DOCUMENTS

DEPARTMENT

GIFT

DEPARTMENT OF

DEFEense

APPROPRIATIONS FOR 1962

1

HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

EIGHTY-SEVENTH CONGRESS

FIRST SESSION

SUBCOMMITTEE ON DEPARTMENT OF DEFENSE APPROPRIATIONS
GEORGE H. MAHON, Texas, Chairman

SAMUEL W. CROSBY and KELLY CAMPBELL, Staff Assistants to the Subcommittee

COMMITTEE ON APPROPRIATIONS

CLARENCE CANNON, Missouri, Chairman

KENNETH SPRANKLE, Clerk and Staff Director

561 A6 87th v. 3

DEPARTMENT OF DEFENSE APPROPRIATIONS DOCUMENTS

FOR 1962

MONDAY, FEBRUARY 20, 1961.

DEFENSE BUDGET SUMMARY

DEPT.

Mr. MAHON. Before we hear the witnesses who are present this morning, I would like to say that Mr. McNamara, the Secretary of Defense, appeared before the committee on February 16. After a brief hearing the committee adjourned out of respect for the memory of the gentleman from Arkansas, Mr. William F. Norrell, a member of this committee.

General Lemnitzer, the Chairman of the Joint Chiefs of Staff, briefed the committee on February 17. The testimony presented on the 16th and 17th by Secretary McNamara and General Lemnitzer will be included in a later volume of the printed hearings.

I asked for a statement from the former Assistant Secretary of Defense (Comptroller), Mr. Franklin B. Lincoln, Jr., on the fiscal aspects of the Defense budget submitted to the Congress on January 16. His statement will be available to the committee and will be placed in the record at this point.

(The statement referred to follows:)

STATEMENT OF FORMER ASSISTANT SECRETARY OF DEFENSE FRANKLIN B.
LINCOLN, JR.

Secretary LINCOLN. Secretary Gates in his statement submitted to this committee outlined the policy framework within which the 1962 budget for the military functions of the Department of Defense was formulated.

DEVELOPMENT OF THE FISCAL YEAR 1962 DEFENSE BUDGET

Even to a greater extent than last year the entire top management of the Defense Department participated in the review of the 1962 budget. The service Secretaries, the Director of Defense Research and Engineering, the Assistant Secretaries of Defense, and the Chiefs of Staff, both in their individual and corporate capacities-together with the Defense Comptroller and his staff assisted the Secretary and Deputy Secretary of Defense in the evaluation of the programs and budgets proposed for 1962.

Last year I stated to this committee that we intended to enlarge and improve on our new working relationship with the Joint Chiefs of Staff organization. This we have done and it has enabled the Joint Chiefs to participate in the 1962 budget review in much greater detail than has ever been feasible in the past. I believe the 1962 program and budget have benefited greatly from this cooperative effort.

Recognizing that each annual Defense budget is essentially another increment of a continuing program, it was decided jointly by the Secretary of Defense and the service Secretaries to use the fiscal year 1961 budget as the initial starting point for the preparation of the 1962 budget. In order to achieve some grading of priorities of various programs or levels of program, the services were requested to develop the fiscal year 1962 budget in four increments:

(a) An "A" budget to support a balanced program of the highest priority requirements, within an amount equal to the fiscal year 1961 new obligational availability (new obligational authority plus transfers from the revolving funds and unprogramed carryovers into fiscal year 1961)-minus 5 percent.

(1)

057

(b) A "B" budget increment consisting of the next highest priority requirements equal to 5 percent of the 1961 obligational availability-bringing the total to the fiscal year 1961 obligational availability.

(c) A "C" budget increment consisting of the next group of highest priority requirements equal to an additional 5 percent of the 1961 obligational availability. (d) A "D" budget increment consisting of all other priority items which were considered by the military departments to be of sufficient importance to warrant serious consideration by the Secretary of Defense.

Each service was asked to screen carefully all going programs to ascertain the necessity for their continuation, and thoroughly review and realign priorities where necessary.

As Secretary Gates pointed out in his statement, it was not considered feasible to make any significant changes in deployments or reductions in the active duty strength of the services. For initial planning purposes, therefore, each service was requested to continue its planned fiscal year 1961 strength through fiscal year 1962.

Attachment A to this statement shows, by service, the initial planning objec tives, the initial service submissions related to those objectives, and the amounts provided in the President's budget-in terms of both new obligational authority and expenditures.

Subsequent to the issuance of the initial planning objectives, the Congress enacted a civilian pay increase and the President later ordered certain additional readiness measures to be undertaken. These unanticipated costs-shown in the third column of attachment A-raised the base from which the service submissions were to be developed by about $260 million. These initial service submissions, including all of the addendum amounts, totaled $50.5 billion in terms of new obligational availability and are shown in the fourth column. In terms of expenditures, they totaled $46.6 billion and are shown in the fifth column. compares to $42 billion in new obligational availability and $42.9 billion in expenditures in the President's budget as shown in the last two columns.

This

Attachment B to this statement provides a comparison, by appropriation, of the total new obligational authority requested by the services with the amounts contained in this budget.

UTILIZATION OF APPROPRIATIONS IN EXCESS OF THE PRESIDENT'S BUDGET REQUEST

FOR FISCAL YEAR 1961

Last year the Congress provided $1,923 million of additional appropriations (excluding a $15.5 million increase in transfer authority) over and above the President's January budget request, offset in large part by congressional reductions of about $1,454 million. Of the total "add-ons" about $1,697 million (less $82 million for the 3 percent across-the-board cut in all procurement appropriations) has been applied to the 1961 financial plan and a net amount of $220 million has been carried over and applied to 1962 program requirements. The details of these transactions appear on attachment C to this statement.

It will be noted from attachment C that $802 million, added by the Congress to the President's January budget, was either requested by the Department of Defense of the House Appropriations Committee or recommended to the Senate Appropriations Committee as shown in the second and third columns. Of the balance, all the additional funds provided for the Army Reserve and National Guard, the Army National Guard technicians program, the promotion of rifle practice, airborne alert capability, and SAMOS, will be used for the purposes intended.

: Of the additional net amount of $158 million (of which $29.5 million was recommended by the Department of Defense to the Senate) for Army modernization, $113 million has been applied to the 1961 program and $45 million has been carried over and applied to the 1962 program.

Of the additional net amount of $382 million provided for POLARIS (of which $153 million was requested in the revised Department of Defense budget), all but $17.5 million has been applied to the 1961 program. The unused portion, representing the cost of long lead-time components for one POLARIS submarine, has been applied to the 1962 program.

Of the additional funds provided for antisubmarine warfare over and above the amount requested in the Department of Defense revised budget and recommended to the Senate, $105 million has been applied to the 1961 program; $111 million, representing the cost of two nuclear-powered attack submarines which were included in the President's budget but eliminated in the April 6, 1960 semiofficial revised budget, has been applied to the 1962 program.

Of the additional net amount of $194 million provided for airlift modernization (of which $150 million was recommended by the Department of Defense to the