CHARACTERIZATION AND GIST OF SECRETARY OF DEFENSE STATEMENT BEFORE THE SENATE ARMED SERVICES COMMITTEE ON THE FY-72 DEFENSE BUDGET AND FY72-76 PROGRAM DATED 15 MARCH 1971

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00681R000100010003-8
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 19, 2016
• Document Release Date: October 25, 2005
• Sequence Number: 3
• Publication Date: March 22, 1971
• Content Type: MFR

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22 March 1971
MEMORANDUM FOR THE RECORD
SUBJECT: Characterization and Gist of Secretary of Defense
Statement before the Senate Armed Services
Committee on the FY-72 Defense Budget and
FY72-76 Program dated 15 March 1971
1., Secretary Laird makes extensive use of DOD "Secret"
intelligence holdings in his 20-page discussion of "Threats to the
Free World Security" (starting on page 62) and includes 10 tables
at the end of the text detailing DOD estimates of the strategic and
tactical force threats from the USSR, Communist China, Warsaw
Pack countries, and the Communist forces in the Middle East and
in South East Asia. A quick comparison with NIE-11-8-71 indicates
some deferences in details.
2. The 258-page statement is atypical for the occasion because
of the approach used. It summarizes the "new" DOD strategy of
"Realistic Deterrence" which results from a case study of the
changing international and domestic scenes in the historical per-
spectives of the Eisenhower (1953-1960) and Kennedy-Johnson ('1961-
1968) defense strategies. The statement is set forth in four parts:
a. The Secretary's Summary - 13 pages
b. Section I: Toward a Strategy of Realistic
Deterrence - 157 pages
c. Section II: Toward Better Management of Human,
Material and Economic Resources in the DOD -
64 pages
d. Charts and Tables - 26 pages
3. The intelligence function is discussed only once in a 3-page
sub-head in Section II (reproduced at annex hereto). Here it states
urjjs&T
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that "As a consequence of currently-exercised compartmentalization
of intelligence activities, it too often is very difficult to obtain net
assessments of our relative military posture, particularly in technical
areas. This deficiency seriously detracts from our long-range plan-
ning capabilities. To partially correct this situation, I have established
a net technical assessment group. . . in The Office of the Director,
Defense Research and Engineering.... " Going on, the Secretary further
states "It is my present intention to create a special long-range planning
group, reporting directly to me, to make long-range studies based as
a beginning point on the assessment which I receive from the net
assessments group. The establishment of both the net assessment
group and the long-range planning group was recommended by the
Blue Ribbon Defense Panel.... These new groups will provide an
additional tool enabling me to utilize more effectively the institutional
assessments and planning which I receive. "
4. The Secretary states that "we believe that significant
improvements have been made in the management of the intelligence
activities of the Department. I am not satisfied, however, that we
have, by any means, done everything that needs to be done in this
area.... " He then mentions the actions already taken and previously
announced concerning civilian direction and management of investigative
and related counter-intelligence activities in all of the Services.
5. The Secretary makes deliberate use of statements by the
President on Foreign policy. He does this by keying his statements
throughout the text to particular quotes.
i
6. The following excerpts indicate the substance and scope of
the Secretary's statement:
a. From the Summary:
--"I am privileged today to present the first comprehensive Five-
Year Defense grogram of the Nixon Administration, and to
discuss the associated FY 1972 Budget. " - pg. 1
--"This 1972 Defense Report to Congress and the American people
contains a Five-Year -Defense Program which spells out a
new National Security Strategy of Realistic Deterrence. This
new strategy is designed to prevent wars by furthering the
President's goal of building a viable structure of peace based
on adequate strength, true partnership, and meaningful
negotiations. " - pg. 1
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--"Past policy was responsive and reactive. Our new Strategy
is op sitiwe and awe, " - pg. 2
--"We have completed our basic reviews and have made our
fundamental decisions on what needs to be done. " - pg. 5
--"This report describes the major changes which have been made
and which will be made in such areas as defense strategy,
the defense budget, research and development, command and
control, intelligence, procurement and, most importantly,
the need to revamp our concepts about the recruitment and
use of military manpower -- both in active, National Guard
and Reserve forces. " - pg. 5
propose... the creation of an additional Deputy Secretary of
Defense in order to enhance high level civilian management
and to cope with the severe time demands now placed upon
the single Deputy Secretary of Defense, David Packard. I
also recommend creation of two additional positions for
Assistant Secretary of Defense. " - pg. 9
-"Our examination into the intelligence activities' of the Department
/ of Defense will continue, and further change's may be anticipated. " -
pg. 9
b. From Section I - Toward a Strategy of Realistic
Deterrence:
--"One problem was that national security policies during the past
decade did not focus sufficiently on lowering the probability
of all forms of war through deterrence of aggressors. The
effect of these policies on military planning was to create
forces that lowered the probability of nuclear war while
stressing a growing U. S. military capability to engage and
to fight in othc,r types of conflict.
That this military capability proved not to be an effective
deterrent was due to a second major problem in national
security planning. This was the failure to correlate closely
and fully military strategy, national security strategy, and
foreign policy, which embrace all elements of effective
deterrence -- non-military as well as military. ", pg. 8-9.
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--"At least seven factors, taken together, indicate that the
economic, political, military, and manpower" realities existing
now are significantly different from the situation just five
years ago. These factors are:
-- A growing Soviet military capability and technological
momentum.
--.An expanding Soviet influence around the world, as
evidenced by worldwide deployment of its growing
naval forces.
/ -- An emerging Chinese Communist nuclear threat.
Y
-- The reordering of national priorities, with a reduced
percentage of Gross National Product for defense
spending.
-- Sharply rising U. S. personnel costs and a start toward
Zero-Draft and an All-Volunteer military force,
-- A changing world economic environment because of
vigorous growth, particularly among Free World
nations.
-- An increasing awareness among NATO members of the
need for burden sharing and among many of our Asian
friends of the need for regional support. " - pgs. 18-19
--"We chose in 1970 to break the cycle of submitting a five-year
defense plan to Congress in order to permit time for a save
and orderly transition from the national security policies of
the past decade to those more appropriate for the decade
of the 1970's and beyond. " - pg. Z2
-- "Among the elements distinguishing the FY 1971 plan from the
previous strategy were:
-- a concept of strategic sufficiency which is based on
specific criteria for the design of our strategic
capabilities.
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-- a strong conventional capability buttressed by increased
burden sharing and improved defense capabilities of
other Free World nations;
-- adequate peacetime general purpose forces for simul-
taneously meeting a major Communist attack in either
Europe or Asian, assisting allies against non-Chinese
threats in Asia, and contending with a contingency
elsewhere;
-- smaller U. S. active forces, with great emphasis to be
given to their readiness and effectiveness, including
modernization;
Y
-- a re-emphasis on maintaining and using our technological
superiority;
-- increased international security assistance for the
defense needs and roles of other Free World nations;
and
a new approach to U. S. military manpower, based on a
goal of Zero Draft and an All-Volunteer active force,
with increased reliance on National Guard and Reserve
forces. " - pgs. 22-23
--"By providing strong, effective and survivable strategic forces,
reliable and effective intelligence and command and control,
and other necessary capabilities in our strategic posture,
we seek to convince potential opponents that recourse to the
holocaust of general nuclear war will continue to be an
irrational and unsuccessful option. " - pgs. 31-32
--"Our activities in Ipdochina during the past year and in the
forthcoming year should be measured and evaluated in
relation to goals which have guided this Administration
since the beginning of Vietnamization:
-- Maintaining our obligations and interests in Asia as
we move toward a generation of peace;
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-- Reducing American casualties;
-- Continuing the reduction of Americans from all of
Southeast Asia;
-- Turning over, military responsibility to the South
Vietnamese in a way that provides South Vietnam
with its own defense against aggression;
-- Implementing the Nixon Doctrine effectively. IT - pgs. 35-36
--"In our ability to control the seas and project our forces abroad,
we are:
-- Pursuing a broad program in the area of ocean surveillance.
using satellites, manned aircraft, and surface and under-
water sensor systems. " - pg. 55
--"In the area of land warfare, we are:
-- Proceeding to develop less vulnerable helicopters with
better surveillance capability.
-- Increasing our efforts to provide our forces with the
capability to locate and identify a wide range of hostile
radar targets with sufficient confidence to attack and
destroy them without subjecting our aircraft to the
dangers in4 rent in visual target identification. pgs. 56-57
-- "However, there is evidence that the apparent slowdown may
be related to initiation of a modified or new ICBM deployment.
Admiral Moorer will discuss this evidence in more detail.... _
We will, of course, be examining the situation carefully in
order to get more precise indications of where they are. headed. " -
pgs. ?63-64
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--"In the most recent Defense Intelligence projection for planning
a range of possible Soviet intercontinental nuclear attack
forces has been projected for years beyond 1972,
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--"The present threat to Thailand is primarily one of insurgency.
Although the insurgency continues to expand, it is not yet con-
f sidered a serious threat to the internal statility of the Royal
Thai Government. This assessment was given me by Thai
officials during my recent visit there, pg,. 79
--"We do not have precise and complete data or means of measuring
and estimating Communist military aid programs, but the
information we have does indicate their overall magnitude
and direction. We have not included economic assistance,
which can, in some cases, be as effective as military assistance,
and which we believe is substantial. pg. 80
--"Our current best estimates are that military aid among Communist
countries approximated $15 billion in the 1955-1970 period, with
more than 85 percent provided by the Soviet Union. " - pg. 80
--"Since 1968, the Soy'iet RDT&E budget has increased at 10 percent
to 13 percent per year, while that of the U. S. has remained
essentially constant. Our estimates indicate that the Soviets
are now spending, in 1968 equivalent dollars, some $3 billion
more annually on military and space research and development
than we do. The Soviet level of military and space technological
effort appears to be significantly larger than that of the U. S. " -
pg. 84 ,
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--"We continue to believe that an effective defense of our population
against a major Soviet attack is not now feasible. Thus, we
must continue to rely on our strategic offensive forces to
deter a Soviet nuclear attack on our cities. " - pg. 93
--"We plan our general purpose forces in peacetime to be adequate
for simultaneously meeting together with our allies a major
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sia, and contending with a
minor contingency elsewhere. In planning our capabilities,
we maintain the full range of air, sea, and ground forces
needed to-meet our planning goals. " - pg. 112
--"With regard to U, S. force capabilities in Asia, we do not plan
for the long term to maintain separate large U. S. ground combat
forces specifically oriented just to this theater, but we do intend
to maintain strong air, naval and support capabilities. " - pg. 112
c. From Section II - Toward Better Management of Human,
Material and Economic Resources in the DOD.
--'.'It is important, however, because under the Nixon Doctrine, as
exemplified by the Vietnamization Program, we believe that
our allies can and must increasingly bear the primary burden
for planning to cope with sub-theater and localized conflicts.
However, as we move in this direction under President Nixon's
Strategy for Peace, there may be situations where only U. S.
capabilities would provide the flexibility of action which may be
necessary in the future. " - pg. 162
--"We would hope to structure our security assistance funding to
contribute to regional security arrangements. "
--"We have adopted, as I said a year ago, a concept of management
that is based on participator decision-making, defined
decentralization and dele ation of aut on unner specific
guidance. Our aim is to improve both the decision-ma ing
process and also other management activity by lacing more
emphasis on people and less emphasis on elaborate procedures.
pg. 170 . .
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--''We firmly believe that management will be improved by selective
decentralization. An essential part of this process is to give
the Military Departments a larger role in making the decisions
that affect them; " - pg. 171
--"In implementing qur new management concepts we have deliberately
chosen to use an orderly, sequential, step-by-step approach
instead of attempting to make comprehensive adjustments
all at once. " - pg. 174
-- "We concur in general with the Panel's objectives; however, we are
seeking to avoid the tendencies toward increased staffing and
overhead which we believe to be inherent in many of the specific
Panel recommendations. Some of the Panel's recommendations
already have been approved; others still are under consideration. " -
pg. 175
-- "I do not believe it would be appropriate to limit flexibility by
designating specific areas of such concentration and responsibility
in legislation, but I would envision an agreement between the
Secretary and the two deputies on their respective areas of
responsibility based on the wishes of the Secretary and the
particular expertise of individual deputies. " - pg. 176
-- "I am not now recommending and do not intend to recommend that
the Office of the Secretary of Defense be functionally organized
exactly as outlined in the, detailed recommendations of the Blue
Ribbon Defense Panel. " - pg. 177
--"As I described it last year in our revised system I issue detailed
strategy and fiscal guidance based on guidance from the 1 ~: sident.
The JCS and the Military Departments then proceed with force
planning based on this guidance. We place much greater reliance
on the Military,,Departments and JCS than was the case in the
previous Administration, and this year's work in preparing the
FY 1972-76 Program and the FY 1972 Budget is an example
of that reliance.
Uncertainties about the fiscal situation, however, caused us
to deviate somewhat from the exact programming process
planned a year ago. " - pg. 178
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--"We have found that, of the some 1, 227 DoD Directives examined,
435 of them could be cancelled because they generate work
that is unnecessary, Another 354 directives are being simpli-
fied and modified, and only 438, or 35% of all the directives,
were found to be in satisfactory shape. " - pg. 179
"Another example of the type of management improvements we are
undertaking is establishment of a separate program budget
element for all public affairs activities in the Department. " -
N. 181
--"We have concluded that the present Unified Command Structure,
together with the distribution of responsibilities among the
various commands; does not represent the most effective
organization of U. S. combatant forces in support of national
policies, nor is it the most effective arrangement for the
deployment of U. S. forces to meet likely contingencies. We
plan to make recommendations to the President regarding
some modifications to the Unified Command Structure. " - pg. 187
--"At present, Defense Department participation in the Security
Assistance Program is somewhat fragmented.
In recognition of the increased importance of Security
Assistance programs, we are conducting within the Administra-
tion a comprehensive study of the procedures and organization
for the planning and administration of the military assistance
and foreign military sales programs -- including military ,
assistance which is Service funded for three Southeast Asian
countries.
Based on the results of this study, and on our own concurrent
review within the Department of Defense, we expect to be able
to revamp thoroughly our procedures, .... " - pg. 188
... all new programs have proper milestones. These milestone
checkpoints will be set up at least at the following stages: the
beginning of major effort in advanced development, the start
of full-scale development; and the time when production of the
system is authorized. Pr:cjects will not proceed beyond these
milestones until they are fully ready to?do so. " - pgs. 192-193
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-- ... requires that we select more capable project managers and
staffs and leave them on the job long enough for them to
be effective.... Finally, we must clarify the project managers'
responsibility so they are not just errand boys for already over-
burdened higher staff echelons. " - pg. 193
--"We have come to t'he conclusion that total package procurement
contracts are simply not a practical way to handle important
new weapons system development and acquisition programs,
--"I want to stress that under our participatory approach to management,
the responsibility for managing a program rests with one of the
Services, nevertheless, the Office of the Secretary of Defense
(OSD)'will remain responsible for seeing that a project is
administered in accordance with established policy guidelines.
pg. 194
--"The National Guard and Reserve will take on increasing responsibilities
and will be used initially to augment active forces should the need
arise, reversing the past policy of relying primarily on the draft.
Activation of standby draft authority will follow Guard and Reserve
call-ups, if necessary. "'
--"From the beginning of FY 1969 to the end of FY 1972, the total
reduction in active military personnel will be 1, 042, 000 or about
30 percent. The number of men and women in the active forces
at the end of FY 1972 -- 2, 505, 000 -- will be well below the pre-
Vietnam figure of 2, 687, 000 at the end of FY 1964 and below any
year-end strength level since FY 1961. In short, we face the
task of doing a better job with fewer people and that is why we
are going to give a new accent to quality both in the active
National Guard and Reserve Forces instead of relying on
quantity. " - pg. 198
--"By July 1, 1973 we'are hopeful that draft calls can be ended as we
stabilize at peacetime force levels and as our programs for
attracting volunteers take hold. " - pg, 209
--"As I explained in earlier sections, our new strategy is based on
my belief as Secretary of Defense that we can perform essential
defense functions with a restructured U.S. military force that,
in peacetime, requires no more than about seven .percent of
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of GNP or less and is made up of no more than'about 2. 5
million volunteers. Within these rough guidelines, we
want to maintain a peacetime "baseline" force structure
that with our allies will be sufficient to deter war by
confronting potential aggressors with strong and effective
fighting forces. ;,' - pg. 220
--"It is useful to view FY 1972 as the year when we return our
budget and manpower levels to those that prevailed prior to the
Vietnam war. " - pg. 221
--"The FY 1972 program is about 24% below the wartime peak of
FY 1968. " - pg. 221
--"The FY 1972 Budget reflects a continuation of President Nixon's
program for reordering priorities -- this has produced
major cuts in the money and manpower allocated to Defense,
with these reductions (plus all economic growth) allocated to
the civilian sector. " - pg. 222
--"The sharp cutbacks in Defense programs over the past two
years have obviously had a major bearing upon the performance
of the economy, and have contributed to the sharp rise in
unemployment. The sharpest of these cuts are now behind
us and the future impact of defense cutbacks will be much
more gradual. This fact, coupled with other developments,
produces a more favorable employment outlook. " - pg. 222
-- From June 1968 to June 1972, we are reducing military
personnel by 1, 042, 000 and civilians by 205, 000 -- a
total manpower cut of 1, 247, 000.
-- However, from FY 1968 to FY 1972, our payroll -- military
basic pay and civilian salaries -- rises by $4. 8 billion.
--.In addition, payments to retired military personnel rise
by $1. 7 billion from FY 1968 to FY 1972, and the FY 1972
spending estimates include $1. 4 billion for the Volunteer
Force.
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-- All told, then, these pay items rise by $7. 9 billion while"' ' - ,
we are decreasing manpower by nearly 1..25 million, pg. 223
--"The shift in our priorities, away from defense and to civilian
pursuits, has been massive. The size and price of this
change is not generally appreciated. pg. 228
--"The change in the FY 1968 to FY 1972 period is especially
significant. Defense spending drops by $23. 9 billion, while
other federal spending grows by $36. 4 billion. This means
that two-thirds of the real increase in civilian spending can
be viewed as having been financed by defense cutbacks.
Civilian programs are increasing by $36. 4 billion, while the
federal budget total (in real terms) increases by about one-
third of that amount. " - pg. 229
Distribution:
Orig - D/PPB, MICS (file)
. 1 - PPB reading
1 -
1-
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Attachment
Copy
Pgs. 183-186
Ill. Intelligence
In my Defense Report of last year I advised you that I had
appointed the Assistant Secretary of Defense (Administration) as
my special assistant for intelligence, and that I charged him with
the responsibility for reviewing the Department's intelligence pro-
grams. During the year he has worked very closely with those
responsible for the numerous intelligence activities in the Depart-
ment. In doing this, he has been able to improve the coordination
and communication among the various intelligence activities. He
has been able to bring together at one point a picture of the overall
resources allocated to the intelligence function. This process has
made it possible to get a better picture of the funds being spent
throughout the Department on Intelligence, and to evaluate the
budgetary decisions with a better understanding of their impact on
the quality, as well as the level, of these intelligence activities.
This move has enabled us to focus better on the performance
of the specific intelligence organizations, DIA, NSA, and some of
the in-service activities, and we believe that significant improve-
ments have been made in the management of the intelligence activities
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of the Department. I am not satisfied, however, that we have, by
any means, done everything that needs to be done in this area, and
during the coming year I will be looking not only at a continuation
of the effort which we now have underway, but also for ways to
make further improvements in the management of Department of De-
fense Intelligence programs,
During the year it has become evident that there has been
11
considerable confusion between military intelligence activities
and organization on the one hand and investigative and related
counter-intelligence activities on the other. Accordingly in Feb-
ruary of this year, we made a new delegation of responsibility
which we believe will bring these investigative and related counter-
intelligence activities under better control.
I have delegated to the Assistant Secretary of Defense (Adminis-
tration) the authority and responsibility to direct and manage for me
investigative and related counter-intelligence activities in all of
the Services. To assist him, I have created a Defense Investigative
Review Council of Which the Assistant Secretary of Defense
(Administration) is Chairman. Other members are the'General
Counsel of the Department of Defense, the Under Secretaries of
the Milital y Departments, 'and the Director of the Defense Intelli-
gence. Agency. At the same time, we have formulated and
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promulgated a comprehensive policy for all Department of Defense
investigative and related.counter -intelligence activities. This
represents a centralization of high-level civilian authority over
such activities -- a centralization of supervision which experience
has demonstrated was needed.
There is a second area related to intelligence in which we will
shortly make additional changes.
41
As a consequence of currently-exercised compartmentalization
of intelligence activities, it too often is very difficult to obtain
net assessments of our relative military posture, particularly in
technical areas. This deficiency seriously detracts from our long-
range planning capabilities.
To partially correct this situation, I have established a net
technical assessment group. This group is located in the Office
of the Director, Defense Research and Engineering, and it has the
responsibility for bringing together both intelligence and research
and development specialists from within the Department and as
needed for special expertise from outside the Department. The
first assignment of this new net technical assessment group was to
assess the characteristics and capabilities of one of the Soviet surface-
to-air missiles. The first assignment to this group resulted in
one of the best products I have seen. I am confident that the
3
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work of this new group will put our long-range planning for neW
weapons and new tactics on a much improved foundation.
It is my present intention to create a special long-range
planning group, reporting directly to me, to make long-range
studies based as a beginning point on the assessment which I
receive from the net assessments group.
The establishment of both the net assessment group and the
long-range planning group was recommended by the Blue Ribbon Defense
Panel.
In creating these groups, it is not my intention to supplant
previously existing assessment and planning capabilities. On the
contrary, these new groups will provide an addit..i nal tool, enabling
me to utilize more effectively the institutional assessments and
planning which I receive. "
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