This joint memorandum of the Secretary of Defense and the Director of the
Bureau of the Budget summarizes the results and present status of further
reviews of the proposals for revising the FY
1961 and FY 1962 Defense programs and budget
which were submitted to you by the Secretary of Defense with his memorandum
dated February 20, 1961.1
Attachment I lists the items and amounts on which there is currently
agreement between the Department of Defense and the Bureau of the Budget,
assuming that you approve the related policy recommendations of the
Department of Defense. The changes in the amounts from those appearing in
the attachments to the February 20, 1961, memorandum of the Secretary of
Defense result partly from refinements by Defense in the earlier estimates
and partly from adjustments recommended by the Bureau of the Budget and
concurred in by the Department of Defense.
We have agreed to defer any request for appropriations for an increase in
airborne alert over the amounts now included in the FY 1962 Budget. In lieu thereof we propose to rely on
continuation in FY 1962 of the present
legislative authority to incur a deficiency, if necessary, to support an
airborne alert. The FY 1962 Budget now
includes funds for a 1/8 “on-the-shelf” air alert capability and 12 sorties
per day. Upon your determination at any time during the fiscal year that
further airborne alert action is necessary, the Defense Department could
provide for the alert on a deficiency basis. We estimate that the additional
cost involved in increasing the number of daily sorties from 12 to 30 should
be at the rate of $176 million per annum.
Attachment II lists the items and comments on which there is currently
disagreement between the Department of Defense and the Bureau of the Budget,
together with their respective recommendations.
The items covered in the attachments are limited to those contained in the
Department of Defense proposals of February 20, 1961, plus the Bureau of the
Budget proposal to cancel the last four Titan II squadrons
[Page 57]
which was also discussed with you at the meeting
on February 21, 1961. Several additional matters involving possible further
adjustments to the Defense FY 1962 budget
will be treated separately. These include, among others, the impact on the
FY 1962 budget of possible actions to
close installations, the possible additional fund requirements for retired
pay, repair of fire damage to the USS Constellation, cost increases for
Minuteman, and a classified project.
The specific amounts of the budget amendments required for each appropriation
account will be determined on the basis of your decisions with respect to
the program amounts shown in Attachments I and II and the items to be
treated separately. Except for a possible FY
1961 supplemental for retired pay, all FY
1961 requirements, including those indicated on Attachments I and II, are to
be financed from funds presently available pending the provision of
additional funds in the 1962 appropriations where necessary.
Attachment II3
PROPOSED REVISIONS TO THE FY
1961 AND FY 1962 DEFENSE PROGRAMS AND
BUDGETS CURRENTLY IN DISAGREEMENT
|
|
Proposed Revisions |
|
|
DOD |
BOB |
Variance |
| 1. Polaris, Second Acceleration (Strategic: Item 7c) |
+330.0 |
+1,108.0 |
+778.0 |
| 2. Titan II, Cancellation of Last Four Squadrons |
— |
- 200.0 |
-200.0 |
| 3. Nike-Zeus, Long Lead Production (Strategic: Item 8b) |
+ 82.8 |
— |
- 82.8 |
| 4. Military Personnel, Increased Strength |
|
|
| Army Special Forces (Limited: Item 1) |
+ 19.0 |
— |
- 19.0 |
| Army, Navy and Marines (Limited: Item 2) |
+ 35.0 |
— |
- 35.0 |
[Page 60]
| Air Force Net Increase, Expanded |
+ 9.0 |
— |
- 9.0 |
| B-52 Alert Force (Strategic: Item 2b) |
|
|
| Sub-Total |
+ 63.0 |
— |
- 63.0 |
| 5. Advent (R&D: Item 1) |
+ 22.7 |
— |
- 22.7 |
| 6. B-70 (R&D: Item 7) |
|
|
| FY 1962 |
-108.0 |
- 358.0 |
-250.0 |
| FY 1961 |
— |
- 100.0 |
-100.0 |
| Sub-Total |
-108.0 |
- 458.0 |
-350.0 |
| Recap of Proposals Currently in
Disagreement |
|
|
| FY 1962 |
+390.5 |
+ 550.0 |
+159.5 |
| FY 1961 |
— |
- 100.0 |
-100.0 |
| TOTAL |
+390.5 |
+ 450.0 |
+ 59.5 |
1. Polaris Second Acceleration
Defense Proposal
Provide $330 million for incremental funding on a minimum basis to
initiate with FY 1962 funds work on 10
additional Polaris submarines (Nos. 20 through 29).
Budget Recommendation
Assuming the 10 submarines are to be built, include $778 million
additional to provide funds on a “full funding” basis in accordance with
regular budgetary practices in the shipbuilding area. Defense
recommendation would definitely commit the Government to construction of
the 10 submarines. Proposed partial financing will probably be
criticized in Congress as a dodge to reduce the total amount of the 1962
budget amendment and would be an unfortunate precedent from a management
standpoint. The $778 million will have to be included in the 1963 budget
as an increased fund requirement without a corresponding increase in the
program.
Defense Recommendation
The inclusion of $778 million additional appropriation in FY 1962 is not considered necessary. The
long lead components for the additional submarines can be fully financed
without these funds. The $778 million would be required in FY 1963 for financing the ship construction
per se. However, this is primarily a fiscal policy matter for decision
by the President. Defense would not object if the decision was made to
include the additional funds in FY
1962.
2. Titan II—Cancellation of Last Four Squadrons
Budget Proposal
Consider, as a partial offset to the substantial increases in the
proposed budget revisions, the cancellation of the last 4 of the
presently
[Page 61]
planned 8 squadron
Titan II program. Total savings would be about $500 to $525 million, of
which between $200 and $225 million, consisting of amounts in the
present 1962 budget and recoupments of 1961 funds, could be applied to
reduce the proposed 1962 budget amendments. As shown below, the
reduction would eliminate from the forces only 36 operational Titan II
missiles which would not come into the force until the third quarter of
1964, by which time the inventory of Polaris and Minuteman missiles will
be increasing rapidly, and an even greater increase in Minuteman
missiles could be accomplished under the flexibility provisions
recommended in the budget amendment.
|
End FY
1963 |
End FY
1964 |
| Atlas |
132 |
132 |
| Titan I |
54 |
54 |
| Titan II (first 4 squadrons) |
27 |
36 |
| Minuteman |
150 |
540 |
| Polaris |
192 |
384 |
| Total operational missiles |
555 |
1,146 |
| Titan II (last 4 squadrons) |
-0- |
36 |
| Minuteman (additional possible) |
— |
260 |
It is suggested that the equivalent additional deterrent posture could be
achieved in this period, if necessary, with additional Minuteman
missiles in lieu of the last 4 Titan II squadrons and that the special
advantages of the Titan II missile (longer range and heavier warhead)
may be provided to a sufficient degree by the first 4 squadrons which,
under the proposal, would not be cancelled. It would be desirable not to
defer the decision since initial construction contracts have been let
and obligations through FY 1962 will be
about $250 million.
Defense Recommendation
The cost comparison made by the Bureau of the Budget is not an accepted
basis for measuring effectiveness. The current uncertainty as to
complete reliability of the Minuteman precludes the substitution thereof
for the 4 Titan squadrons. Further, the military requirements, as they
are determined from active studies now being made, may indicate a need
for missiles of large capabilities which cannot be filled by the
Minuteman.
3. Nike Zeus—Long Lead Production
Defense Proposal
Provide $82.8 million, the minimum first year funding, to provide
capability for and to initiate actual production of long lead time items
which must be contracted for in FY 1962
to permit accomplishment of the first Nike Zeus installations by about
October 1965 if all developmental, production, and installation
schedules are met. The intention is to provide flexibility, at a low
cost, for a future decision whether or not to go
[Page 62]
ahead with production and installation of the Nike
Zeus system. A comprehensive review by the Office of the Secretary of
Defense clearly indicates that the minimum initial requirement is $82.8
million rather than the previous provisional estimate of $50.0 million
for this purpose.
Budget Recommendation
Defer provision of first year production funding at least to the 1963
budget. There appears to be general agreement (except for certain Army
and contractor representatives) that development has not yet progressed
to the point where the technical feasibility of the Zeus system has been
proven. A decision now to proceed with $82.8 million in 1962 entails
follow-on funding of about $550 million in 1963 for large-scale
production activities to preserve the possibility of meeting the October
1965 date.
A decision on the $550 million would have to be made in the 1963 budget
decision period this fall with very little additional developmental data
than is available right now—the key tests of the complete system do not
begin until the summer of 1962. Thus, instead of providing flexibility,
it appears that a decision to provide $82.8 million in 1962 virtually
commits us to large-scale production, and it would certainly be regarded
as doing so by the vocal advocates of Nike-Zeus.
Deferring first year production funding at least to the 1963 budget, as
recommended, would defer the large-scale $550 million funding decision
to the 1964 budget decision period in the fall of 1962, at which time
the results of the first full system tests should be available.
In view of the widespread doubts whether the Nike-Zeus system should ever
be deployed, because of practical operating problems, its own
vulnerability, and its very large cost in relation to the protection
received, deferral of the initial production decision appears warranted,
even if it means a delay of at least a year in the target date of
October 1965. Demonstration for psychological or prestige reasons of our
technical capability of intercepting an ICBM would be accomplished by the present research and
development program without going into actual production.
Defense Recommendation
The Department of Defense agrees with the position taken by the Bureau of
the Budget that the Nike Zeus development program involves many
uncertainties and, in common with other advanced weapon system
developments, such as the big missiles, constitutes a high risk program
with a chance of failure, but believes that it has the promise of
substantial pay-off in terms of deterrence and prestige, if
successful.
Provision in FY 1962 of $82.8 million does
not entail a follow-on funding decision of about $550 million in the
FY 1963 budget unless, for good
reason, the capability to proceed with preparations for production is
[Page 63]
exercised early enough in
FY 1962 to warrant such an amount of
follow-on funding in FY 1963 to preserve
the possibility of meeting the October 1965 date. Preservation of the
capability to proceed with preparations for production can, of course,
be misinterpreted, but it is the intention of the Department of Defense
to so manage this capability as to make such misinterpretation unlikely.
It does not necessarily follow that deferring the first year production
decision to the FY 1963 budget would
defer the $550 million follow-on decision to the FY 1964 budget since the time frame of the sequence of
events in this program is not that rigid. Furthermore, it is expected
that the Nike Zeus program will continue to involve uncertainties even
after the test schedule is well underway, but this fact in itself is not
a compelling argument against the early provision of the capability to
proceed with preparations for production at the earliest time an
assessment of the relative risks involved would favor a decision to
advance.
4. Military Personnel, Increased Strength (all items)
Defense Proposal
Provide a net increase of $63 million for military personnel costs in
1962 to provide for 13,000 additional personnel for limited war and
Polaris capabilities and a 2,000 net increase for the B-52 ground alert
program after allowing for slight offsetting reductions resulting from
the B-47 accelerated phase-down and the elimination of Snark missile
units.
Budget Recommendation
Approve no change in total military personnel strength or funding in
1962, on the grounds that the proposed increases (to which there is no
objection) can be accommodated by redistribution within the existing
total. Specific areas in which offsetting reductions well in excess of
the proposed increases appear possible have been brought to the
attention of the Department of Defense.
Defense Recommendation
Defense must have the certain capability of providing the military
strength needed for these identified purposes without the conditional
necessity of making offsetting reductions elsewhere at this time. The
military services advise they cannot absorb these requirements without a
time consuming review of all requirements. Such a review has been
ordered but cannot be relied upon to produce the required spaces in time
to meet these requirements. These requested spaces and funds will be
released by the Secretary of Defense only upon showings by the Services
that they cannot otherwise provide for them within presently authorized
strengths.
[Page 64]
5. Advent—Communications Satellite Project
Defense Proposal
The Department of Defense proposes to augment the FY 1961 funding for Advent by a transfer of $13.2 million
from the Emergency Fund and to add $22.7 million to the $57.0 million
presently in the FY 1962 budget, in order
to maintain the research and development effort at a level to insure
that highly reliable satellite equipments are available to meet present
schedules.
Budget Recommendation
Make no specific recommendations to Congress at this time for additional
funding in the controversial communications satellite field in the
absence of a thorough review of both Defense and NASA projects in this field on which an
administration position can be based. Use 1962 Emergency Fund for any
increased funding requirements for Advent that may be required.
Defense Recommendation
The amount of $57.0 million presently in the FY 1962 budget is insufficient to maintain an adequate
research and development schedule at a level of effort required to
achieve a highly reliable satellite. The requirement is now known and
thus would not be an appropriate need to be met from the FY 1962 Emergency Fund. The need for
reliable full time military communications is considered to be
compelling to the extent that any reassessment of national policy would
recognize the need to continue Advent.
6. B-70
Defense Proposal
The Department of Defense proposes to proceed at a reduced rate of $250
million in FY 1962 with a development
program which will include 6 prototype aircraft and prototypes of
certain sub-systems to provide for the orderly demonstration of Mach 3
flight with an airframe potentially useful as a bomber. The intention is
to reserve an option later to develop a weapon system which could
provide a first operational wing about 1970.
Budget Recommendation
Consider cancellation of entire program at this time in view of doubtful
need for an aircraft with the B-70 characteristics in addition to
expected missile capabilities during the period the B-70 would become
available and in view of the extremely high cost of the B-70 in relation
to the limited second strike capabilities that would be provided by such
a
[Page 65]
vulnerable ground based
system. If a new strategic bomber beyond the B-52 and B-58 is needed,
consideration should be given to a less costly concept better adapted to
an airborne alert.
Defense Recommendation
Since evidence is not conclusive it is not timely to decide either (a) to
proceed at this time with an all-out weapon system development program,
or (b) that there is to be no further step taken in manned strategic
bombers beyond the B-52 by terminating the B-70 program. Even though
there will be primary dependence on ballistic missiles for the strategic
mission in the future, there remains certain uncertainties with respect
to missiles including the question of reliability. There are certain
advantages inherent in a controlled force of manned bombers. Until full
confidence can be achieved in the missile force and until there is
conclusive evidence of the feasibility or lack of feasibility, based on
technical, military, economic and timing factors, of a Mach 3 bomber, it
is believed to be essential to explore this phase of flight to preserve
the option to advance towards a weapon system at the earliest time an
assessment of the relative risks involved should favor such
decision.
[Here follows a series of financial recapitulations.]
