131. Memorandum From the Director of the Office of Management and Budget (McIntyre) and Secretary of State Vance to President Carter1


  • Reducing U.S. Employment Abroad


Altogether about 2.1 million Americans live abroad. Of these, about 1.2 million are expatriates, retirees, and business people. The remaining 953,000 (including 439,750 dependents) are abroad because of direct involvement in U.S. Government activities. Of these, 492,483 are military and civilian defense personnel who relate to our military posture and 396,000 dependents. In addition, there are some 64,000 Americans (including 43,750 dependents) stationed abroad who are associated with U.S. diplomatic missions.

The U.S. Official Presence Abroad, December 1978
Military Commands Diplomatic Missions Total
Military Personnel 461,447 4,698 466,145
Civilian U.S. Government Employees 31,036 9,022 40,058
Peace Corps Volunteers 6,899 6,899
Dependents (est.) 396,000 43,750 439,750
Total 888,483 64,369 952,852

The number of Americans in diplomatic missions is not fixed; indeed, there are substantial pressures to increase rather than reduce the number of these positions. These pressures include a rising interest in replacing foreign national employees with Americans, the recent AID policy of emphasizing increased field staffing in order to reduce the Washington complement, and the Administration’s growing interest in export promotion and science and technology.

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On May 30, you directed a review of staffing levels at our diplomatic missions abroad,2 to include visits by two joint State/OMB teams to twelve large posts followed by a thorough ZBB review of all positions abroad. The two teams, which we are calling the Review Group, have completed their surveys and have prepared a report for your consideration, which is attached.3 Meanwhile, OMB has issued instructions to the departments and agencies to begin the ZBB review.4


The Review Group concluded that there are indeed instances of overstaffing abroad and recommended reductions of over 500 American positions (approximately 12 percent) in the 12 missions visited. The Review Group also identified some instances of understaffing for necessary current functions and warned against across-the-board percentage cuts as a method of accomplishing future reductions. Instead, the Review Group prepared a number of specific proposals designed to reduce current overseas civilian presence by eliminating or reducing the least critical functions. In addition, they made recommendations of a broader nature designed to establish a firmer control over future staffing increases and strengthen the capability of our Ambassadors to utilize the remaining overseas personnel more effectively in the performance of essential tasks.

We have examined the Review Group’s recommendations and plan to deal with them in the following way. It is possible to implement some of the recommendations at once, and we believe that you should sign the attached directive (TAB A)5 to give force to the overall effort. Action can be taken on a second group of recommendations after further review with the agencies concerned, and we propose to conduct such a review, in conjunction with the Fall budget process, aiming at a second Presidential directive in November (TAB B). The remaining recommendations (TAB C) deserve a considerable amount of analysis, and we believe they cannot be brought to a final decision point until next year.


Agencies with personnel in diplomatic missions are being requested to examine whether functions can be abolished or performed more economically with fewer U.S. citizen employees abroad. This ZBB review will require agencies to analyze their FY 1981 overseas staffing [Page 515] requirements, perform priority ranking of overseas positions in packages, and report to OMB by September 15.

The intent of this review is to depart from the traditional percentage cuts which, as applied across-the-board, have tended to reduce personnel levels without regard to each agency’s functional responsibilities. The purpose of the review is to reduce the number of U.S. overseas personnel by identifying discrete functions/activities which could be eliminated, reduced, or carried out more efficiently from U.S. territory. State will assist in the review.

Other force structure related military and civilian positions will be examined in the context of the regular Fall Budget Review as will the intelligence units under the area military commands. Although dependents of military personnel will not be examined specifically, the Senate has requested the DOD to report by December 1979 on ways to reduce the number of dependents abroad.


That you sign the memorandum at TAB A which formally announces your initiative to reduce U.S. employment abroad, takes some immediate steps in that direction, and directs the departments and agencies to cooperate in the continuing effort.

The Attorney General Designate, the only Cabinet officer who has employees who are directly affected by the immediate recommendations, does not concur with the third action item in TAB A which directs the closing of all three regional offices of the Drug Enforcement Administration abroad (Paris, Mexico City, Bangkok) by the end of Fiscal Year 1980. He prefers to close only the Paris and Mexico City regional offices by the end of Fiscal Year 1980, and put off the decision on Bangkok until a later date. The Justice Department believes that the presence in Bangkok of a Regional Director and supporting staff has contributed to enforcement gains in stemming the illicit supply of heroin from Southeast Asia.

Last May, another interagency review group, which included Department of Justice representatives and which conducted an on-site inspection,6 recommended that regional activities at Bangkok be relocated to the Washington, D.C. headquarters of DEA. The Bangkok office would then be converted into a “country” rather than a “regional” office. We agree with the interagency group that a regional office in Bangkok is not required in order to operate an effective narcotics control effort across national borders.

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Considering all of the relevant factors, we recommend the closure of the Bangkok regional office by September 1980. Should you agree with the Attorney General Designate’s recommendation rather than ours, we will modify Action Item 3 on page 2 of the Memorandum to Departments and Agencies accordingly.

OMB and State will proceed on the other issues as outlined in TABs B and C, and we will provide you with our recommendations either during the Fall (TAB B) or after the first of the year (TAB C).

  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Box 59, Administration’s Policy/General, 8–12/79. No classification marking. Sent for action. A stamped notation indicates that McIntyre signed this memorandum.
  2. Not further identified.
  3. Not found attached.
  4. Not found.
  5. Tabs A–C were not found attached.
  6. Not further identified.