98. Memorandum From Secretary of State Rogers to President Nixon1
SUBJECT
- Security Assistance
Today I forwarded to the Director, Office of Management and Budget, my recommendations for the FY 1974 Security Assistance budget as well as certain proposals on the reorganization and restructuring of that program.2 These proposals support the Security Assistance legislation that you transmitted to the Congress in April, 1971.
Narrow victories and the frustration of indecision in the Congress this year have convinced me that we must make fundamental changes in the Security Assistance Program or the Congress may fail to reenact it. In order to rally new support, I propose three rather dramatic changes in the FY 1974 program.
First, I recommend legislation to place our Military Education and Training Program on a permanent basis and apart from regular grant military assistance. This legislation, the “International Military Education and Training Program,” would be a separate chapter of the Foreign Assistance Act. Heretofore we have financed training through our grant military assistance program. Nearly fifty nations participate, and only half of these also receive materiel grants; yet when we place both types of assistance in one military grant category, Members of Congress and the public gain the impression that we are providing materiel support to many more nations than in fact we do. This new legislation should remove the chance for misunderstanding while it places military training on the same legislative basis as its civilian counterpart, the Mutual Education and Cultural Exchange Act of 1961.
Second, I propose to reduce the number of nations currently receiving materiel grants. Consistently we have justified this assistance on the logic that we give help to friendly nations which do not have the economic resources to support their own defense requirements. By the same reasoning, we no longer should provide grant materiel support to a nation whose economy has grown to the point where grant assistance no longer is required.
[Page 238]Greece and the Republic of China are the two most important nations that I propose to eliminate from the grant program. Both have made gratifying economic progress, and our military materiel contributions to their defense costs are small. In FY 1972, after Congressional cuts, we provided $11 million to the Republic of China and $10 million to Greece. We probably will not be able to do as well in FY 1973 because of the constraints imposed by the continuing resolution authority.
The Department of Defense has reservations about abruptly terminating materiel aid to Greece, notwithstanding the reasons presented above, because of the potential impact on home-porting arrangements now being negotiated by the United States Navy. I believe, however, that adverse impact can be avoided through careful diplomatic preparation for the announcement, and by expanding the credit arrangements we make available to Greece for the purchase of military equipment, which we estimate will be $70 million in FY 1974. Likewise the Department of Defense would rather not terminate abruptly our grant military assistance to the Republic of China in FY 1974 because of the psychological blows that these, our friends, have received of late, the assistance they have given to our military forces, and the essential role the Republic of China plays in our western Pacific and Asian strategy. These are valid arguments. But I believe we can explain to the Republic of China through careful diplomatic consultation that our action does not represent any change in policy toward them but is dictated by Congressional considerations that affect the Security Assistance Program as a whole. We would provide greater credits for the sale of military equipment, estimated to be $75 million in FY 1974, continue to help them with the assembly on Taiwan of military equipment that they purchase from us, and give evidence of interest and co-operation such as we expressed recently in the transfer of two training submarines and as we contemplate in the transfer of a rather large number of medium tanks. Furthermore, we will continue to offer education and training programs to military people from both Greece and Taiwan on a grant basis, and we also will make available to them excess military equipment.
I propose further to terminate the military aid program to Liberia and to six Latin American nations. Each program involves less than a million dollars; in all cases we propose to continue training and excess defense article transfers. In Latin America we would continue to provide grant military assistance to Bolivia, Guatemala, Panama, and Uruguay, and we would establish a small regional fund to furnish emergency assistance to the other Latin American nations.
I feel certain that this reduction in the number of nations to which we would give grant military assistance will encourage Congressional support for the FY 1974 program.
Finally, I recommend that we eliminate Spain and Portugal from the grant military aid program. In both cases our grant assistance is justified [Page 239] not because of the economic necessity to help either nation finance its defense expenditures, but as a consequence of a defense base right requirement. Congressional leaders often criticize us for not explaining these programs as a payment for our right to use certain bases, but if we do so then we bring into question the logic of grant programs in general. It appears to me that the more reasonable alternative is to let the Department of Defense finance such rent. The Secretary of Defense concurs in doing so. We both recognize difficulties that may result. This action would transfer consideration of authorizations to other committees, and we must work with key committee chairmen in Congress to explain what we seek to do, particularly before public announcement of such a proposal. We also would invite questioning about other nations, particularly Ethiopia, where our aid partly is compensation for a defense base right requirement and partly a more traditional kind of military assistance. I feel we can handle these difficulties and thereby defend the program more easily than we do now.
I seek your support for these recommendations. I would welcome an opportunity for Curtis Tarr and myself to discuss the FY 1974 Security Assistance Program and these proposals with you.