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

87. Memorandum From Secretary of Defense Brown to President Carter¹

Washington, September 15, 1978

SUBJECT

• FY 1980 Defense Program

Since you appointed me Secretary of Defense, my own greatest concern has been assuring the adequacy of our defense against the growing threat from the Soviet Union. Though the U.S. has many other grave foreign policy problems, I believe that this one must take precedence in my thinking, because on the adequacy of that defense depends the protection of our country’s physical existence and its vital interests in the world, and the deterrence of a nuclear war whose occurrence would end the world as we know it.

— On August 13 I sent you a memorandum outlining the defense program for FY 1980–84 as projected at three different fiscal levels.² To maintain a coherent process in the FY 1980 budget preparation, it is necessary for you now to select a program level for the FY 80–84 period, with associated fiscal level. This will provide a basis for me to have prepared, for submission to you, the proposed budget request for FY 1980.

— On September 8 at Camp David I gave you a paper by the Joint Chiefs of Staff on this subject.³ That paper is, in my view, an accurate statement (though incomplete, as any statement inevitably is) of the current military balance and the trends. I subscribe to what it says in that regard. The present military trend is highly unfavorable to us. I believe we cannot permit that trend to continue, if we are to meet our responsibility to the nation’s security. It is in our power to stop the balance from becoming clearly adverse. To do so requires a greater defense effort.

I believe that this is one of the most important single decisions as to which I shall make a recommendation to you, and that your decision will directly affect the safety of the people of this country.

I.

The Soviet military buildup is the greatest direct threat to the United States. It continues to compound at 4% every year, year in and year out. That has gone on for almost twenty years; over that same period our own defense effort has not increased in real terms, and has halved as a percentage of GNP or of the federal budget.

Military capability, of course, is forces, equipment, and trained personnel, not money. But money largely determines those other factors. Funding is a crude—but reasonably good-overall measure of military capability. It is an even better measure of trends.

Depending on our predilections and our detailed judgments we may differ as to which side—the U.S.S.R. and its allies or the United States and its—is ahead militarily today. But the balance is close, and six or eight years ago it was not—we were clearly ahead. If the trend is not reversed, the balance will not be close six or eight years from now—the Soviets will be clearly ahead.

The trend lines are crossing or already have crossed. For the first time since World War II, the balance of military power is in process of shifting. It is true that the Soviets have some problems that we do not, such as the PRC—just as we have problems that are unique to us. Those problems of theirs are not enough to offset the advantage they are gaining. Unless we move, in a steady, real-growth way, as you pledged to the NATO allies and directed in PD–18, the gap will widen more and more. And the results, in my view, will not be long in coming.

II.

I am as aware as anyone—indeed, I have often reminded others—that spending for military purposes is not the sole determinant of national security. If it were, we already would be in a situation much more dangerous than the troubling one we now face.

I also am aware that there are many claims on the federal budget, a budget which must be controlled in order to help fight inflation. But no claim compares in urgency to the claim which makes all else possible—the physical security of our country and the deterrence of war.

Persistent inflation has had the effect of robbing our defense, just as it has robbed our people. For in the past three years the estimates of anticipated inflation allowed for in the Defense budget have not equaled the actual inflation after the results are counted each year. The same thing will happen again next year if inflation estimates are not realistic—an apparent increase in real defense program disappearing in added costs of trying to maintain even the current level.

The following table shows how inflation has been underestimated in the preparation of the Defense budget:

Year	OMB Inflation Estimate at Time of Budget Submission	Actual Inflation
CY 77	5.6%	5.9%
CY 78	6.1%	7.2%4
CY 79	6.2%5	7.5%/8.0%6
CY 80	5.7%7

In planning the Defense budget, the adequacy of the dollar figure finally adopted is sensitive to the assumption about inflation. For instance, if the inflation estimate is understated by 1½ percentage points, half of a planned 3% real growth simply disappears. I am convinced that the OMB inflation figures for FY 1979 and again for FY 1980 are seriously underestimated.

Underestimation of inflation during the past few years has been an important contributor to a persistent slighting of our defense needs. The following table, and Figure 1 (next under), tell the story:

U.S. Defense Budget (TOA)
(Figures in billions, constant 1977 $)

FY 73
FY 74
FY 75	$ 98.6
FY 76	103.0
FY 77	108.3
FY 78	108.48
FY 79 (request)	109.39

FIGURE 1

The trend is even more disturbing when compared with that of Soviet defense spending, as is shown in Figure 2. As you can see, at a time when the Soviets have been increasing their military expenditures at a steady rate of 4% per year (and their military hardware and R&D expenditures even more), our defense expenditures after a period of decline have risen slightly in the two Ford budgets, and then leveled off in FY 78 and FY 79, if realistic inflation figures for those years are used. In my view, that movement, which may even result in a decline in FY 79, must not continue.¹⁰

FIGURE 2

III.

I have wanted to discuss this situation with you personally before making a recommendation to you on the Defense budget level for FY 1980. I plan to make such a recommendation in the next few days.

As Secretary of Defense, I of course feel a particular responsibility for the adequacy of our military capability. But you should know me well enough to know that I am not by nature an alarmist, and that in matters of this kind I consider my position carefully. I believe I owe it to you to make you aware of my very deep concern.

Harold Brown

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Agency File, Box 5, Defense Department: 9/78. Secret. Carter initialed the upper right corner of the memorandum. In a September 22 memorandum, Brzezinski informed Brown that Carter had seen the memorandum (Ibid.)
2. See Document 75.
3. See Document 83.
4. Based on actual data, first six months. [Footnote is in the original.]
5. OMB estimate in FY 79 budget submission. [Footnote is in the original.]
6. C. Schultze’s estimate/R. Strauss’ estimate. [Footnote is in the original.]
7. OMB estimate in FY 79 budget submission. [Footnote is in the original.]
8. Assumes 8.0% actual inflation. If 7.5% inflation is assumed, figure is 108.7. [Footnote is in the original.]
9. Assumes 8.0% inflation. If 7.5% inflation is assumed, figure is 109.8. [Footnote is in the original.]
10. Some savings in the defense budget from increased “efficiency” are theoretically possible. I have accomplished some, and I am making every effort to realize others. Most take time to achieve, and most of the really glaring inefficiencies (e.g., unneeded bases, anti-competitive contracting rules, excessively high civil service pay) exist because they have political support in the Congress which has been reflected in law. Some of those inefficiencies have the support of other offices in your Administration—though they have not had yours. I do not believe that I—or any other Secretary of Defense—can achieve efficiency gains which can offset in any substantial degree inadequacies of budget level. [Footnote is in the original.]