— If Soviet defense grows at 3% through the 1980s, a US defense growth rate of 3% will perpetuate the present 50% advantage of the Soviet side in annual effort. At these growth rates, the Soviets will spend cumulatively over the decade 50% more than the US, as compared to the past decade in which they spent 10–30% more than the US.

— If the Soviet effort grows at 3% per annum, a US growth rate of about 5.5% would be required to “duplicate” the experience of the last decade, i.e., a 30% Soviet advantage in cumulative outlays, not counting US Southeast Asia expenditures. Of course, the absolute magnitude of this disparity will be larger at the higher spending levels of the 1980s. A US growth rate of 6% would narrow the cumulative gap to a 25% Soviet advantage.

— To equal the cumulative expenditures the Soviets would achieve at a steady 3% growth rate through the 1980s, the US total defense effort would have to grow at 9.5–10.0% per year. Even if total Soviet spending remained constant (zero growth rate) for a decade, it would still require an average annual US growth rate of 6.5% to match the cumulative Soviet effort because of the gross disparity of the two sides at the starting point (1.5:1).

Conclusions

— The outlook for the return on various defense growth rates to the two sides in terms of cumulative expenditures is dominated by their vastly different starting positions.

— Even if a 25–30% disparity in total effort is deemed tolerable during the 1980s (because of Allied contributions, technological advantages, etc.), US growth rates of 5–6% per annum appear to be rock-bottom for a competitive US effort when there is no evidence that the growth of the Soviet effort must taper off.

— A US commitment to growth rates of no more than 3–4% either means that a roughly 50% Soviet advantage in cumulative effort is tolerable (because of vastly increased NATO contributions) or it means we are convinced that Soviet defense spending must decline significantly in the next decade.

The purpose of this memo is to assure that you have a good summary of the relationship between defense growth rates and cumulative results. While a very significant perspective on the defense growth rates we must aim for, it is not to be seen in isolation from other factors, e.g., Allied efforts, China, technology, and non-military counters to Soviet military power.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Agency File, Box 7, Defense Department: FY 1981 Presidential Review, 11/79. Confidential; Outside the System. Sent for information.