Foreign Relations of the United States, 1964–1968, Volume X, National Security Policy

65. Memorandum From Secretary of Defense McNamara to President Johnson¹

Washington, undated.

SUBJECT

• Defense Department Budget for FY 1966

With but minor exceptions, I have now completed my review of the Department of Defense military program and financial budget for FY 1966. The program, which I recommend for your approval, will require new obligational authority and expenditures for Military Functions, Military Assistance and Civil Defense as shown below (in billions):

	FY ′64	FY ′65	FY ′66
NOA	$51.0	49.7a	49.0
Expenditures	51.2	49.8b	49.8

a Congress cut $1.2 billion from the $50.9 NOA request.

b This estimate, part of the Mid-Year Review, although $1.4 billion below the original budget estimate, continues to appear too high.

The military forces supported by this budget are summarized in the attached tables at Tab A.² The recommended force structure was based on requirements for national security and was not limited by arbitrary or predetermined budget ceilings. In my review of the budgets proposed by the Services, I have attempted, as last year, to eliminate all non-essential, marginal, and postponable expenditures, with the objective of minimizing the costs of supporting the required forces.

In developing the program and reviewing the budget proposals, I have had the continuing counsel and assistance of the Joint Chiefs of Staff. Although the force structure does not include all the forces or force modernizations recommended by the Joint Chiefs of Staff or individual members thereof, the Joint Chiefs of Staff agree that the program supported by this budget will increase our over-all combat effectiveness and will provide effective forces in a high state of readiness for defense of the vital interests of the United States. Tab B lists specific comments of the Chiefs on my proposals.³

The recommended program has been reviewed with the Secretary of State, the President’s Special Assistant for National Security Affairs, the Director of the Bureau of the Budget, and the President’s Science Advisor. They are in agreement with my recommendations except with respect to the following programs:⁴

1. Minuteman II Retrofit. I favor delaying by six months the previous schedule for retrofitting Minuteman II missiles into Minuteman I silos, to insure adequate time for the development of a highly reliable missile system. The Director of the Bureau of the Budget agrees that funds should be appropriated on this basis, on the understanding that further delay may be necessary and funds will be released only to support a retrofit schedule which is optimized from the point of view of missile reliability and cost.

2. CX–(HLS) Transport Aircraft. Your Science Advisor is not convinced that the development of this new, large transport aircraft is required. He believes that the same over-all lift capability can be provided at lower cost with less airlift, if more roll-on roll-off ships are constructed and used as forward floating depots. I agree that we should make greater use of the new roll-on roll-off ships and have included four in the FY 1966 budget, but I am convinced that additional airlift is also needed and that it can be supplied most economically by developing the CX–(HLS). I recommend that we include funds for the development in the FY 1966 budget, but initiate, jointly with the Science Advisor, a study to determine by April 1, 1965 the best mix of airlift and sealift in the forces. Dr. Hornig concurs in this approach.

3. The Manned Orbital Laboratory (MOL). The Science Advisor and the Director of the Bureau of the Budget have doubts concerning the requirements for the MOL. I recommend, and both Dr. Hornig and Mr. Gordon agree, that funds for the project be included in the FY 1966 budget, but that they not be released until we are agreed that the program of military, engineering, and scientific experiments and steps toward operational capability is worth the cost and does not duplicate approved programs in any other agency. I am convinced that at least a major portion of the funds will be required to support a program of experiments involving heavy military reconnaissance payloads, manned or unmanned.

4. TFX Production. The Science Advisor has suggested stretching out the TFX production schedule to permit more of the Air Force planes to be equipped with the superior Mk II avionics. I disagree with this suggestion. The TFX with Mk I avionics is a far greater advance over the F–100’s and F–105’s, which would have to be retained longer in the force if the TFX schedule were stretched, than the TFX with Mk II avionics is over the TFX with Mk I avionics.

The budget at present contains no provision for an increase in military pay in FY 1966. The increase called for by the comparability formula which I presented to the Congress in my posture statement last year would be about $250 million.

We are still working on a number of minor budget issues. I do not anticipate that decisions on these matters will materially affect the budget totals.

I will be ready for a meeting with you and the Joint Chiefs of Staff on December 21, 22, or 23 to discuss our final proposals.

Robert S. McNamara

1. Source: Johnson Library, National Security File, Agency File, Defense Budget—FY 1966, Box 16. Secret. Another copy of the memorandum is dated December 10. (National Archives and Records Administration, RG 200, Defense Programs and Operations, Final Memos re Budget, Dec. 1964, Box 40)
2. Not found.
3. Not attached, but presumably an undated, 6-page “Summary of JCS Recommendations on the Draft Presidential Memorandum” in the Johnson Library, National Security File, Agency File, Defense Budget—FY 1966, Box 16.
4. The Secretary of State expresses concern about the effect the proposed reduction in the Minuteman program (from 1200 to 1000) may have upon damage limitation in Western Europe. I have assured him that the effect would be small. [Footnote in the source text.]