Foreign Relations of the United States, 1969–1976, Volume II, Organization and Management of U.S. Foreign Policy, 1969–1972

82. Memorandum From the Director of the Program Analysis Staff, National Security Council (Lynn) to the President’s Assistant for National Security Affairs (Kissinger)¹

Washington, October 24, 1969.

SUBJECT

• Meeting with Mayo, Ehrlichman on FY 71 Budget

I understand you will be meeting this afternoon with Bob Mayo and John Ehrlichman on the FY 71 budget.

From what I can tell, Bob Mayo will probably have two issues to discuss:

• —The extremely tight financial situation, which he may believe requires a further reduction in projected FY 71 defense outlays of about $2 billion (from around $75 billion, including pay raises, which is what DOD is shooting for now, to about $73 billion).
• —Procedures whereby the FY 71 defense budget will be reviewed by the President, including the role of the DPRC.

Discussion

Financial Situation.

I have always been concerned about the quality of the Government’s financial projections and about the procedures whereby BOB decides how overall budget cuts are to be allocated among agencies.

The BOB’s power to fix the revenue and spending targets and to decide which agency gets what gives BOB enormous leverage over the President’s program and particularly over new programs. I believe Mayo’s analysis should be carefully reviewed by responsible policy officials before Mayo takes action, but this may be a larger issue than you want to take on.

At the least, however, I think Mayo should be required to take his case for further cuts in DOD’s budget to the DPRC for a full policy review. This is what the DPRC is for.

Further, I believe such a review should take place as soon as possible. From what I can tell, Mayo’s final ideas on DOD’s budget probably wouldn’t be given to DOD until early December as things stand now.

General Procedures for Reviewing DOD’s Budget.

BOB “Model.” BOB people are under the impression that the President wants them to treat DOD like any other agency as far as the budget review is concerned. This means that something like the following would take place:

• —In early December, BOB would give DOD its final budget “mark.”
• —Laird would respond with a memorandum for the President containing his recommendations on those issues which he and the Budget Director differ.
• —Mayo would then prepare a memorandum for the President laying out Laird’s views and giving BOB’s recommendations on how the issues should be resolved.
• —A meeting would take place in mid-December with the President, you, Laird, the JCS and possibly Mayo to reach final decisions.

The specific issues would probably be centered mainly on specific weapons programs, although many BOB staffers feel they must now analyze their issues in a broad strategic context related to NSDM 27.² In any event, the President’s staff work would be done by BOB.

DPRC “Model.” My understanding is that the President wants to put an end to these eleventh hour confrontations and to broaden the review process and the way issues are framed.

This could be done by using the DPRC as the forum for reviewing issues and laying them out for the President. This would mean that:

• —Mayo would take his proposals on the DOD Budget and on program issues to the DPRC for full review. Laird’s positions on these questions would also be debated in this forum.
• —Based on DPRC review, you, as Chairman, would forward a memorandum to the President outlining his choices and the basic judgments he must make in resolving them.
• —The staffing would be a joint enterprise of the DPRC so that BOB’s view of the world would not be the primary view the President sees.
• —Mayo could still meet privately with the President to present his views if that’s what the President wanted, but at least a balanced DPRC evaluation would be available to the President.

In this model, the DPRC would be the central focus for reviewing DOD’s budget and related issues.

Since Mayo’s independence and freedom of action would be materially reduced, you can expect him to resist the idea that his role be compromised by having him work through the DPRC.³

(My personal view is that there should be a domestic equivalent to the DPRC. The dominant role of the Budget Director has got to be changed in favor of a more substantive process.)

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–098, Defense Program Review Committee Meetings, DRPC General 1969–Feb. 1970. Top Secret; Sensitive; Nodis.
2. NSDM 27, “U.S. Military Posture,” October 11, 1969. (National Archives, Nixon Presidential Materials, NSC Files, Box 363, Subject Files, National Security Decision Memoranda Nos. 1–50)
3. In a March 23, 1970, memorandum to Kissinger, Mayo indicated he had been expecting implementation of the changes agreed upon at the October 24 meeting, in particular his withdrawal as a designated member of the DPRC “in light of BOB’s responsibilities covering the entire range of the Government’s programs” whereas the DPRC made budget recommendations to the President “on a partial as opposed to an overall basis.” Moreover, Mayo stated, since “by its very nature, the DPRC can provide nothing more than a partial judgment,” overall tradeoffs between defense and non-defense functions “must be considered in a wider forum than that represented by the DPRC.” (Ibid., Agency Files, Box 206, Bureau of the Budget)