Foreign Relations of the United States, 1969–1976, Volume XXXIV, National Security Policy, 1969–1972

192. Paper Prepared by the Defense Program Review Committee Working Group¹

Washington, August 11, 1971.

DEFENSE STRATEGY, FORCES, AND BUDGETS

I. The Problem

The President must consider major strategy and force issues in connection with the DoD budget for FY 1973. To assist in these decisions, this paper:

• —delineates the national security objectives we design our forces to support,
• —describes factors in the international situation which bear on the design of U.S. strategy and forces,
• —assesses the capabilities of current and planned forces, and
• —discusses alternatives to current and planned forces and assesses their costs and other implications.

Apart from the basic considerations of our security policy objectives, economic and budgetary factors bear importantly on decisions concerning forces and budgets for FY 1973. Budgets currently being developed within DoD which when added to planned domestic expenditures appear to involve expenditures above those consistent with a balanced full employment budget.

[Omitted here are Sections II and III, which recapitulate the objectives of U.S. military forces and the current national security situation.]

IV. U.S. Strategic Forces

In order to meet our national security objectives, the U.S. plans our strategic forces to meet the following criteria (NSDM–16):²

• —Maintain high confidence that the U.S. second-strike capability is sufficient to deter an all-out surprise attack on our strategic forces.
• —Ensure that the Soviet Union would have no incentive to strike the United States first in a crisis.
• —Deny to the Soviets the ability to cause significantly more deaths and industrial damage in the U.S. than they themselves would suffer in a nuclear war.
• —Deploy defenses to limit damage from small attacks to a low-level.

In addition to this specific guidance, the following guidance from the President and Secretary of Defense is used to plan strategic forces:

• —Numbers, characteristics and deployments of U.S. forces should not be interpreted by the Soviets as being intended to threaten a disarming attack.
• —Forces should be adequate to prevent ourselves and our allies from being coerced.
• —Forces should be sufficient to help our theater nuclear capabilities and the nuclear capabilities of our allies to deter nuclear attacks.
• —We need to have available strategic alternatives (including command and control capabilities) appropriate to the nature and level of provocation.
• —We should not plan strategic forces for the purpose of limiting damage to the U.S. in the event of a large nuclear attack.

In addition to the above planning criteria, our current force planning must take into account SALT. Unilateral actions to change our forces in a major way could affect our position in SALT.

A. U.S. Strategic Offensive Force Capabilities

Our presently planned strategic offensive forces have the following military capabilities:

• —Following a surprise Soviet attack our mutually supporting bomber and missile forces could, if targeted solely against urban/industrial targets, destroy about 75% of Soviet industry and about 45% of the Soviet population. Each major force component currently has an independent “assured destruction” capability to destroy at least 25% of the Soviet population and about 40% of Soviet industry. While this is one measure of confidence in deterrence, our forces are actually targeted against a variety of military targets as well as urban/industrial areas.
• —Our strategic forces have very little damage-limiting capability against the Soviet Union, since we have no offensive force that can destroy both time-sensitive and hardened targets and we do not have ABM defenses to protect U.S. population against large-scale attacks. On the other hand, against unhardened military targets we have a substantial offensive counterforce capability.
• —Against China, our strategic offensive forces presently have a capability to substantially limit damage to the U.S., its Pacific bases and Asian allies through pre-emptive counterforce strikes. On the other hand, it is not clear that the U.S. could totally disarm China in a first strike since we cannot be confident of locating, targeting, and destroying all Chinese nuclear forces prior to launch. The uncertainties about the effectiveness of a disarming strike against China will grow in the future. However, the U.S. possesses and will continue to possess through the 1970s the capability to destroy about 10% of China’s total population (about 70 million people in the 100 largest cities) and over 75% of her industry. This would not significantly affect our capabilities against the Soviet Union.

If not precluded by an arms control agreement, continuing growth in level and quality of Soviet strategic forces could have a major impact on U.S. strategic offensive force capabilities:

• —Continuing improvements in the Soviet ICBM force could threaten the survival of the land-based Minuteman force by the midto-late 1970s, if we took no offsetting actions.
• —Soviet SLBMs could threaten the survivability of the U.S. bomber force because of the short warning time, and
• —Continuing growth and improvements in Soviet air defenses could threaten the penetration of U.S. bombers and raise uncertainty in the penetration capability of U.S. missiles.

Current force improvements and R&D on strategic offensive forces are designed to maintain our capabilities if these threats continue to develop. The JCS, however, believe the rate of modernization should be accelerated.

B. U.S. Strategic Defensive Force Capabilities

U.S. strategic defensive systems include the Safeguard ABM system, CONUS air defense, space surveillance and defense, and civil defense.

Current planning for strategic defensive forces emphasizes defense against small attacks and protection for strategic retaliatory forces.

In the absence of a SALT agreement, the United States is planning to deploy the 12-site Safeguard ABM defense which will provide a capability to:

• —protect Minuteman against a limited range of Soviet threats;
• —limit damage to U.S. cities, military targets and command and control centers from small missile attacks;
• —provide added time during a large or small missile attack for safe escape of alert bombers and air defense interceptors and for moving command authorities to alternate command centers.

Our present strategic air defense forces are designed to defend strategic retaliatory forces and command and control centers; restrict unauthorized overflight of CONUS; and limit damage from small bomber attacks. The current force would have little capability if the bomber attack is preceded by a missile attack. In the future, the present forces would have a limited capability against the projected low-altitude threat, would continue to have almost no survivability against missile attacks, and would provide only limited bomber attack warning.

C. Strategic Command and Control Capabilities

An effective command and control capability is essential to provide the President with options to use the strategic forces during periods of crisis. Given our present capabilities, the preplanned strategic responses could be carried out but other more selective responses would be difficult if not impossible to execute.

D. Alternative Force Postures

Although our forces are sufficient today to satisfy our objectives we face problems in the future because of:

• —the present and potential threats to the survivability of our strategic offensive forces;
• —the possibility that an arms control agreement may limit the deployment of ballistic missile defenses;
• —the expense of force improvements and modernization in the light of the increasing pressure to reduce Defense spending; and
• —the need to improve the flexibility of our strategic forces against a wider range of contingencies.

These considerations lead to alternative programs for strategic forces in the future.

1. Strategic Offensive Force Alternatives

Our strategic offensive forces could be planned along the following range of alternatives which are undergoing further study prior to consideration later this year.

• —Continue with the current Triad concept, improving its flexibility, to maintain a high confidence deterrent force against current and future uncertainties. This is the approach of the current defense program. It would require $6.9 billion in FY 73 outlays and about $44 billion in FY 73–77.
• —Only rely on two of the force components to provide an independent retaliatory capability. This posture would have lesser confidence than the Triad since the force would be more sensitive to technological breakthroughs or major force failures. It would require $6.7 billion in FY 73 outlays and about $40 billion in FY 73–77.
• —Maintain a posture wherein each of the three force components would provide a lower level and “non-independent” retaliatory capability. This posture would require $6.6 billion in FY 73 and $34 billion in FY 73–77.

2. Strategic Defensive Force Alternatives

ABM—The major strategic defensive force issue is what to do about Safeguard in FY 73 and beyond. The presently planned 12-site program (FY 80 completion) is essential if we are to retain the fourth NSDM–16 strategic sufficiency criteria. Many believe a light defense against China would have important strategic utility and political significance in extending deterrence to allies. On the other hand, a 12–site program is inconsistent with the position we have taken in SALT. There is little chance it will be approved by Congress unless SALT fails.

If we are to plan a smaller Safeguard system:

• —Reducing the program to four sites would reduce FY 73 outlays by $130 million and FY 73–77 cost by about $5.6 billion.
• —Reducing the program to three sites would reduce FY 73 outlays by $200 million and FY 73–77 cost by about $6.7 billion.
• —Reducing to two sites would reduce FY 73 outlays by $460 million and save $7.6 billion over FY 73–77 compared to the 12-site program.

SALT could lead to a ban on ABMs, but R&D would continue on ABM defenses. An ABM ban would save about $1 billion in FY 73 and over $8 billion in FY 73–77.

Air Defenses—Because of the current and projected cost of our air defenses, several alternatives can be considered for this force:

• —Continue the current posture: This would require $1 billion in FY 73 outlays and $5 billion in FY 73–77.
• —Modernized Posture: This posture satisfies the air defense objectives against future threats and will improve air defense survivability against bomber attacks preceded by missile attacks. Major new systems include the Airborne Warning and Control System, the Over-the-Horizon Backscatter radar, improved interceptors and missiles. This is the current Defense program and requires $1.2 billion in FY 73 outlays and $8 billion in FY 73–77. An accelerated modernization program could be undertaken. Additional FY 73 funds would not be required, but an additional $1 billion would be needed by FY 77.
• —Reduced Air Defense Posture: This posture would maintain the capability to provide only tactical warning of bomber attacks on the U.S. and to restrict the unauthorized overflight of CONUS. The improved radar would be deployed but all other modernization would be cancelled and air defense operations would be cut in half. This posture would have practically no air defense capability. It requires $800 million in FY 73 outlays and $3 billion in FY 73–77.

V. General Purpose Forces

Current Strategy and Capabilities

Our current strategy is based on NSDM–27 as modified by NSDM–95.³ While deterrence is our prime objective, we plan with allied help to have the capability to:

• —Conduct an initial defense in Europe or a sustained defense against PRC attack in one theater in Asia. In case of a simultaneous attack, NATO takes precedence.
• —Aid an Asian ally in coping with a non-Chinese threat.
• —Deal with a minor contingency.

DOD is presently developing its 5 year program which will serve as the basis for the FY 73 budget. However, Defense now has available two alternative programs based on different outlay ceilings:

• —The FYDP program prepared last year within a ceiling of $81.7B in 73.
• —Service prepared programs (POMs) within a ceiling of $79.6B.

In addition, the JCS have developed the forces they believe are needed to carry out national strategy at prudent risk (JSOP forces). Budgetary considerations are not a controlling factor.

The general purpose forces of these programs are shown on Table 1 and are compared with our forces in FY 64 and FY 72. In the discussion that follows all force and cost comparisons are based on the FYDP program and spending level.

Table 1

U.S. Active General Purpose Forces

		FY 73
		FY 64	FY 72	JSOP4	FYDP5	POM6
Ground Forces
	Army7	16-1/3	13-1/3	16 1/3	13-1/3	11
	USMC	3	3	3	3	3
	Total Divs.	19-1/3	16-1/3	19-1/3	16-1/3	14
Naval Forces
	Carriers8	24	17	18	15	13
	Escorts	253	226	208	201	177
	Amphibious Ships	134	76	74	75	61
Tactical Air Forces
	USAF	22	21-1/3	22	21-1/3	21-1/3
	USN	15	13	13	11	13
	USMC	15	13	13	11	13
	Total Wings	40	36-1/3	38	35-1/3	37-1/3

Capabilities for Europe

The judgment reached in NSSM 84⁹ concerning NATO capabilities against the Pact remains valid for our planned forces. NSSM 84 states:

“… if NATO and the Pact maintain approximately their present force levels in Europe, and if NATO makes some improvement to its forces, there is neither an assured forward defense against a Soviet breakthrough nor is a Soviet offensive assured of success in a relatively short conventional war. NATO could, of course, lose conventionally if it fails to act in the face of a Pact mobilization. …”

Planned forces maintain current deployments to Europe which are indicated in the following table.

Current and Planned Deployments to Europe

Divisions	4-1/3
Separate Brigades and Regiments	3
AF Squadrons/Aircraft	22/492
Carrier Task Group	2
Amphibious Ready Group (ARG)	1
[less than 1 line not declassified]	[number not declassified]

Our ability to reinforce and resupply NATO is critical—particularly in the early phase of a build-up—as indicated in NSSM 84. In this connection, the following are relevant considerations concerning the capabilities of FYDP forces:

• —Substantial land forces can be deployed in NATO Europe rapidly. However, the forces that deploy during the 30 to 90 day period after mobilization arrive later than the JCS believe is essential and only 15 Army divisions are in Europe by M+90 compared to the 17 Army divisions the JCS state are required.
• —The Air Force tactical air units can essentially meet the deployment targets.
• —Given the large Soviet submarine threat, large shipping losses could be expected in the Atlantic. By relying on prepositioned equipment and airlift, we may be able to lessen the criticality of the problems during the initial stages of a conflict. If high losses do occur, our ability to sustain a continued high intensity conflict would be seriously degraded.
• —The capability of our forces planned for NATO—land, sea and air—will be enhanced over next several years by qualitative improvements. The improvements include better anti-tank weapons, more modern aircraft, improved anti-submarine warfare equipment, and protective shelters for our aircraft.

Capabilities for Asia

Planned forces, together with those of our allies, appear adequate to deter conventional attacks but not insurgencies by the Asian Communist countries.

The following table illustrates the forces that can be maintained in the Western Pacific under the FYDP.

Current and Planned Deployments in Asia

(Excludes SEA)

	Current FY 72	FYDP FY 73
Divisions	1-2/3	1-2/3 or 110
AF Squadrons	10	10
USMC Squadrons	5	5
Carrier Task Group	3	2–3
[less than 1 line not declassified]	[number not declassified]	[number not declassified]

NSSM 69 identified a wide range of potential wartime requirements for U.S. forces in Asia in the mid-1970s depending on judgments of the threat, allied capabilities and levels of insurgency.¹¹

Potential U.S. Force Requirements for Asia

	U.S. Divisions	U.S. Aircraft
Korea	0–6	250–1800
SEA	1–9	200–1700

We can deploy forces to Asia up to the maximum postulated requirement if we activate the reserves and accept the following conditions:

• —Our ability to deploy land forces to Europe would be degraded but would recover as the reserves are readied for combat.
• —Air and naval forces are adequate but losses in Asia could degrade our forces available for NATO.
• —If it is not feasible to activate the reserves to meet an Asian crisis, our land force capability would be more limited; we could deploy 4 or 5 divisions which may not be adequate to hold forward against a serious PRC challenge. Also this action would cut sharply into our NATO capability—7 rather than 8 divisions could be in place in Europe by M+30 and this force would not be augmented further until M+50.
• —In the event of a NATO crisis, some air and a majority of the naval units in Asia would have to be redeployed and the intensity of combat in Asia reduced, a risky and uncertain action.

Capabilities for the Mediterranean and Middle East

The planned forces are adequate to maintain the 6th Fleet in the Mediterranean at its current strength and augment it in a period of crisis. Together with present US air and ground forces in Europe, these forces are a strong, although not certain deterrent to major Soviet intervention in an Arab-Israeli conflict. If Soviet intervention on a scale threatening Israeli survival did occur, however, the US would have serious problems in bringing any but naval forces to bear. Deployments of US air or ground forces would require use of bases and overflight rights in Greece, Turkey, Spain, Italy and France, but there is a high probability that these rights would be denied by host governments for political reasons. Under these circumstances, there is a good chance that the Soviets, despite long and difficult lines of communications, could reinforce and operate more effectively than we could so long as the conflict were limited to Arab-Israeli territory.

Capabilities for War at Sea Against the Soviet Union

A war at sea with the Soviet Union would be likely to occur as part of a major NATO/Pact conflict and could develop during periods of high tension during a European or Middle-East crisis. It could also involve a conflict at sea in the Pacific. The capability of our air and naval forces to cope with a major Soviet effort to interdict shipping is uncertain.

• —Under a “worst case” situation losses could be great. This could reduce our reinforcements to Europe and our ability to sustain intense fighting as our stocks are depleted. It might also lead to serious economic consequences for our allies.
• —The major modernization effort that the Navy has underway should improve the situation, but this effort will not begin having an effect until the mid-1970s.

Alternative Land and Tactical Air Force Postures

In looking at variations in our force posture and their costs, one must first determine what we wish to be able to accomplish militarily in Europe and Asia. Then the interplay of options and forces for each theater must be considered.

NATO Options—Defense of Europe is the most demanding general purpose forces military mission. The sizing of our tactical nuclear and conventional forces are governed largely by the demands of this theater. The options below consider differing approaches to our basic objective of successfully defending NATO Europe should deterrence fail.

• —We could provide an enhanced NATO capability. Given the judgment of many that present NATO forces have only a marginal capability to defend Europe without “early” recourse to nuclear weapons, steps could be taken to strengthen significantly NATO’s forces. US actions could include buying more airlift, stockpiling more equipment in Europe, building additional aircraft shelters, and increasing the readiness of the forces based in the U.S. to speed up their deployment to Europe in the early months of a conflict. This might also serve as a carrot to encourage our NATO Allies to increase their forces and budgets, and would provide the Soviet Union greater incentive to negotiate a satisfactory MBFR agreement.
• —We could emphasize the initial defense of Europe (i.e., the first 30 to 60 days) and cut back forces deployed later. The most critical period in a European conflict may be during the opening days and weeks. Even under the enhanced NATO capability option, we would be unlikely to have more than 8 divisions in place by M+30 and 10 divisions by M+45. Given the risks during the early weeks of a conflict and doubts about the sustaining capability of Pact and Allied forces, deployments after this time may contribute little to the outcome. For further buildup we would rely on the reserves which would be ready about M+90. The political impact of the option on NATO is uncertain. However, deployed U.S. forces and M+30 commitments would be maintained and these are the most important politically to the Alliance.

Asia Options—The second major mission of our general purpose forces is to deter a major PRC attack or with the help of our allies, defeat it if it occurs. Variations in our force planning for Asia depend largely on judgments of the threat levels and capability of allied forces. We may be more willing to take greater risks in Asia since:

• —The PRC may be deterred by our overwhelming strategic and tactical nuclear capability. Continued Soviet threat to the PRC and internal difficulties also may reduce the likelihood of Chinese military adventurism.
• —Our Allies—particularly Korea and SVN—have made great military strides and their need for direct U.S. military involvement is lessening. Depending on our assistance levels and their ability to absorb it, we may be able to move them much further toward self reliance by the mid-1970s.
• —Regionalism also may by 1975–1980 offer a way to reduce the need for U.S. involvement in Asian conflicts. However, this is not a short term option, given the internal and international constraints operating in the countries in the area.

All of the options suggested below could include a significant U.S. presence in Asia, which may be important for political as well as security reasons:

• —The most demanding option would be to plan to counter high PRC threats which include insurgency, with only a modest dependence on allied forces. This option could require the commitment of 9 Army and Marine divisions, 20 tactical air wings, and supporting naval and mobility forces. These forces cannot be provided under the FYDP without serious degradation in our NATO-oriented forces.
• —We could plan a capability to counter only moderate PRC threats in either Northeast or Southeast Asia, with only modest reliance on allies and regional cooperation. This would involve forces on the order of 3 divisions and 10 to 15 tactical wings and supporting naval and mobility forces. They could be provided from the present force structure. If a greater threat materialized, we would have to make a more significant drawdown on our NATO capability until Reserves could be mobilized.
• —We could plan only to counter major conventional PRC aggression in Northeast Asia on the assumption that this is the most probable threat and our interests in that region are more critical. This would reduce the number of land forces needed for Asia.
• —We could plan against the moderate PRC threat in one or both theaters, and rely increasingly on allied capability—especially land forces—during the 1970s. We might also anticipate a significant regional response in the event of a major PRC aggression. U.S. air and naval forces would be required but land forces might not be needed later in the decade. This option involves a significant level of risk in view of its dependence on the capability and willingness of our Asian allies.
• —We could rely primarily on tactical nuclear weapons and the conventional forces required to deliver them to deter overt PRC aggression.

Combined Options—To determine force postures and costs, combinations of Asia and NATO strategies must be made. Three illustrative combinations are outlined below and summarized on the enclosed table. The costs are based on required changes to the FYDP Program ($81.6 billion).

1) A full two theater option assuming mobilization only for NATO. It would provide the capability to counter a moderate PRC threat in Asia while maintaining a major NATO reinforcement capability. In the event of a crisis only in Europe, we would have an enhanced capability and be able to meet or exceed the current JCS requirement. Even against the high PRC threat, our NATO reinforcement capability would only be slightly reduced. This option would require about 3 added Army Divisions, 4 Air Force tactical air wings and 1 carrier in addition to the FYDP. The added annual costs would be $2.5 to $3 billion.

2) Assuming we would mobilize for an Asian contingency as well as for NATO and that there would be a 60 to 90 day lag between major contingencies in Asia and NATO, we could meet two major contingencies with fewer forces than option 1. Under these assumptions, the FYDP levels can meet a high Asia threat and once the reserves are ready we would have a major NATO reinforcement. If no mobilization were assumed for Asia, the force could meet a moderate Asian threat, but could only provide limited NATO reinforcements until M+90, when reserve forces become combat ready.

3) If we assume a major conventional conflict in Asia is improbable, and that lesser threats can be met by allied capabilities, we may be willing to accept the risk of a major degradation of our NATO capability should an Asian crisis occur. This option would permit reductions in the FYDP forces. The Army could be reduced by 2 divisions and tactical air levels by 4 Air Force wings and 3 Navy carriers. The savings would be about $2 billion annually. Some limited forces would be retained to meet peculiar Asian needs, but generally, NATO-oriented forces would have to be used in the event of an Asian crisis. Some reductions in war reserve stocks would also be feasible. Once the reserves were mobilized we would again have a capability to reinforce NATO, but it would be below present levels.

Illustrative Alternative General Purpose Forces

		Five Year	Alternative Postures
		Defense Plan	(1)	(2)	(3)
Ground Forces12
	Army Divisions	13-1/3	16-1/3	13-1/3	11
	USMC Divisions	3	3	3	3
	Total Ground Force Divisions	16-1/3	19-1/3	16-1/3	14
Tactical Air Forces (Active)
	USAF (Wings)	21-1/3	26	22	18
	USMC (Wings)	3	3	3	3
	Total Tactical Air Forces	24-1/3	29	25	21
Naval Forces
	Carriers	15	16	15	12
FY 73 Costs13		$23B	$26B	$23B	$21B

Naval Missions and Options

Naval forces normally keep the sea lanes open and support land and air forces in a conflict. They also play a key foreign policy role, demonstrating our commitment and potential military capabilities. The principal Navy missions can be grouped in two categories—Sea Control and Force Projections.

The Navy’s sea control forces consist of its anti-submarine warfare ships and aircraft. Their mission is, with the help of allies, to keep the sea lanes open to Europe and Asia in time of a major war, reducing shipping losses to acceptable levels, so that our forces can be resup-plied and reinforced. In addition, we would try to provide a minimum level of economic shipping for our allies. The primary areas of operation would be the Atlantic and Pacific oceans. The Navy has a sea control mission in the Mediterranean although political/military objectives flowing from the Arab-Israeli crisis are the dominant peacetime concern. Soviet submarines are the primary threat to the sea lanes. In areas closer to the Soviet Union, Soviet missile carrying aircraft also pose a serious threat. The tactical air forces of the Air Force and Navy would be used to counter the air threat.

The Navy’s projection forces consist of its carriers and tactical aircraft and the amphibious shipping for the Marines. These forces have a peacetime and limited war mission as well as a major conflict mission. The sea control mission would be the most critical Navy mission during a major war with the Soviets. In peacetime or lesser conflicts, the projection mission may be more significant.

Naval Force Posture Options—There are no near term ways to improve significantly the abilities of our sea control forces to carry out their missions. The Navy has a large scale modernization effort underway that will improve its capabilities significantly by the late-1970s. The primary issue at the moment is whether to continue retiring the older, World War II vessels in order to make additional funds available for the Navy modernization effort. Alternatively we could retain these older ships for a longer period and reduce the rate of modernization. This would permit us to maintain a larger naval presence and defer reductions in our naval commitment to NATO. Finally, we could retain the present ship inventories while modernizing at the higher rate. This would meet our European political requirements at an added cost of $60 to $370 million in FY 73, depending on the number of ships retained.

A number of optional force postures for the Navy’s projection forces could be considered:

• —Relying on the carriers primarily for limited conflict in the Mid-East and peacetime political influences. The 6th Fleet could be augmented with a third carrier in the event of a major Mid-East crisis. But in a war with the Soviet Union of necessity we would use the carriers for sea control missions in the Atlantic, and make land-based tactical air available to support the southern and northern flanks.
• —Redesigning our forces in the Mediterranean over the next several years to rely primarily on submarines and smaller naval vessels in lieu of carriers. This option has certain military advantages, providing adequate land based air would be available for a conflict. Withdrawing carriers from the Mediterranean could cause serious foreign policy difficulties.
• —Increased reliance on Navy tactical air in some areas in lieu of land-based air. Under this option we would emphasize the Navy’s tactical air role in the Pacific and place reduced reliance on Air Force tactical air forces. The Air Force would orient its mission primarily to NATO, retaining only limited forces for use in an Asian conflict.
• —Amphibious lift is costly to maintain (over $500 million per year). If it is assumed that amphibious assaults may not be needed in a major war with the Soviets or the PRC, or that in light of the reductions in mine sweeping forces and naval gunfire, a major amphibious assault would be difficult and costly to accomplish, we might consider reducing amphibious lift or assign it to the reserves. Given the value of our Marines afloat in the Mediterranean, the Caribbean, and the Pacific to react to minor contingencies, we might wish to retain sufficient amphibious lift to support these missions. This latter option would save about $250 million a year.

Other Factors Influencing Forces and Budgets

Forward Deployments—Political as well as military factors bear on the design of our forces and their deployments. Forces deployed abroad play a key role in buttressing our influence in various regions, in giving allies the confidence necessary to resist accommodations adverse to our interests, and in intra-regional stability and cooperation. From the standpoint of military effectiveness, however, a given deployment may be inefficient or may even pose serious military risks. For example, under current Army planning, the division in Korea would be reduced to a brigade. Equivalent forces based in Hawaii or the U.S. would be available for a wider range of crises and the savings could be put to better use militarily. Yet the larger presence in Korea may lend stability to the region and encouragement to our allies.

Quality or Quantity—A small modernized force may in many cases be more effective militarily than a bigger less modern force. It is difficult to convince allies (or perhaps even potential adversaries) of this fact. Force size is the most visible and easily understood measure of military power and may have a disproportionate impact on allies’ (and perhaps adversaries’) view of our capabilities and the military balance. Therefore, to deter our enemies and maintain allied confidence, it may be necessary to allocate a greater share of our resources to quantity as opposed to quality.

Capability Today Versus Tomorrow—The present Defense program gives priority to modernization programs at the expense of numbers of forces. In FY 72 Defense plans to spend $8 billion on research and development and $17 billion on the procurement of new weapons and equipment. There are cogent reasons for this emphasis.

• —The Soviet Union continues to modernize its forces. We must be prepared to cope with the threat its forces will pose in the late 1970s.
• —The rapid increase in manpower costs and All Volunteer Force program place a premium on ways to get more effectiveness out of our forces while reducing the number of men in uniform.
• —Modernization was neglected in selected areas during Vietnam. Nonetheless, we might consider reduced emphasis on modernization in order to maintain larger forces in the near term. This action would not affect force capabilities today or over the next 2 to 3 years and would provide more immediate deterrence and permit us to maintain larger deployments abroad. But there is a real risk that we would find ourselves at a serious qualitative as well as quantitative disadvantage to the Soviets in five or ten years.

Reduced modernization emphasis would not reduce outlays significantly in the near term because of the lag between program commitment and spending. Thus a sharp cut-back in the modernization component of the FY 73 program would not significantly alleviate our outlay problem until FY 74.

However, a commitment now to a high rate of modernization builds up a high expenditure rate in later years. The effects of inflation and cost growth in sophisticated weapons systems, with long development and production times will, under fixed budgets, cause enormous pressures to cut force levels. This factor should be considered in our program planning.

Low Modernization and Readiness Program—If it is desirable to maintain larger forces and budget pressures preclude providing added resources, a low modernization and readiness program could be developed. The risks of this approach are great, but it would preserve forces with their attendant foreign policy/deterrent impact. This would provide deterrence and presence in the early 1970s at the cost of warfighting capability and effectiveness in the mid-to-late 1970s.

• —By cutting back on manning levels of units, maintenance, and operating levels, FY 72 outlays could be reduced by about $500 million.
• —Cutting back on modernization is another way to reduce outlays, but because of the many months required to develop and produce weapons, reducing the FY 73 program would not reduce outlays significantly until the next year. However, if steps were begun in FY 72 to cancel or postpone R&D and procurement programs, outlay reductions of $1 billion in FY 73 would be possible.

VII. Budgetary Implications of the Defense Program

There are a wide range of estimates of the force and funding levels required to implement the current national security objectives set by the President. At the same time, overall Administration fiscal policy and the increasing demands of other federal programs require consideration of the trade-offs involved in the choice of possible defense program levels.

Overall Fiscal Policy

In approaching the FY 73 budget, the Administration is guided by the President’s decision to achieve a full employment balance with outlays of $249–251B, to provide fiscal stimulation toward planned economic recovery without additional inflationary pressures. Defense outlays at the higher levels being proposed would lead to a full employment revenue deficit unless offsetting cuts are made in non-Defense spending.

Defense recognizes that difficulties would be caused by full employment deficit; however, given the grave risks that would be entailed by large reductions in Defense spending, believe that a deficit, or alternatively, a tax increase should be considered. Defense also points to the positive impact the deficit would have on employment levels and the fact that it would stimulate a higher level of economic activity.

Defense Options

DoD is still developing its five-year defense program that will serve as the basis for the FY 73 budget. However, DoD has prepared two tentative alternative programs based on different outlay ceilings. Neither program has been subjected to a careful program or budget review.

• —The FYDP program prepared within a ceiling of $81.7B in FY 73.
• —Service prepared programs within a ceiling of $79.6B.

In preparing the detailed programs at the $79.6 billion level, the Services were directed to use the following assumptions:

• —No further manpower or force adjustments in FY 72.
• —No FY 73 adjustments in strategic or intelligence programs.
• —No base structure reductions.
• —Vietnam withdrawals continue at current rates.

OMB believes that, recognizing declining SEA costs, anticipated Congressional FY 72 actions and projected pay and price increase in the coming year, a considerably lower FY 1973 Defense budget will continue to support the end FY 1972 force structure, readiness and modernization levels. Therefore, following a budget review, Defense programs priced at $79.6 billion and $81.7 billion can be supported at significantly lower levels.

Defense agrees that the proposed programs require careful review and some reductions may be possible. Also Congressional action may reduce FY 73 outlays, but the scope of these costs cannot be estimated at this time. At the same time some of the reductions made by the Services in getting outlays down to the $79.6 billion level are not acceptable and unprogrammed additions such as SEA air sortie levels have imposed unexpected costs. Therefore, it is premature to state at this time that the FYDP or POM programs can be supported at outlay levels significantly below $81.7 or $79.6 billion.

If adjustments in Defense spending must be made, the following list suggests illustrative reductions as well as additions to the $81.7 billion FYDP level.

		FY 73
Non-Force Reductions		Outlays
	Budget Scrub	–1.0
	Defer Military/Civilian Pay Raises	–1.4
	Reduce Civilian Manpower 10% and Close Bases	–.3 to 1.0
	FY 72 Congressional Reductions	–.5 to 1.0
Modernization
	R&D Reduction to FY 72 Level	–.5
	Procurement Reductions (Includes Safeguard)	–.5
	Readiness	–.4
Force Reductions
	General Purpose Forces (Option 3)	–1.0 or 1.5
	Intelligence	–.3
Program Increases
	FY 72/73 SEA Sorties	+.4 to .6
	Project Transition	+.3
	General Purpose Forces (Option 1)	+1.0 to 2.0
	General Purpose Forces (Options 2)	+.2

Defense Choices and Overall Fiscal Strategy

Within the constraint of balanced full employment budget, alternate Defense funding levels will have a direct impact upon the resources available for non-defense programs. In this context:

• —the proposed FY 73 Defense budget options of $81.7 billion and $79.6 billion would require major reductions in current non-Defense programs (about $5 B).
• —lower FY 73 Defense budget levels would accommodate continuance of a broader range of non-defense programs.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–32, NSC Meeting, DOD Program [Part 2], 8/13/71. Top Secret. The NSC Secretariat distributed the paper to NSC members on August 12.
2. Document 39.
3. NSDM 27 is Document 56. Regarding NSDM 95, see footnote 7, Document 191.
4. These are objective levels which JCS consider to be necessary, in consideration of reasonable attainability and prudent levels of risk, without regard to fiscal constraints. [Footnote in the original.]
5. This program is based on FYDP budget levels ($81.7 billion). [Footnote in the original.]
6. Service-prepared programs based on a DOD budget of $79.6 billion. [Footnote in the original.]
7. Does not include Army separate regiments and brigades. [Footnote in the original.]
8. Includes attack and ASW carriers. [Footnote in the original.]
9. NSSM 84 is scheduled for publication in Foreign Relations, 1969–1976, volume XLI, Western Europe; NATO, 1969–1972.
10. Level depends on Presidential decision regarding withdrawal in FY 73 of 2/3 of one remaining division in Korea. [Footnote in the original.]
11. See footnote 7, Document 181.
12. Separate and independent brigades not included. [Footnote in the original.]
13. Includes all general purpose forces. Excludes support. [Footnote in the original.]