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General WHEELER. However, my own view is that probably they are pressing forward in the strategic field as a result of their experience in Cuba in 1962. This committee will recall very clearly at that time we had overwhelming strategic superiority as regards the Soviet Union, both in the field of missiles and, of course, in our bomber force. This was regarded, I think, by them as being a situation that they would never see repeated again, and today they are striving to achieve at least parity with the United States. I believe at least some of the Soviet leaders are trying to achieve a superior strategic position.

Mr. MAHON. At this time when the Russians are building up, we are talking about a transition period and reduced defense spending. While it is not calculated to bring on a state of complacency, isn't the inevitable result going to be that amendments to reduce Defense appropriations and authorizations will have a better chance of being approved?

I am concerned about the atmosphere, the growing trend, and the receding response to it.

General WHEELER. I am concerned, too, Mr. Chairman, because there is an atmosphere of détente abroad in this country and certainly in Europe. In other words, people believe that the Soviet Union no longer constitutes a threat. I have heard people make speeches on this subject, both in Europe and in the United States.

Now, military planners cannot deal in the intentions of a possible enemy. They have to deal with his capabilities. I think it was demonstrated very clearly in August of 1968 in the Czechoslovakian affair that the Soviet leadership will take extreme measure measures which they know will hurt them politically and otherwise-if they think their basic security interests are threatened.

Therefore, I discount very heavily the belief in détente with the Soviet Union that many people express. I think the Soviet Union is posing a continuing military threat to the United States.

I am not worried about this year or even next year, but I am

concerned about where we will be in 1974 and 1975.

DEFENSE REDUCTIONS

Mr. MAHON. Mr. Secretary, is it wise to talk of defense reductions at a time when our opponents are not? Are we in danger of leading the American people to accept reductions in defense programs that we may find cannot prudently be made?

Secretary LAIRD. Mr. Chairman, I do not believe there has ever been a more thorough and exhaustive study of a defense budget than the study which has been made in the last 12 months. We tried to be as forthright as we could with the Congress, and we did make some reductions last year.

We have come up to the Congress with further reductions this year because we understand the prevailing climate, and we understand the need for making reductions. We understand the needs that exist in other areas of our society.

Some people have suggested that it was a mistake for us to be as forthright as we have been in recommending these reductions to the

41-876 0-70-—pt. 1—23

Congress. I believe, however, from my experience here on the Hill, that an honest, forthright budget is the best kind of budget to present to you.

We have submitted to you a rockbottom, barebones budget for fiscal year 1971. I would like to impress upon you and the members of this committee that we are not trying to start an avalanche of reductions simply because we have gone over this budget and pared it down to the figure that you are considering today.

Mr. MAHON. I became a member of the old Army subcommittee back in 1940, and I do not recall, if I may border on the facetious, a Defense budget being submitted that was not termed a rockbottom budget, more or less, in the eyes of those who presented it.

Secretary LAIRD. Í have had experience with 18 budgets, Mr. Chairman.

Mr. MAHON. And they were all submitted as rockbottom, more or less?

Secretary LAIRD. They may have been submitted that way-
Mr. MAHON. Austere.

Secretary LAIRD (continuing). But I know something about this budget. If I were sitting on your side of the table, I would be for increasing it.

Mr. MAHON. This is what I am concerned about, but the atmosphere is not such that you could increase it. We talk about transition and a foreign policy designed to reduce our overseas responsibilities.

This all goes back to my opening worry that an atmosphere is being created which will make it increasingly difficult to get the necessary money to defend this country, and I think defending the country is the No. 1 priority.

With respect to the rock bottom budget, those who do not agree with the Secretary of Defense will argue for sharp reductions. We have to do the best we can to try to create an atmosphere that will make it possible for us to have an adequate defense force and we want to make reductions wherever we safely can.

Secretary LAIRD. Let me address myself to these reductions we have made between fiscal year 1969 and the fiscal year 1971 budget.

amount

In constant fiscal year 1969 dollars, the outlay reduction from fiscal year 1969 and fiscal year 1971 is a total of billion. Of this billion represents a reduction in the incremental costs of the Vietnam conflict, while the remaining $2.3 billion represents reductions in baseline (nonwar) programs.

However, the pay raise, increases in retired pay and price increases have increased costs by $5.9 billion between fiscal year 1969 and fiscal year 1971, and therefore, the reduction in actual outlays is estimated billion.

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That is how we get the - billion of reductions in real terms. But adding back in the cost of the pay and price increases brings the actual reduction to billion, from fiscal year 1969 to fiscal year

1971. I think that is a substantial reduction.

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FORCES IN EUROPE

We get pressures to bring more of our troops back from Europe. In the other body, there has been more talk about that than in the House, and such talk is increasing.

It has been said, if we bring the troops back from Europe, the 300,000-plus, and discharge them, you would have a saving of $14 billion annually

Secretary LAIRD. That would be only if you phased out all the U.S. forces in Europe and those in the United States oriented toward Europe.

Mr. MAHON. And it would make a tremendous contribution to the balance of payment situation.

I am not advocating that. I am trying to elicit your view.

Secretary LAIRD. The figure you cite is a correct one for the overall cost of all of the forces which have a NATO responsibility, both those in Europe and those held in the United States for NATO.

Mr. FLOOD. Are you including dependents?

Secretary LAIRD. This is including all the forces in Europe and those maintained in the United States for NATO purposes. The cost is about $2.9 billon just for the forces stationed in Europe.

Mr. FLOOD. You are including dependents?

Secretary LAIRD. That includes all costs-family allowances, dependents, housing, all the pay of military and civilian personnel-all

costs.

Deactivating all of the U.S. forces oriented toward Europe would, of course, reduce the size of the Active Army drastically, because of many of our divisions in the United States have a NATO responsibility. I think that sometimes when people use that $14 billion figure, they do not understand, because it is related to NATO, how many of our forces within the United States are encompassed within that cost figure.

I would also like to say that the $14 billion figure includes in addition to the costs of the forces stationed within Europe proper, all of the costs of the 6th Fleet. I have an outline of it here.

Mr. MAHON. I wish you would put it in the record, and make it very clear so there can be no doubt about it.

Secretary LAIRD. That figure was estimated in order to answer a question that was directed to our Comptroller, to put all costs that were European-related in one place.

We have included all the costs in that figure. That is a correct answer, but I think one should understand what is involved in it.

Mr. MAHON. I think I do, but I think the record ought to make it clear. I would like to know what would be the reduction in military personnel in all the Services in this $14 billion figure. You would have to discharge a lot of persons from the Army, Navy, and Air Force. If you will provide that figure in the record here.

Mr. FLOOD. But be sure and show the effects upon the Zone of the Interior in this $14 billion. It is not just Europe. It is not just the Mediterranean. How will the Zone of the Interior be affected?

Secretary LAIRD. That figure includes the costs of the training base as well as other costs involved with the Europe-oriented forces here in the United States. I want people to understand that. We will give a complete explanation.

(The information follows:)

The estimated annual operating costs of maintaining U.S. forces in Western Europe is approximately $2.9 billion. Accounting records are not maintained to reflect costs on an area basis, therefore, these costs are necessarily based on the use of appropriate factors. This $2.9 billion figure includes the cost of all military and civilian personel located in Western Europe, Greece, Turkey, and the 6th Fleet, and the costs of operating and maintaining facilities used by such personnel. The fiscal year 1971 Defense budget includes approximately $14 billion for the support of U.S. general purpose forces in Europe and U.S. general purpose forces not in Europe but maintained in the United States for use in an European contingency. The $14 billion includes operating costs and estimated annual investment in equipment and military construction and represents approximately what would be saved if all of the U.S.-NATO oriented forces and support requirements were entirely dropped and were not in existence during the fiscal year 1971 funding period.

However, if we return all U.S. forces to the United States and kept them intact and ready for rapid return to Europe, our budget costs would be greater than those we incur by keeping the forces in Europe. It would be necessary to provide the forces two sets of equipment, one set in their hands in the United States to enable them to maintain their combat readiness, and another set in Europe for our use in combat. In fact, because of the practical limits on the prepositioning of equipment and on the feasibility of acquiring all the necessary mobility forces we would have very limited capability for war unless we had a warning time of several months.

VIETNAMIZATION PROGRAM

Mr. MAHON. Mr. Secretary, the war ended in Europe in 1945, and we still have a vast force there which some claim is costing $14 billion a year.

The war ended in Korea in the mid-1950's. We still have a couple of divisions there.

We talk about Vietnamization, and we hope it works and we think it certainly should be given full support.

I have assumed that you feel, and that General Wheeler feels, that we will have a sizable force of several thousand in Vietnam for years to come, and that while we are going down from 500,000, there will be a time when we feel we cannot safely reduce to a lower figure. Am I correct?

Secretary LAIRD. I pointed out yesterday that there were three phases to our Vietnamization program.

The first phase is to transfer the U.S. ground combat responsibility; the second phase involves the transfer of logistic and support activities; and the third involves a military advisory group.

I want it made very clear that the President has stated that this question is negotiable in Paris; that the Vietnamization program does not preclude the possibility of negotiations concerning the creation of an international force, or some other type of arrangement, in Vietnam. I do not want to preclude progress in negotiations.

I do not look with much optimism toward the route of negotiating out all American forces in Vietnam, but I do not want to say to this committee that it is not a matter for negotiation. We are available to negotiate and we have made our position very clear.

I agree with you that on the basis of Vietnamization alone, when we get down to the third phase we will have a military presence in Vietnam. It will be a military advisory group that will be required, as far as our country is concerned, in this Phase 3 program. Mr. FLOOD. I might draw some analogy to Korea.

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