Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

10. Action Memorandum From the President’s Assistant for National Security Affairs (Kissinger) to President Nixon ¹

Washington, May 22, 1969.

SUBJECT

• Your Foreign Aid Program

Issues

Attached are six items on the FY 1970 aid program which require your early attention. Congressional hearings on aid begin next Monday and you are scheduled to brief the Congressional leadership on Thursday.²

Two items on which there is disagreement require your decision:

1. A proposal to eliminate some of the country prohibitions contained in the present AID legislation. (Budget Bureau memorandum at Tab A.)

2. A proposal to include an additional $108 million of military assistance for Korea in your budget request. (Separate package at Tab B.)³

There are two items agreed by all relevant parties on which your decision is also needed:

3. A proposal that you announce in the message the formation of a Presidential Commission or Task Force on aid. (AID memo at Tab C.)

4. A proposal that you announce in the message a decision to launch a special study of the Hickenlooper Amendment. (State Department memo at Tab D.)

Also attached are two items for your presentation of the aid program:

5. A draft of your message to Congress transmitting the new legislation (Tab E), (which ought to go up on Friday).

6. Talking points for your meeting with the Congressional leadership, a briefing paper on the program itself, and a set of questions and suggested answers on the program (Tab F).

Disagreed Issues

1. The proposed bill omits or changes, in substance or in form, a number of restrictions on the aid program written into the law by Congress over the years. These are mainly prohibitions on aid to countries taking specific actions against the United States. (For example, defaulting on debt to U.S. citizens or preparing for military aggression against us.) Only two of the changes are of substantive importance to the program. The Budget Bureau memorandum (Tab A) analyzes each proposed modification in detail.

All but one agency agrees and the other is neutral that you should seek all of these changes. The major arguments for doing so are:

1. The restrictions shift exercise of foreign policy prerogatives from the President to the Congress and reduce the President’s flexibility in specific cases.

2. The new Administration has a chance to get rid of them now but will have a reduced opportunity to do so in the future if it does not seek to change them in its first aid bill.

3. The changes would simplify administration of aid.

An effort to get all of the changes, however, would cause domestic political problems. The request could be interpreted, both in the Congress and by the public, as an Administration effort to eliminate laws which protect the interests of the United States. And, in practice, the restrictions have had little effect on the actual operation of the aid program.

Arthur Burns and I have discussed this issue (and the other issues of concern to him on the bill, all of which have been satisfactorily resolved). We agree that it weighs a marginal gain against a risk which is also probably marginal but could turn out to be serious.

Recommendation

On balance, I think it would be a good idea to rid ourselves of these restrictions. However, if you think there is any political price, I agree with Arthur Burns that we should not take the risk. This is a political judgment.

Seek modifications

Not seek modifications⁴

2. Attached at Tab B is a detailed analysis of Secretary Laird’s proposal to add $108 million of military assistance (in addition to the already programmed $139 million) for Korea to your aid request.

Budget Bureau and State oppose this additional amount, arguing inter alia that: 1) it will run into substantial Congressional opposition; 2) there is already some $230 million in the pipeline; 3) the items programmed under the increase do not really relate to the threat posed by the EC-121 incident.⁵

Laird argues that an increase would: 1) be an unequivocal response to the EC-121 shootdown, (Kissinger note: particularly in light of the delay in reinitiating reconnaissance flights); 2) reassure the South Koreans; 3) the equipment is needed. On balance, I slightly favor the Laird proposal.

Recommendation

That you approve adding $108 million to the FY 1970 aid request.

Approve addition⁶

Disapprove addition

Issues Agreed But Requiring Your Decision

3. AID’s memorandum at Tab C proposes that you appoint a Commission or Task Force to conduct a thorough appraisal of the U.S. aid program. At a meeting on Monday, there was general agreement that it would be preferable to set up a Task Force or Study Group, rather than a Commission, on the grounds that a report from such a group would be less likely to commit you to a particular course of action.

The most important suggestions made in the AID memorandum are as follows (my comments are in parentheses):

(a) The report should focus on both the objectives of the aid program and the scale and form of assistance necessary to achieve those objectives. (The relationship to foreign policy is clearly articulated. The memorandum also envisages a number of fairly detailed specific tasks for the study, however, which could easily dilute its focus on objectives and make it appear to duplicate the many reports already completed on specifics. The focus should be on basic objectives and foreign policy.)

(b) The Commission or Task Force should not include representatives from either the legislative or executive branches of the Government. (Ross Adair has personally made the same suggestion to my staff.)

(c) Several possibilities are mentioned for the chairmanship, most prominently J. Irwin Miller, President of the Cummins Engine Company of Indiana. He chaired President Johnson’s Commission on East-West Trade in 1965 and is by all accounts an exceptionally able individual. Other AID suggestions are Dan Parker, Arjay Miller, Bill Blackie, Rudolph Peterson, and Bill Scranton. (An interagency group comprising State, Commerce, Agriculture, STR, and my staff suggests Irwin Miller as the best man to chair the Commission on Trade Policy, which you decided upon at the NSC meeting on trade policy,⁷ so I suggest we turn to one of the other names for this one.)

(d) The staff should be based at Brookings, although organized specifically for this task with a staff director and members drawn from all over the country. Secretary Laird opposes even this link to Brookings. (I, too, have doubts about Brookings. More work is needed before we can decide on the staffing.)⁸

Recommendations

That you announce in the Aid Message that you have decided to appoint a Presidential Task Force to study the future of the U.S. aid program. (If you wish to enhance the prestige of the study and your personal commitment to its findings, you could label the group a Commission.)

Approve Task Force⁹

Approve Commission

Disapprove both

That I inform AID that your approval of the Task Force (or Commission) does not imply approval of every specific suggestion in their memorandum; that you wish to make the final decisions yourself on the terms of reference, membership, and staff; and that they should submit alternatives on each aspect shortly.

Approve¹⁰

Disapprove

4. Secretary Rogers feels strongly that we should make no effort now to amend the Hickenlooper Amendment because such an effort would complicate the Peru crisis, appear as a surrender to Peruvian intransigence, and because no substantial weakening could get Congressional support at this time.¹¹

At the same time, the State Department does not wish to imply that the Administration favors Hickenlooper. Under Secretary Johnson thus recommends (at Tab D) that you indicate in your Foreign Aid Message an intention to order a special study of the Hickenlooper problem and, specifically, a willingness to entertain changes if they are recommended to you.

I agree that a special study of Hickenlooper would make sense. However, whether you should mention it in the message depends largely on how you want to proceed on Peru. If you want to follow State’s recommendation to continue to defer a confrontation, mentioning the Hickenlooper study would be helpful in establishing a climate for doing so. Moreover, it would demonstrate your open-minded approach to the Latins and win some points with liberal Senators. On the other hand, if you are not willing to continue to defer a confrontation, mentioning the Hickenlooper study would weaken your position.

Recommendation

That you order a study of the Hickenlooper Amendment.

Approve¹²

Disapprove

Depending on how you want to proceed on Peru,

1. That you mention the Hickenlooper study in the message

2. That you do not mention the Hickenlooper study¹³

The message and the briefing material for the Congressional consultations focus on the changes in the program which you directed at the NSC meeting on aid:¹⁴ a new emphasis on private sector participation, including a proposal for an Overseas Private Investment Corporation; increased emphasis on technical assistance with a new AID bureau to operate it; further emphasis on greater participation by other advanced countries; a functional emphasis on the food-population equation; and a frank recognition that we need to know more about aid, with a Presidential Commission or Task Force appointed to help in that effort. The proposed talking points, briefing memo, and set of questions and answers appended at Tab F give you the necessary background on these issues.

I think the message contains enough new rhetoric to be saleable. However, we must recognize that the program being proposed does not differ very much from the past. We thus need to stress our continuing review of aid but must be careful not to diminish support for the present bill by playing that theme too hard.

Recommendation

That you approve the proposed Foreign Aid Message to Congress (Tab E), subject to amendment based on your decisions on the issues listed above.

Approve¹⁵

Approve with changes as noted

See me

1. Source: National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 324, President’s Foreign Aid Program. Secret. A handwritten note, with a May 27 date, reads: “Pres has seen.” This memorandum is attached to a May 21 memorandum from Bergsten to Kissinger recommending that Kissinger “urgently” send the attached package to the President and that no specific reference to Latin America be added to the draft message to Congress. A note on Bergsten’s memorandum reads: “Retd from HAK 5/22.”
2. The meeting with the Congressional leadership took place on Tuesday, May 27; see footnote 6, Document 8. None of the tabs is printed.
3. In the left margin next to item 2, the President wrote, “for.”
4. President Nixon initialed this option.
5. On April 14 a Navy EC-121 reconnaissance aircraft flying from Japan to the Republic of Korea was shot down by North Korea off the Korean coast.
6. President Nixon initialed this option.
7. Reference is to the April 9 NSC meeting; see Document 192.
8. On November 8, 1972, Haig sent a memorandum to President Nixon stating that “as a result of long standing instructions, we have prohibited out-of-house contract work related to national security affairs with the Brookings Institution.” Haig noted, however, that Rumsfeld had informed him that as a result of a recent meeting between the President and Brookings President Kermit Gordon some contracting would be permitted. Haig indicated there was pending with ACDA an arms control issue on which Brookings was particularly qualified, and requested permission for ACDA to contract with Brookings. Haldeman initialed the “Disapprove” option and wrote, “P. has ordered that the long-standing instruction still stand.” (National Archives, Nixon Presidential Materials, NSC Files, Subject Files, Box 309, Brookings Institution)
9. President Nixon initialed this option.
10. President Nixon initialed this option.
11. For documentation on the investment dispute with Peru and the debate over application of the Hickenlooper Amendment, see Documents 148 ff.
12. President Nixon initialed this option.
13. President Nixon initialed this option. No mention of such a study is in the March 28 message to Congress.
14. Reference is to the March 26 NSC meeting; see Documents 5 and 6.
15. President Nixon initialed this option. His message was sent to Congress on May 28; see footnote 7, Document 8.