JOURNAL - OFFICE OF LEGISLATIVE COUNSEL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP73B00296R000100040041-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 19, 2016
• Document Release Date: July 20, 2006
• Sequence Number: 41
• Publication Date: April 14, 1971
• Content Type: NOTES

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Journal - Office of Legislative Counsel Page 3
Wednesday - 14 April 1971
11. Delivered to Mr. William Sullivan,
in the office of Senator Bob Dole (R. Kans. ), a series of supplements to
the daily report - Soviet Union which were not included in the daily reports
forwarded to the Senator's office over the last ten days. I suggested to
Mr. Sullivan that in the future any questions on the material or whatever
should be referred to me rather than attempting to locate the individual
clerks or staff personnel within the Agency who might be involved in
forwarding such material to the Hill.
12 Met with Mr. Ralph Preston, House Approatios
Committee staff, and gave him a copy of the Soviet Union daily report
supplement 71-67-22 and comments on the 7 April New York Times column
on Soviet defense costs.
In discussion Mr. Preston told me that he met with Chairman
Mahon late yesterday afternoon and briefed him on yesterday's meeting on
the Agency budget. See Memorandum for the Record.
cc:
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0/DDCI
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Mr. Goodwin
Mr. Houston
DDI
DDS
DDS&T
EA/DDP
OPPB
Item # 5 -
Item #11 -
JOHN M. MAURY
_Jegislative Counsel,
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Kosygin's statement regarding defense spendi
merely reports the Soviet announced defense budget
data of about 80 billion rubles for 1966-70. Our
estimates?which include spending for R&D and space
programs amount to 113 billion rubles for the same
period. Without the full text it is difficult to
evaluate Kosygin's comments on national income, but
-7/
the New York Times atricle does make the old error of
stating that the Soviet defense budget "burden" is
twice that of the US. This arises when the share
of GNP is calculated in dollars which distorts the
internal Soviet price relationships. When calculated
in rubles, the share of Soviet GNP allocated to
defense is about 7 percent, roughly that of the US.
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8 April 1971
MEMORANDUM FOR: Deputy Director for Intelligence
SUBJECT
New York Times Article on Soviet Defense
Spending
1. The front page story on Soviet defense spending
in the New York Times, is hardly a "disclosure" as
claimed by Ted Shabad. In discussing budget allocations
over the last five years, 1966-70, Soviet Premier Nosygin
yesterday announced that a total of 80 billion rubles
($88 billion of the official exchange rate) had gone
for defense purposes. This is the total of announced
Soviet defense spending, exclusive of the research and
development portion carried in the allocation for science.
2. Shabad gets into the complicated question of
the relative burden of US versus Soviet defense ex-
penditures on the two economies. He does this in a
very simplistic fashion -- the overall ratio of defense
outlays to GNP, implicitly in dollars. However, "burden"
cannot be very meaningfully measured in this way. The
relative efficiencies of producing various types of
goods must be taken into account, which Shabad does not
do.
3. Our impression of Kosygin's presentation of
the allocation question is that once again a careful
balance is being made between the pressures from the
Soviet defense establishment and the need to appease
the Soviet consumer. The process of dealing ad hoc
with overcommitments will almost certainly continue in
the next plan period.
irec or
Economic Researc
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itt.4.1?304.%\o'PS C4.1' .1:1 CIS )1,461.' .d) ,a*d":i".1"
eat international situation," Mr.
THE ODORE SHABAD
Kosygin said, "must be stead-
. MOSCOW, April so. lastly concerned with strength-
Viet Union disclosed today that ening of the country's defense
1ti--iiiifiie-e--37-e-ifieblisli-ei-e-ee-wee capability. Over the last five
elegi5izgen:g--erifiThi'..ii-Te-eTal: years .80 -billion rubles [1'p88.0-
o all_the_luncIsLavailable_effir billion at the official exchange
the_gow0AL. Or thee_ Jatiefs rate; has been spent idi de-
r ;
ectmoiny fense."
e
'13teefigeee. itsellwaseloteeew,
for it repeesented the total bud-
get allocations in _eal etee7eLlee
the mainteacmge_efemiljeepe_per-
,
, .
'NEWS INDEX:-.
This unusual information on
?
Premiertheb iiien ltlailAnvilatesu :ro containedf- fi ee.
pura-slied text of an economic
fojrikifv_e reel_y_es_terel V .by
fore the current congress of the
Soviet, Communist party.
It appeared to be one of the
mosorthrhta?nfted
most 'forthright.' acknowledg-
tkeP91Lcer_eke_Leff__Leefeethe
maintenance of the' country's
armed .forces.k ,1!-2.?;:e
? :
"The Soviet ?state in/ the pets-
Art .. .
Cooks j. 43
Bridge ? 44
Business 71
Chess ? ? 44
Crossword . ; 43
Obituaries '42
Op?Ed ' 41
Society .? 50
Sports ' 51.55
Theaters .......'' 32-3'?
Transportation 74
Editorials .. TV and Radio ? ..75
Financial .. 57-72 U. N. Proceedings.. 5
Man in the News. ?20 WashIngt.on Record .27
; .32-37 Weather'
Music.;?...32-37 Women's News 49
? News Sunnhary and Index, Page 39
eettleetteceepetecenement
oll_iclalansesysteres. ? -
1,11e_g_tf-',_e_Q.DICeleeefee
t)e
119717?i3.k. 21) -1-
at de-
the
activities absorbed .24.4
per, cent of the portion of na-
gro.ai-- Purposes, or 7 per centti5T5"-15-qfflif615.1.air c
orieHa1aii-6aTTrIc5In7e.
science,If expenditures for
amounting to 3?yes cent of.
national- income, i'vere
in-
eluded in ,the defense share, it-
wouTd-rTs6--1;5711 ler?Enf.-of
This
roughly with estimates ot
Western, analysts, who -hold
that a large proportlon of
Sovi-t scien'T'ic ereseerel'
11111 A.111. is s go. a
Soviet Union is general-
Continued on Page 4,Colemo. 4 i(
Soviet Discloses Extent of Defense Costs ,
Continued From Pagel, Col. 4
ly assumed to shoulder defense
expenditures roughly equiva-
lent to those .of the United
States, However, because the
Soviet Union's gross national
product is only about half that
of the United States, the share
of the military-oriented sector
of the Soviet economy is about
twice as large as the share of
the defense establishment 4n
the American economy.
Mr. ?Kosygin's disclosure,
made in the context of new
national income statistics, ap-
peered to be part of an effort
by the Soviet leadership to
justify the current economic
policy of a. better deal for the
consumer combined with con-
tinued emphasis on heavy in-
dustry and defense. ?
Leonid L ?Brezhnev, the par-
ty leader, appeared to go out
of his way in lids keynote
speech to the congress last
week in affirming that
increased attention to consu-
mer welfare in the new five-
year plan "does not mean that
we are slackening our concern
for heavy, industry," which is
the basis of the defense effort.
Mr. Brezhnev and Mr. 1