When Robert S. McNamara became Secretary of Defense he told this committee he received two general instructions from President Kennedy, and they were:

1. Develop the military force structure necessary to support our foreign policy without regard to arbitrary budget ceilings.

2. Procure and operate this force at the lowest possible cost.

I did not always agree with the way Secretary McNamara carried out these instructions, but I agree with the instructions as he related to us. I would like to serve notice, Mr. Secretary, that this committee, which is charged with the responsibility of providing this Nation with an adequate defense, will not sit idly by and see this country's defense determined by arbitrary budget ceilings.

You can dispel this feeling as you go along with your testimony. It appears to me and to other members of the committee that that is exactly what has happened to several programs in this request. Only last week the papers carried the story of the progress claimed by the Russians on the development of their ABM system.

We must maintain the kind of strategic and general purpose forces that will deter the Soviet Union and Red China from starting any conflict, and we are going to examine this procurement request with care to be sure that our posture is adequate.

Now, Mr. Secretary, you and General Wheeler are welcome. You can proceed in any manner you see fit, and we will comply with whatever request you want to make as to the manner of your presentation.

I understand that you have a summarizing kind of a statement, a large printed statement. It will take you some 40 minutes or something, and you have to leave at 12 o'clock.

You do just exactly what you want to do and we will be glad to accommodate you. You, of course, will be back tomorrow, won't you? Secretary LAIRD. Yes.

The CHAIRMAN. You want to leave at 12?

Secretary LAIRD. Off the record, Mr. Chairman. (Discussion off the record.)

The CHAIRMAN. I better not ask you to come back this afternoon. Secretary LAIRD. I am certainly available.

The CHAIRMAN. You will be free to leave at 12. Whenever you want to leave, let us know.

Secretary LAIRD. Off the record, Mr. Chairman.

(Discussion off the record.)

The CHAIRMAN. Back on the record.

You go right ahead, Mr. Secretary.

Gentlemen, we don't want to interrupt the Secretary, and I am generally the one who does it, but I will try to practice what I preach. We will let him read his statement.

Mr. O'KONSKI. Is it possible to take this to our office to read the full text, so that we could save the Secretary some time?

The CHAIRMAN. We have the sanitized statement.

Mr. BLANDFORD. We have the sanitized statement.

Secretary LAIRD. I also had an unclassified copy of this statement delivered to each of your offices. You should have gotten it some weeks ago. It went to each of your offices.

The CHAIRMAN. I prefer that you gentlemen leave this secret document here, and ask you not to copy anything from it, because I don't want to impose these rulings on you. Take the sanitized statement.

If there is any of this secret matter released, let's let the Secretary release it, and let's follow the rules of the game and try to comply with the law as carefully as we can.

Now, Mr. Secretary, you go right ahead.

BIOGRAPHICAL SKETCH OF HON. MELVIN R. LAIRD, SECRETARY OF DEFENSE Melvin R. Laird was nominated as Secretary of Defense by President Richard M. Nixon on January 20, 1969, and was confirmed by the Senate the same day. Secretary Laird was administered the oath of office at a White House ceremony, together with other cabinet members, on January 22, 1969. He formally arrived at the Pentagon for an Armed Forces Full Honors Arrival Ceremony later that day.

When nominated, Secretary Laird represented the Seventh District of Wisconsin in the United States House of Representatives, where he had served continuously since 1952. Before becoming a member of the U.S. Congress, Secretary Laird had been elected to the Wisconsin State Senate in 1946 to succeed his father. He was reelected in 1948.

During World War II, Secretary Laird enlisted in the U.S. Navy in May, 1942. He was commissioned in March, 1944. While in the Navy he served on the destroyer USS Maddox (DD731) in the Pacific, when it was a part of Admiral Mitscher's Task Force 58 of Admiral Halsey's Third Fleet. He is entitled to wear the Purple Heart Medal, the Asiatic-Pacific Campaign Medal with five battle stars. Philippine Liberation Ribbon with one battle star, Japanese Occupation Ribbon, American Campaign Medal and World War II Victory Medal. He left active duty in the rank of Lieutenant (jg) in 1946.

Secretary Laird was born on September 1, 1922, in Omaha, Nebraska. His family moved to Wisconsin the following year and he attended the Marshfield, Wisconsin, public schools, subsequently receiving his B.A. degree from Carleton College in Northfield, Minnesota, in 1944.

Secretary Laird's major interest and Committee work in Congress was in the areas of national security, education and health. He served on the House Appropriations Committee, House Committee on Agriculture and various subcommittees including Defense; Labor; Health, Education and Welfare, and Military Construction. He was Chairman of the House Republic Conference and a member of the Republican Coordinating Committee.

Secretary Laird is author or editor of several books and articles dealing with public policy.

Among numerous honors he has received the 15th Annual Albert Lasker Medical Research Award and the Distinguished Service Award of the American Political Science Association in the 90th Congress. He was presented the Presidential Citation of the 21,000-member American Public Health Association and the Distinguished Service Award of the National Education Association.

Secretary and Mrs. Laird, the former Barbara Masters, were married on October 15, 1945. They have three children-John Osborn, born January 10, 1948; Alison, born July 11, 1951, and David Malcolm, born July 16, 1954.

STATEMENT OF HON. MELVIN R. LAIRD, SECRETARY OF DEFENSE

Secretary LAIRD. Mr. Chairman, members of the committee, I do appreciate your words of welcome this morning. General Wheeler and I will proceed with the general review of the defense posture of the country and our authorization request for fiscal year 1971.

I share your concern over fiscal restraints which have, of necessity, been placed upon the Department of Defense. It is my hope that the Congress will soon take action to modify the limitation which is currently on the statute books pertaining to Federal expenditures.

It is absolutely necessary that there be a modification in the expenditure limitation, otherwise it will mean further reductions even

below those that we have already made in fiscal year 1970. I point this out, Mr. Chairman, because it concerns me greatly. Ninety-six percent of the defense budget is considered controllable, because it isn't based on a formula grant operation at all. Because of the statutory expenditure limitation that is currently on the statue books, we would still have to make further reductions in fiscal year 1970 in order to live within the expenditure limitation, in addition to those cuts which we have already made in fiscal year 1970 of $1.1 billion in expenditures, plus over $8.5 billion in NOA which were suggested by the administration and ordered by the Congress. I believe that the national security of our country would be adversely affected by our making further reductions in order to live within the expenditure limitation which has been established by the Congress.

The President has asked for a modification of this expenditure limitation. You will recall that the expenditure limitation that was enacted by the Congress provided that any cuts made by the Congress would come off the overall expenditure limitation.

Since all of the cuts in the Department of Defense were made beyond the $1.1 billion cut in expenditures for which we sent up a budget amendment in April 1969, the $3 billion is not reflected in the expenditure limitation, but merely reduces the expenditure limitation as fixed by Congress. This makes the problem, as far as the Department of Defense is concerned, a much more difficult one as I am sure members of this committee realize. I hope that in the wisdom of this committee and the Congress, action will be taken to increase the expenditure limitation, because I am sure it was not the intent of the Congress to impose further cuts on the Department of Defense in fiscal year 1970. We have made a total expenditure reduction of $4.1 billion in fiscal year 1970 and an NOA reduction of $8.6 billion, and it does not seem to me that the Congress desired us to take these cuts twice. By not changing the expenditure limitation provisions of the law that was passed by the Congress, we will be forced in many cases to take these cuts twice. I hope the Congress acts soon and favorably upon the amendment requested by the President regarding this matter.

The CHAIRMAN. This came out of the Ways and Means Committee, didn't it?

Secretary LAIRD. That is correct, Mr. Chairman.

The CHAIRMAN. Can this committee take action?

Secretary LAIRD. The amendment would probably have to come out of either the Appropriations Committee or the Ways and Means Committee.

The CHAIRMAN. I think it comes out of the Appropriations Committee.

Secretary LAIRD. It has been suggested that it be attached to the first supplemental appropriation bill in this session of Congress. That would be the vehicle by which this change could be made.

I had not intended to get into the question of fiscal ceilings and fiscal restraints until later in my statement, but in view of the very fine statement made by the chairman of this committee, I felt that we should point out the necessity of making this very important change as far as the expenditure limitation is concerned.

The CHAIRMAN. We will look and see if we have any jurisdiction. If the Appropriations Committee has jurisdiction, we do.

Secretary LAIRD. I have learned since I transferred to the executive branch I should not become involved in disputes between congressional committees. I have tried to stay away from the question of who should handle the military assistance programs, whether it should be the Armed Services Committees, or the Foreign Affairs, and Foreign Relations Committee. I know where I would like to have it handled, but I think it would probably be better if I do not enter into this jurisdictional dispute between committees of Congress. I have enough to do over in the Department of Defense.

The CHAIRMAN. Let me hasten to say, Mr. Secretary, that you got some pretty good experience in legislating when you were on the Appropriations Committee. That committee didn't blush when you were a member, and I am sure you know what I am talking about.

So I can understand why your first love is the Appropriations Committee, because they can do about anything, once they set their

minds to it.

Secretary LAIRD. I didn't mean to imply that the Appropriations Committee was my first love, Mr. Chairman.

The CHAIRMAN. It is a pretty good committee to fall in love with. Thank you, Mr. Secretary.

Secretary LAIRD. Mr. Chairman and members of the committee. I am privileged this morning to present the first Defense program and budget to be prepared entirely by the Nixon administration.

The CHAIRMAN. Are you reading from this big book now?

Secretary LAIRD. Yes, sir.

The CHAIRMAN. From the big book?

Secretary LAIRD. Yes, sir.

The CHAIRMAN. Are you going to tell us what pages you skip over as you go along?

Secretary LAIRD. I will tell you. I am going to read the first page, Mr. Chairman.

The CHAIRMAN. All right, go ahead.

Secretary LAIRD. It is essentially a transitional program and budget, designed to move the Nation's defenses in a safe and orderly way from the national security policies of the 1960's to those deemed more appropriate for the 1970's. In my view, it is a rock bottom budget.

In past years, it has been the practice of the Secretary of Defense to include a detailed discussion of the international situation as part of his initial budget presentation to the Congress. Because President Nixon, in his first annual report on foreign policy submitted to Congress on February 18, has presented a comprehensive global report, I am not including such a discussion in this year's presentation.

President Nixon, in his report, noted that partnership, strength, and a willingness to negotiate are the three pillars required to build a lasting peace. As we move into the 1970's, we have before us the President's goal-to move from confrontation to negotiation, and hopefully, to push on to an era of uninterrupted peace. We have reduced our defense spending to the lowest proportion of the gross national product since before the Korean war; we are removing forces from Vietnam; we have met with the Soviet Union at Helsinki, with the Communist Chinese in Warsaw, and with the North Vietnamese and Vietcong in Paris; and we have also worked with the major powers toward peace in the Middle East.

When we assumed office, I expressed the hope that my success or failure as Secretary of Defense would be judged on whether or not we in the Nixon administration restored peace and were able to maintain it.

As we reduce our defense spending and move further into negotiations, we should have no illusions about the current state of world affairs. I am obliged to report to you, for example, that the Soviet Union is not making similar reductions in its defense budget. In fact, the Soviet Union is pulling abreast of us in many major areas of military strength and ahead of us in others.

The Soviets are continuing the rapid deployment of major strategic offensive weapons systems at a rate that could, by the mid-1970's, place us in a second-rate strategic position with regard to the future security of the free world.

Following the exploratory arms limitation talks in Helsinki, the Soviet Union has agreed to discuss the limitation of strategic weapons systems with us in Vienna beginning in April. Hopefully, success in the strategic arms limitation talks (SALT) will move both our nations well along the road toward the era of uninterrupted peace we all seek. The dividends for our domestic programs could thereby be increased still further.

However, Mr. Chairman and members of this committee, as Secretary of Defense, I must consider actions as well as words. If the current Soviet buildup continues, we will need additional costly steps to preserve an effective deterrent. Pending the outcome of SALT, we must continue those steps which are necessary to preserve our current strategic position. Within that context, this austere fiscal year 1971 budget is designed to preserve the range of options we may need for possible outcomes of the talks, including those we may need if no agreement is reached and Soviet strategic deployments continue at or above the present levels.

The rate of buildup of the Soviet threat and the long leadtime needed to develop and deploy operational systems make it essential that we continue progress on the Safeguard anti-ballistic-missile defense system and initiate a further increment of that system in fiscal year 1971.

Without the Safeguard increment provided by this budget, we would have to face hard decisions about adding to our offensive systems in this transition year, rather than being able to await hoped for progress in SALT and the development of a new 5-year program which will be presented next year.

In my view, the President's decision to go forward with a modified phase II of the defensive Safeguard program will, in the longrun, enhance the prospects for the success of SALT because, in the short run, it allows us to exercise greater restraint in matching a continued Soviet buildup of offensive systems with actions involving our own offensive systems. Safeguard has the added advantage of doing this with minimal spending in fiscal year 1971. I might add the spending on the modified phase II will be less than $100 million in fiscal year 1971.

The President's decision on Safeguard is also essential to preserve our capability to deter Chinese nuclear aggression against our Asian allies without jeopardizing the U.S. civilian population.