JOHNSON TO SEEK UP TO $10 BILLION MORE FOR VIETNAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP70B00338R000300080011-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 21, 2016
• Document Release Date: October 10, 2006
• Sequence Number: 11
• Publication Date: December 7, 1966
• Content Type: NSPR

Approved For Release 2006/10/10: CIA-RDP70B00338R000300080011-5
ohnson to. Seek:.
up to $10 Billion
% ore for Vietnam
Sum to Supplement Current
_3udget; No Decision Set
On Any Tax-Increase Bid
'igure Is `Best Estimate'
RY a. WALL r?TRCET JocnxAL Staff Reporter
AUSTIN, Texas - President Johnson an-
nounced he expects to ask Congress for an ad-
ditional $9 billion to $10 billion to finance the
Vietnam war in the current fiscal year. But
he emphasized that he still hasn't decided on
whether' to seek an anti-inflationary tax in-
crease.
The determination of the size of the sup-
plemental appropriation needed for the war
has been cited by Administration analysts as
one factor in a White House decision on a tax
Increase. Mr. Johnson, in a news conference
here, said the size of the supplemental, com-
bined with last week's Commerce Department-
Securities and Exchange Commission report in-
dicating a slower rise next year in planned
capital outlays by business, "'gives me help"
on a tax decision.
He said the $9 billion to $10 billion range
for the supplemental request represents the
"best estimate," adding: "We think that's a
safe, reasonably accurate estimate." The Pres-
ident said he didn't think the estimate would
be changed "materially" between now and
early next year when he delivers his State of
the Union Message and budget to Congress.
The supplemental appropriation, Mr. John-
son noted, would bring defense spending for
fiscal 1967, which ends next June 30, to $67
billion to $68 billion. At $67 billion it would
be the biggest defense budget since the $79.8
billion of 1915.
home Loan Banks
In another economic development, the Pres-
ident announced that the Federal Home Loan
Bank Board had informed him that the Home
Loan banks are in a position to increase their
lending to member savings and loan associa-
tions and savings banks by $500 million in
the next few months. These additional funds,
the President noted, would help to "ease the
shortage of money for investment in home
mortgages that has depressed the housing and
construction industry." Mr. Johnson's an-
nouncement didn't reflect any change in the
Home Loan Bank Board's lending policies,
however.
The President announced the supplemental
budget figure after meeting with Defense Sec-
retary McNamara and the Joint Chiefs of
Staff, who flew to Austin to participate in a
Medal of Honor ceremony. The Secretary and
the Joint Chiefs were in general agreement
on the supplemental estimate, Mr. Johnson
said, adding that a few specifics remain to be
resolved. .
Asked if the Administration planned to fi-
nance the Vietnam war in fiscal 1968 by asking
for another supplemental, Mr. Johnson indi-
cated that he would attempt to avoid that
method. Saying that he would review defense
requests on-the basis of "a full year's caera-
tion."
Slice of GNP
eel Lary ttcNzanara, who also attended
ths, bl!1911 , said a determination hadn't yet
run In fiscal 1968, The defense budget, Mr. Mc- ?"-
Nemara said, wouldn't take a "significantly
different part" of the gross national product
in fiscal 1968 than -it had` from fiscal 1961
through fiscal 1963, when military expenditures
were about 8.9o%Q of GNP. This would imply a
defense budget of around $71 billion for the
next fiscal year, since private analysts assume
the GNP in the coming year will be around
$790 billion.
Repeating earlier statements, the Defense
Secretary said there would be a "leveling off"
next year in the rate of buildup and expendi-
tures in Vietnam. The $9 billion to $10 billion
supplemental budget estimate was well within
the $5 billion to $15 billion range that has
been discussed by analysts for several months.
The exact amount of the supplemental, the
President said, will be given in the State of
the Union Message, adding that the estimate
will be "perfected throughout this month and:
any adjustments that can be made will be
made."
The extra $500 million in lendable Home
Loan Bank funds doesn't reflect any change
in the - lending policies of the Federal Home
Loan Bank Board, an official said in Wash-
ington, explaining that it represents the im-
proved position of savings and loan associa-
tions themselves. Since associations haven't
been seeking credit to cover withdrawals as ex-
tensively as had been expected, the district
banks -have morn -money left with which to
-make loans allowing associations to expand
their mortgage lending.
$5D- zts} estu7lao the lend-
ing ' for expansion thi t the ban3 smile
over the next few months ."compared with
what we thought it woukk e,_os_ pi 60 days
ago," an official said. The money isn't to
come from new financing by the bank system,
but results, officials said, from rising repay-
ment by associations of withdrawal advances
combined with reduced demand from associa-
tions for new withdrawal advances.
The banks haven't been able to meet all
requests. for expansion advances lately and
probably won't In the near future either, a
spokesman said. Advances for both purposes
-expansion and withdrawals-at the end of
,October totaled $7.2 billion, up fractionally
from the month-before level and sharply above
the $5.8 billion of a year earlier. Associations
suffered a net loss of $60 million of savings
during October, but this outflow was less than
expected, and industry analysts said it ap.
pears that associations had a net inflow during
November.
Approved For Release 2006/10/10: CIA-RDP70B00338R000300080011-5