DEFENSE PROGRAM REVIEW COMMITTEE JULY 24, 1972

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-301-6-14-5
• Release Decision: RIPLIM
• Original Classification: S
• Document Page Count: 7
• Document Creation Date: January 11, 2017
• Document Release Date: December 18, 2009
• Sequence Number: 14
• Publication Date: July 24, 1972
• Content Type: MISC

No Objection to Declassification in Part 2009/12/18: LOC-HAK-301-6-14-5
DEFENSE PROGRAM REVIEW COMMITTEE
July 24, 1972
Time and Place: 3:09 p. m. - 3:45 p. m. , White House Situation Room
Su} ct: FY 1974-78 Defense Program
Participants:
Chairman Henry. A. Kis singer
State John Irwin
Ronald Spiers
Leon Sloss
Seymour Weiss
Defense Kenneth Rush
Dr. Gardiner Tucker
Robert C. Moot
Vice Adrn. John P. Weinel
Rear Adm. William S. George
OMB Casper Weinberger
Ellis Veatch
ACDA Gerard Smith
Vice Adm. John M. 1.
NSC Philip Ode en
Col. T. C. Pinckney
Lt. Col. George Rieder
John Knubel
James Hackett
25X1
SUMMARY OF CONCLUSIONS
It was agreed that:
ON-FILE NSC RELEASE
INSTRUCTIONS APPLY
--The Department of Defense will prepare a paper for consideration by the
DPRC by early September on the strategic implications of various FY 74-78
programs in terms of general mission categories.
--DOD will be responsible for the details of its budget, once the DPRC has
defined the broad strategic objectives and their budgetary and political impli-
cations.
--The DOD budget for FY 74 should not exceed $84 billion. Consideration
should also be given in its preparation to the President's order to reduce
the proposed federal budget by an overall total of $20 billion, with an empha-
sis on the more efficient use of manpower.
--DOD should review the policy of planning to reinforce NATO to D plus 90
and consider the heavy dependence of NATO strategy on the use of tactical
air power, assuming that it may be rendered less effective than expected by
bad weather. -
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--ACDA will review the DOD budget to consider possible implications
of, either conventional or strategic arms reductions.
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Mr. Kissinger: I called this preliminary meeting to first get the views of the Defense
Department and the OMB and then to have a brief general discussion of the major issues.
(to Mr. Rush) Would you like to begin?
Mr. Rush: We are shooting for a budget of $84 billion for FY 74, with an average of
$86. 2 billion projected for the five year period from '74 to '78. This has been suggested
to the Services and they all have complained about inadequacies at that funding level.
The JCS has suggested a budget of $102 billion as the amount necessary for adequate
national security.
Mr. Weinberger: Well, that has the distinction of being the highest figure I have ever
seen proposed.
Mr. Kissinger: Does the JCS consider $84 billion an imprudent amount for the defense
budget?...,
Adm. Weinel: I would say marginal. It would be prudent in some areas, imprudent in
others and marginal. overall.
Mr. Rush: I wouldn't say it would be imprudent. We are going to review these figures
in det_3.i1 and scrub them down. Then we'll be back in September with a-package that will
run to $84 billion for FY 74 and $861. 2 billion for the five year period. We'believe we can
cut our pr.oj?e-ctions by $400 million as a result of the SALT Agreements and Congress
undoubtedly will make some reduction in the '73 budget which will result in reduced
proposals for '74. However, we may have alternative strategic programs that will
cost more.
Mr. Kissinger: One senator told me he didn't know how many SALT agreements we
could afford.
Mr. Rush: The effect of the Southeast Asia amendment will be to increase DOD spending
by $2. 3 billion, even after reducing it by the savings from SALT. If SEA activity con-
tinues at a high rate, we will also need an additional $450 to $500 million for arms,
ammunition and equipmei The Services also have submitted POMs (Program Objec-
tives Memoranda) for an additional $250 million in urgent items. Another problem is
that our tactical fighter force is aging rapidly. We have hundreds of fighters over ten
years old and some over fifteen years old. We need replacements goon for these
obsolet.eer.t aircraft.
Mr. Kissinger: I like that fighter that can only operate effectively over the desert at
45, 000 feet.
Dr. Tucker: Those are the ones that are over ten years old.
Mr. Rush: We want to keep the age of our fighters under fifteen years. There are a
whole host of modificat?.ons that are underfunded by some $100 million in the FY 74
budget. We want to try to fund these as best we can. Whether the funds we can find
will be adequate for this purpose remains to be seen. I just want to point out that the
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defense budget has been consistently declining as a share of the total budget and
as a share of the GNP. We have taken substantial reductions in recent years.
Since the peak defense budget, we have reduced our personnel by 30%, indus-
trial purchases by 40% and dollar expenditures by $33 billion.
Mr. Kissinger: We know you have done your share. But tell me, what are you
spending all this money on?
Mr. Rush: Increased personnel costs and inflation eat away at everything we
try to do. The cutbacks we have made in the last several years have reduced
defense spending in real terms to the lowest level since 1951. Non-defense
spending has increased rapidly during this same period,
Mr. Kissinger: The lowest since 1951? I suppose you could say the lowest
since 1948. What are the 1951 figures based on?
Mr. Rush: I am talking about real dollars, not inflation dollars. In those terms,
our budget is the lowest:-since 1951.
Mr. Moot: All of the `real increase in our expenditures can be found in the per-
sonnel figures.
Mr. Weinberger: What was the 1951 Defense budget?
Mr. Moot: Something over $13 billion in 1951 dollars."
Mr. Weinberger: It depends on what base year you use for figuring the value of
the dollar.
Mr. Kissinger: When the Defense Department is finished with its explanation
we won't have an ally left in the world.
Dr. Tucker: These figures are only for the DPRC.
Mr. Weinberger: You mean only for the OMB.
Mr. Rush: No, these figures are accurate. While we are reducing our defense
expenditures, our allies are all increasing theirs.
Mr. Kissinger: But they are doing so with inflated marks.
Mr. Rush: No, in dollar equivalents. I'xn talking in terms of dollars.
Mr. Moot: If we use constant dollars, we end up with a figure of about $51
billion, which is what McGovern has been suggesting.
Mr.Kissin'er: That's probably what he will say he meant all along; that he was
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-SI:Ch , a.
talking in terms of constant dollars.
I would like to ask at this point the basic question of how we can best handle
this matter. I know that the Services would prefer to argue the Defense budget
out among themselves. They have had some bad experiences with systems
analysts telling them what to do and their concern is justified. However, I
am afraid that if that course is followed we will have a program-presented
to us in September that will be worked out in detail and we will be stuck with
it, whether or not it is responsive to our overall -strategic objectives. NATO
is a case in point. We have been talking about reinforcing to D plus 90, while
studies show that the allies cannot fight for more than thirty days. This
NATO concept of reinforcing over a period of 90 days is conveninrAt
because it gives us a cushion of forces for other purposes as well. Another
issue is the dependence of our strategy on effective utilization of air power.
In readit!g these situation reports from Vietnam day after day I am constantly
struck by the number.of,,days our tactical air power cannot operate fully
or effectively in Vietnam because of poor weather conditions. What does
that mean for our.European-strategy? Have we fully considered the :number
of days of bad weather in -central Europe? I am not concerned here about the
details of numbers. The number of cruisers versus the number of destroyers
in the fleet, or whether an Army of 11 2/3 divisions or 11 1/3 divisions is most
appropriate to our needs, are matters for you (Defense) to decide. That is
not our role here. What we want to do is determine the overall strategic
objectives and then let you (Defense) Shape the forces you require'to perform
the role that is decided upon.
Mr. Rush: We don't have a budget prepared as yet. We are working on it.
Mr. Kissinger: We don't want your budget now. What we want to do is discuss
alternate strategies and then decide which to follow. I prefer to avoid the ob-
fuscating details of the DOD budget and to keep out of nitpicking your proposals.
I would like to lay out a work program today.
Dr. David: (to Mr. Kissinger) How does R & D fit into your picture of the
Defense budget?
Mr. Kissinger: What do you have in mind?
Dr. David; R & D is a special category. It represents only 10% of the budget,
but it has implications for the future composition of our strategic forces, for
example.
Mr. Kissinger: I want to get our strategies clearly in mind before we go into
budget details.
Dr. David: That's fine. That's just what I was driving at.
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Mr. Kissinger: Cap (Weinberger), would you like to give us your thoughts?
Mr. Weinberger: I'll preface my comments by repeating what I've said
before, that none of this urban crap that seems to be so popular is goingto
do any good if our borders are not secure. Now having said that, I will also
say that I can't encourage anyone to pursue a Defense budget of $102 billion.
The President has made it very clear that he wants to avoid new taxation
and anything that mi ght get us into a situation like that of the mid--60's, when
we tried to fight a/wh1~.e continuing domestic spending unchecked and without
new taxation,; which of course produced inflation, It now looks as though
the federal budget for FY 74 might show a deficit of $20 to $30 billion. The
President feels that would be inflationary and he wants to bring it_down by
$20 billion. This will require reductions across the board. I know you
(Defense) have taken cuts in recent years and we now plan to cut the domestic
portion of the budget. But a reduction of the magnitude of $20 billion will
necessarily require some cuts..in-defense spending. So I suggest that you
consider this requirement in your budget planning, which means that some
portion of that cut will have to come out of your -$84 billion. We have to got
the budget back up to,a:,fu1l rxrrp neat balance.
Mr. Kissinger: I thought"the full?ernp1Dyment:deficit theory was ingenious.
Now you're retreating from it and talking of a full employment balance..
Mr. Weinberger: It was a good theory, but now we have to~turn the deficit
around before we get-into either a new round of inflation or new taxes; neither
of which is acceptable to the President. We will be pleased to work with the
agencies to help review their budgets and suggest ways the necessary re-
ductions can be made. without endangering our borders.
Mr. Kissinger: What about the borders of our allies?
Mr. Weinberger: We include them, too. We are also looking to see what cuts
can be made in the domestic budget. I just had a long discussion about this
with George (Shultz), who doesn't think it can be done. But the President is
determined and has told us to do it. I know Defense has already made cuts,
but the personnel costs are so high now that you must seek new reductions in
manpower. We must have more efficient use of our expensive manpower; this
is where we can save money. I know it would be easy if we could all agree on
a budget of $102 billion and then go home.
Mr. Kissinger: They'll take $90 billion.
Mr. Rush: We'll take $84 billion.
Mr. Kissinger: (to Mr. Weinberger) See, you've won already.
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They've come down from $102 'billion to $84 billion. Gerry (Smith), are there
any aspects of arms limitations proposals or possibilities that we should con-
sider in this review?
Amb. Smith: I think I'll just stay out of this.
Mr. Kissinger: I'm serious. We must consider these factors. (to Mr. Rush)
Gerry should have an opportunity to review the specifics of your proposals to
consider the implications for the budget of any -arms reductions, conventional
as well as strategic. Would you send him an advance copy of your budget proposals?
Mr. Rush: O. K.
Mr. Kissinger: (to Mr. Irwin) Do you have any comment?
Mr. Irwin: We have a number of general questions, but this is not the time to
raise them.
f
Mr. Kissinger: (to Mr. Rush) Well, why don't you go ahead and prepare a
budget outline in terms of general categories ahd the strategic implications of
various programs, rather than in terms of specific weapons, for our considera-
tion. Can you have it ready by early September?
Mr. Rush: Yes, we'll- have it ready by then.
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