Eisenhower Library, Eisenhower papers, Whitman file
No. 300
Memorandum of Discussion at the 227th
Meeting of the National Security Council, Friday, December 3,
19841
eyes only
The following were present at the 227th meeting of the National Security Council: The President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; the Director, Foreign Operations Administration; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Chairman, Council of Economic Advisers (for Item 2); Assistant Secretary of Defense McNeil (for Item 2); Assistant Secretary of Defense Hensel (for Item 2); the Secretary of the Army (for Item 2); the Secretary of the Navy (for Item 2); the Acting Secretary of the Air Force (for Item 2); the Deputy Director, FOA (for Item 2); the Deputy Director, Bureau of the Budget (for Item 2); Mr. John H. Ohly, FOA (for Item 2); the Chairman, Joint Chiefs of Staff; the Chief of Staff, U.S. Army; the Acting Chief of Naval Operations (for Item 2); the Chief of Staff, U.S. Air Force (for Item 2); the Commandant, U.S. Marine Corps (for Item 2); the Director of Central Intelligence; Robert Cutler, Special Assistant to the President; the Deputy Assistant to the President; the White House Staff Secretary (for Item 2); the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.
There follows a summary of the discussion at the meeting and the main points taken.
[Here follows discussion of agenda item 1, “Review of Basic National Security Policy”.]
2. FY 1956 Budget Considerations (Memo for NSC from Executive Secretary, same subject, dated December 3, 1954;2 NSC 5422/2;3 NSC Action No. 12784)
Mr. Cutler called on Admiral Radford to read his report on the recommendations of the Joint Chiefs of Staff regarding personnel [Page 632] strengths and major force and manning levels for FY 1956. Admiral Radford’s report (copy filed in the minutes of the meeting) indicated that these levels would remain at about the same point as in the current fiscal year, with a total of 3,045,000.
Assistant Secretary of Defense McNeil then made an oral presentation on the status of estimated expenditures and new obligational authority for the military program during FY 1956. He made use of a chart entitled “Department of Defense Expenditures for Military Functions Since Korea, Fiscal Years 1951–1956” (copy filed in the minutes of the meeting).
At the conclusion of Secretary McNeil’s presentation, the President asked him what mechanism existed in the Defense Department for assuring a reexamination of all these housekeeping matters, and how effective was it?
Secretary McNeil replied that the mechanism was not as satisfactory as it should be. Much of this work had to be done by the individual Services. As for the Office of the Secretary of Defense, that function comprised a substantial portion of the total duty of the OSD.
The President went said he on to say that when he had been Chief of Staff he had been able to find very little time for such matters, and he therefore wondered how effective the searching-out process now was. For example, was the decision as to military manning levels strictly a Service decision?
Secretary McNeil answered that the manning levels were initially based on the recommendations of the Joint Chiefs of Staff. With regard to civilian personnel, these levels were examined by the Office of the Secretary of Defense and the decisions were made on civilian levels at the time that the budget estimates were prepared. This system had been established only last year. It was not perfect, but it was improving notably.
Secretary Wilson explained in somewhat greater detail the process of reaching decisions on manning levels for the armed forces and on manpower utilization generally. The mechanism in the Office of the Secretary of Defense was designed to work with the Services and to point out to them where they could make savings. The various Assistant Secretaries who had oversight of this job were, of course, not very popular with the Services. Secretary McNeil himself was not very popular with them, but the only way to get down costs was to keep on probing, questioning, and suggesting. Requests for obligational authority, continued Secretary Wilson, were also affected by what Congress did. Congressional action often required another mark-down of the force levels which the Defense Department thought desirable. Secretary Wilson said [Page 633] that the Congress ordinarily cut the Defense Department requests for appropriations by about $1 billion in each fiscal year.
The President then said he wished to comment about the “new programs” to which Secretary Wilson had referred. He said he hated the term “fringe benefits”, but these were programs that the Council could count on his supporting, with the exception of a general military pay increase, about which he was less sure. However, the programs for housing, medical care, retired pay, and especially survivor benefits, were fine programs.
Dr. Flemming inquired of Secretary McNeil relative to the status of the mobilization base. Were these programs reflected in the figures to be attained by July 1, 1957? Secretary McNeil replied that all these programs were included in the high figure, but not all in the low figure.
Mr. Cutler then called on Governor Stassen to present the mutual security program, which Governor Stassen did with the assistance of a number of charts (copies filed in the minutes of the meeting). Governor Stassen indicated that the obligational authority he would request for FY 1956 would amount to $3.4 billion, which included the military assistance program.
Governor Stassen was followed by Assistant Secretary of Defense Hensel, on the current status of estimated expenditures and new obligational authority for the military assistance program for FY 1956.
At the conclusion of Secretary Hensel’s report, the President asked the Secretary of State to comment on his and on Governor Stassen’s program.
Secretary Dulles said that as he understood it, a strong effort was being made to get these programs on a “pay-as-you-go basis”. While this might be very commendable from the domestic point of view, Secretary Dulles said he was greatly concerned over the impact of such an approach on our international relations. Our allies and the NATO powers have to plan ahead. In the past, the Department of Defense had never wanted to give advance commitments to these allied nations without assurance of having funds available to carry out these commitments. If we now, however, proceed on this new pay-as-you-go basis, what will be the effect on our allies? Will the Defense Department agree to take advance commitments to these allies for military assistance even if funds to execute the commitments have not been appropriated? If not, the effect on our allies would be serious indeed.
Secretary Wilson, referring to the problem of carry-over of funds from fiscal year to fiscal year, insisted that we were at present trying to correct our past mistakes too rapidly. It was certainly open to question whether the Defense Department could operate on [Page 634] the basis of a single year’s funds. His feeling was that we have ourselves “marked down too close”. No military aid was apparently earmarked for Europe in the military assistance program, and yet there was no certainty that we would not find ourselves obliged to provide European nations with some military assistance. For example, no one is quite sure yet as to what we will have to provide for German rearmament. Secretary Hensel interrupted to state that we had just presented the German Government with a package proposal with regard to our contribution to the build-up of their defenses.
Governor Stassen expressed his agreement with the general position of Secretary Wilson. We were, he said, “on the low side” in this financing if we plan any considerable amount of military assistance during the Fiscal Years 1958 and 1959.
The President said that the State Department and the military should provide some general idea of the military end items which might be required in the Fiscal Years 1958 and 1959.
Secretary Dulles commented that much would depend in this area on the question of new weapons. If these are to be used widely in Europe, the United States would of course have to supply them. It would be different if our plans in Europe are based on conventional weapons.
Secretary Wilson said that another significant defect in the military assistance program was that no allowance was made for repeat orders for offshore equipment. He said his off-the-cuff conclusion was that we ought to have an additional $500 million in the military assistance program. Secretary Hensel agreed with Secretary Wilson that the present budget was close to the bone on military assistance.
The President likewise thought that this was getting a little too close for comfort if the United States did propose to make deliveries of military end items in 1958 and 1959, and said he wished to talk the matter over further with Defense.
Secretary Dulles pointed out that the problem did not involve expenditures as such at all, but rather whether you could plan ahead on the basis of appropriations. If the present program were adopted it would either mean that you could not plan ahead or that if you did plan ahead you would plan without any assurance of being able to deliver the goods.
Governor Stassen admitted that there could be no doubt that the military assistance program was premised on the assumption that the European nations would be taking up a much larger portion of the costs of their own defense in future fiscal years. Of course, if you altered that premise you would automatically increase your funding needs.
[Page 635]Admiral Radford said that he wanted to underline what the Secretary of State had said as to the extreme difficulty of negotiating with our allies on the present basis of pay-as-you-go.
Secretary Wilson said that in sum the present program contemplated “weaning our military babies too quick”. If you ask Congress for appropriations of $3.4 billion and they learn that only $900 million of that total is for military assistance, they would promptly cut down on the other programs for which the $3.4 billion was asked. Governor Stassen, however, thought that Congress was beginning to understand the concept of “defense support”.
The President said that he certainly believed that there should be some increase in new obligational authority for the military assistance program. Indeed, he would even prefer to sacrifice the $150 million earmarked as an emergency fund for himself, and add that $150 million to the military assistance program, much as he liked the prospect of his emergency fund.
Secretary Wilson said that he had one more point to make. There was a question whether we had in our stockpile reserves the materials that might be needed to help to supply our allies. Therefore, before we undertook to stop offshore production, we’d better see to it that the result will not be serious potential shortages abroad. Moreover, it was better to have “this stuff” already over there than to have it stored here, because of the difficulty of the transport problem. The President agreed with Secretary Wilson that it would be most desirable if our NATO allies were able to see themselves through the early stages of the emergency.
[Here follow a one-sentence account of the presentation of the prevailing budgetary situation and outlook and a brief summary of NSC discussions, actions, and recommendations.]
Deputy Executive Secretary
- Drafted on Dec. 4.↩
- Not printed.↩
- For text of NSC 5422/2, “Guidelines Under NSC 162/2 for FY 1956,” dated Aug. 7, 1954, see vol. ii, Part 1, p. 715.↩
- NSC Action No. 1278, “AEC Budget Consideration for Fiscal Year 1956,” took place during the course of the 226th meeting of the National Security Council, Wednesday, Dec. 1, 1954. At that time, the NSC “Noted an oral presentation by the Chairman, Atomic Energy Commission of the Atomic Energy Commission budget program for Fiscal Year 1956”. (S/S–NSC (Miscellaneous) files, lot 66 D 95, “Records of Actions by the National Security Council, 1954”)↩