FOREIGN AID AUTHORIZATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00957A000100040031-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 16, 2016
• Document Release Date: July 14, 2005
• Sequence Number: 31
• Publication Date: September 14, 1974
• Content Type: OPEN

In Committee sApproved For Release 2005/07/20
FOREIGN AID AUTHORIZATION
Action-Senate Foreign Relations Committee =ept.
3 reported S 3394 (S Rept 93-1134), the foreign said
authorization bill.
The authorization of $2,527,626,000 for fiscal
1975-$724,600 below the budget request-clearly reflected
the committee's continuing intent to phase out military
grant assistance to all foreign countries and U.S. military
missions abroad, to further extricate the United Stalos
from its involvement in Indochina and to curb some of the
president's discretionary foreign aid powers.
Background
The committee's attempts to reform the foreign aid
program-similar to those it took in 1973-came at a time
of renewed debate over U.S. commitments abroad in lip-ht
of an economic slowdown and near-record inflation at
home. Fueling that debate was the continued controversy
over the scope of the U.S. role in Indochina and the Middle
East and the extension of aid to countries with repressive
governments.
Reflecting the growing controversy over foreign aid,
the Senate in recent years had twice defeated foreign aid
authorization bills. A military and economic authorization
in 1971 was rejected by the Senate, but a substitute
measure cleared Congress early in the next session. In 1972
the Senate defeated the fiscal 1973 military assistance
authorization bill. A second bill died in conference because
of disagreements over Senate policy amendments. As a
result, passage of the regular appropriations bill was
stymied and funding for fiscal 1973 for foreign assistance
had to be provided under a continuing resolution.
In 1973, the Senate authorized military assistance and
economic assistance in two separate bills. While the final
version combined the two assistance areas, military
assistance was authorized only for fiscal 1974 while most
economic assistance was authorized for fiscal 1974 and
1975. But while Congress adopted several revisions of the
economic assistance program, many of the major revisions
for military assistance proposed by the Senate Foreign
Relations Committee were eliminated during floor action or
during the House-Senate conference. (Background, 1ff'73
Almanac p. 816; 1972 Almanac p.44.9, 287; 1971 Almanac p.
408, 387)
Committee Action
S 3394 authorized appropriations for all military
assistance and for economic assistance supplemental to the
authorizations already enacted. In joining both military
and economic assistance in the same bill, the committee
said its action was not inconsistent with its long-term
desire to consider the authorizations in two separate bills.
"This is a unique bill," the committee wrote, "where
military and economic aid issues are inextricably combined.
In Indochina, for example, the committee believes that the
Senate should consider the total flow of U.S. resources into
South Vietnam, Cambodia and Laos and that it would be in-
advisable and confusing to try to deal with policy toward
those countries in separate economic and military aid bills."
The situation regarding aid to the Middle East was similar,
the committee said.
Of the $2.5-billion authorized, the committee ear-
marked $550-million for postwar reconstruction in Indo-
china ($389-million less than the administration had re-
CIA-RDP79-00957A000100040031-2
quested); $585-million ($200-million more than requested)
for security supporting assistance (economic aid to promote
political stability), mostly for the Middle East; $550 million
for military grant assistance (cut by $435-million); $4.55-
million for foreign military credit sales (cut $100-million);
$222-million for development assistance and $26.9-million
for international organizations and programs. The total,
$2,527,626,000, was $724,600 below the budget request.
Key actions taken by the committee included providiint
for a phaseout over three years of all military grant
assis':ante to foreign countries and U.S. military missions
abroad, the imposition of ceilings on all foreign
assis,:ante-both economic and military-to Indochina, and
the repeal or modification of several provisions that gave
wide latitude to the president in overriding or amending
congressional foreign aid directives.
The committee ordered the bill reported (S Rept 93-
1134) Aug. 13 by an 11-5 vote. Committee Chairman J.W.
Fulbright (D Ark.) was one of the five opposing the bill.
(Vote breakdown, box this page)
Major Provisions
Military Assistance
Undaunted by the full Senate's 1973 .reversal of its
recommendation to phase out all military grant assistance
in four years, the committee again recommended that the
assistance program be terminated. To maintain its earlier
timetable, the committee provided for a phaseout to he
completed within three years, by Sept. 30, 1977. (The Sept.
30 date reflected the change in the government fiscal year
as modified by the 1974 budget reform act.)
"At present," the committee wrote, "the far-flung
network of U.S. military assistance advisory groups,
military missions and military groups gives bureaucratic
momentum to the perpetuation of an extensive program the
rationale for which each year has become increasingly
dubious." Asserting that the program led foreign countries
to maintain larger and more expensively equipped military
forces than they would otherwise find necessary, the corn-
mittee said "the program not only escalates the destructive
potential of international conflict but also enhances the
relat .ve power of the military within those societies and
thereby creates undesirable tendencies away from the very
democratic processes which the program.. .was intended to
defend."
Under the bill's provisions, the United States would he
prohibited after Oct. 1, 1977, from extending military grant
assistance, except training, or from sending military per-
sonnel to a foreign country unless Congress specifically
Committee Vote
Following is the 11-5 vote by which the Senate
Foreign Relations Committee reported the fiscal 1975
foreign aid authorization bill:
Aye (11): Democrats Sparkman (Ala.), Pell (R 1.),
McGee (Wyo.), Muskie (Maine), McGovern (S.D.) and
Humphrey (Minn.); Republicans Case (N.J.), Javits
(N.Y.), Scott (Pa.), Pearson (Kan.) and Percy (Ili.).
Nay (5): Democrats Fulbright (Ark.), chairman,
Mansfield (Mont), Church (Idaho) and- Symington
(Mo.); Republican Aiken (Vt.).
Not voting: Griffin (R Mich.).
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PAGE' 2506-Sept. 14, 1974 11 19-, ON rvF`-. .INAI AR .E REY INC
RepreA.rr. n P pr-l... .. pair e+i epl ry etloriol Ienlr
 ~ror F r I ?9P`4g7Ji 0: CIA-RDR79*0b&Ti A 60001 p 11o assistance to Viet-
authorized the iFr u tfi h~ t ire t $1 280 000 000 in fiscal 1?l -X1,115,600,000 less
personnel assigned to a diplomatic mission could not exceed nam a ' ,
25 per cent of the number of such personnel at that missio-N assistance sauthorized byalS $3394; $160 million forncorn-
on June n0, 1974.
To initiate the phaseout, the committee authorizvsl modit.es authorized under the Food for Peace program (PL
$550-million for military grant assistance in fiscal 1975--a 480), and $700-million for military assistance appropriated
sharp cut from the $985-million requested by the ad- under the fiscal 1975 defense appropriations bill.
ministration. The committee split the authorization for economic
assistance among four categories: humanitarian relief ($95-
Foreign Military Sales million), agricultural production ($188-million), industrial
U.S. military assistance to foreign countries would still development ($95.6-million) and miscellaneous, including
be continued through foreign military sales, credits and petroleum ($41.4-million). The bill prohibited the executive
guarantees, the committee said. But the committee aljo branch from transferring any of the funds designated for
pursued its 1973 recommendations to return U.S. arms economic assistance to military assistance, although the
transactions to commercial channels and minimize the reverse would be permissible. S 3394 also prohibited
federal government's role in arms sales negotiations with transferring funds among the four categories of economic
federal government from selling a defense article to an
"economically developed" country if that article were
available through commercial channels in the United
States. A similar provision was. deleted in conference from
the 1973 foreign aid bill. The committee did not define
"economically developed," but it stipulated that the
provisions should not apply to Israel.
The committee criticized the executive branch for f:nil-
ing to get the U.S. government out of the arms sales
business. Its members "feel very strongly that U.S. policies
should be geared to restricting, not expanding, the world
arms trade," the report said. "The U.S. government is far
and away the world's leading arms merchant. Out of nne
side of the government's mouth come pious calls for action
to reduce the world's arms burden. And out of the other side
comes an arms sales pitch to nations around the globe. The
committee hopes that the provision recommended will be a
significant step toward ending this hypocritical
situation...."
The committee established a minimum interest rate
for credits extended to foreign countries for arms sales and
provided a maximum 10-year period for government
guarantees of credit extended by private sources for foreign
arms sales. Both provisions could be waived by the
president, but only under "extraordinary circumstances.
Under no circumstances is the waiver to be used to allow a
concessional interest rate or a guaranty terns longer than 10
years for the purpose of meeting foreign competition," the
committee specified.
Vietnam, Korea Restrictions
In separate provisions, the committee required that
beginning with fiscal 1976 all military assistance to Viet-
nam be funded through the military assistance program
rather than through the Department of Defense as had
been the practice.
The committee also called for a termination of milii;cry
grant and credit assistance to South Korea after Sept. 30,
1977, by setting diminishing ceilings on the amount that
could be extended to that country in fiscal 1975-77. The
committee said it took the action "because of its serious con-
cern about the increasingly repressive measures of the
South Korean government."
Indochina
To reduce U.S. involvement in Indochina, the re m-
mittee set ceilings on the amount of all aid that could be ex-
tended to South Vietnam, Cambodia and Laos and. wrote
definitive guidelines for expenditure of the aid. Ceilings for
Cambodia and Laos had been authorized in the past.
The committee wrote several
provisions into the bill in what it
described as an "overall effort to
restore congressional control over
the,fnreign aid prograrn. and retract
major grants of discretionary
authority over foreign aid matters
which have been given to the presi-
dent in the past."
The committee's $420-million authorization for
economic assistance was $330-million below the budget re-
quest. The committee said the cut was justified because (a)
although the proposal was entitled "Indochina Postwar
Reconstruction," continued fighting limited the possibility
for reconstruction; (b) little money was actually earmarked
by the administration for reconstruction purposes; (c) there
was no comprehensive economic development plan for
South Vietnam and (d) the committee felt the costs pro-
jected for war victim relief were excessive.
The bill further curtailed U.S. involvement in Vietnam
by limiting the government personnel, including contract
employees, that could be used. Within six months of
enactment, U.S. personnel would be limited to 4,000, with a
maximum of 2,500 Defense Department personnel and 800
nationals employed by the U.S. government. Within 12
months that number would he reduced to 3,000, with a max-
imum of 1,500 Defense Department personnel and 500
nationals.
The committee also set ceilings for Cambodia and Laos,
allowing for Cambodia $200-million in military assistance,
$70-million in general economic assistance and $77-million
in T'L 480 commodity assistance, and for Laos $55-million in
military assistance and $45-million in economic assistance.
The total authorization for Cambodia was $231.3-
million below the administration's request. The committee
said the 0130-million economic aid request represented
"padding" in the proposed aid program. It also said its
$191.3-million reduction of the budget request for military
assistance "was influenced by [the committee's] view that
the war in Cambodia is more clearly than ever a civil
war-and one in which the United States is...supplying the
forces on both sides."
1974-11AUE 2507
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The committee cut $46.9-million from aid request; fnr
Laos.
Chile
The committee also placed a ceiling of $65-million on
the assistance that could be provided to Chile in fiscal 1975.
The committee said the limitation was "an expression of the
committee's concern about the continuing disregard for the
protection of human rights" in that country and warned
that it would recommend a cutoff of all aid in future yeas s
unless the situation improved.
Middle East
The committee approved the full administration re-
quest of $100-million for a special requirement fund to meet
unforeseen economic needs in the Middle East. During
hearings on the legislation, the administration said that a
portion of the fund might. be given to Syria. The committee
stipulated that the money from the special fund could not
be used for military assistance and further provided that
the Senate and the House each have 30 days in which to dis-
approve the way in which the president intended to dis-
tribute the funds.
The committee also approved authorizations of $100-
million in military grants, $330-million in military credit
sales and $577.5-million in supporting assistance to the
Middle East countries of Egypt, Israel and Jordan.
Security Supporting Assistance
The committee authorized appropriations of $585,500,-
000 for security supporting assistance (economic aid to
promote political stability), including $250-million-the
amount requested-for Egypt. The assistance represented
the first substantial U.S. aid to that country since its 11,;4;7
year with Israel. The committee also raised the amount of
security supporting assistance requested for Israel from
$50-million to $250-million, saying Israel's "serious
economic situation" justified it.
Congressional Control
The committee wrote several provisions into the bill in
what it described as an "overall effort to restore con-
gressional control over the foreign aid program and retract
major grants of discretionary authority over foreign aid
matters which have been given to the president in the past:"
T:ie major revision was the repeal of a section of the
Foreign Assistance Act of 1961 that allowed the president
to waive any restrictions or requirements authorized by
Congress when he determined that such action was
necessary for the security of the country. The bill also
repealed a section of the same act that allowed the presi-
dent tD draw on Defense Department stocks, up to limits set
each year by Congress, to provide military assistance to
countries beyond that amount specifically approved by
Congress. The bill further prohibited the president from
transferring any economic aid funds to military assistance
purposes and placed limitations on the furnishing of excess
defense articles to foreign countries.
Police Training
The committee also banned the use of any foreign
assistance to provide training or financial support for police
or other internal security forces of a foreign country. The
ban did not apply to narcotics training or to the sharing of
information on crimes such as hijacking. The new provision
expanded language originally written into the fiscal 3.974
authorization bill. I
F 1 G" H T ~ ~ V00W 0,000 FPS ' 01R, N I 'X 0,111 K,
Hearings-Senate Appropriations Subcommittee on
Treasury, Postal Service and General Government Sept.
11 on the Ford administration's request for supplemental
appropriations for presidential transition expenses and
allowances for former President Nixon.
Critics of the $850,000 request fired the opening shuts
in what promised to be a prolonged fight over how much
Nixon should receive after leaving the presidency.
President Ford's Sept. 8 pardon of Nixon was men-
tioned only in passing during the hearing. But. con-
gressional anger and frustration over it were clearly
reflected in several exchanges. (Details of pardon p.^2'4 54)
"We will accord every consideration to the former
president," Subcommittee Chairman Joseph M. Montoya (D
N.M.) told Arthur F. Sampson, administrator of the
General Services Administration (GSA). "But we don't
want to indulge in any excesses."
At another point Montoya declared, "When you went
out to San Clemente (to discuss the amount of the request
with Nixon aides), even though it wasn't winter, you were
given quite a snow job."
Mark 0. Hatfield (It Ore.) asserted that over the past
week his snail and telephone calls from constituents were
"99 and 99-one hundredths per cent" opposed to Congress
allowing all of the request.
"Many thought the Nixon administration was a costly
one," Hatfield said. "And they ask why additional money is
needed"-particularly when Ford was asking the nation to
hold down spending. Those who contacted him thought the
request was "unnecessary and extravagant."
Storage of Tapes, Papers
Part of the request was for $110,000 to store Nixon
papers and tapes in a security vault near Nixon's home at
San Clemente, Calif. Under an agreement signed by Nixon
and Sampson, the former president and the GSA chief each
would have a key to the vault. Both keys would be required
to gain access to the materials.
Hatfield asked whether Congress, in approving funds
for 1. he vault arrangement, might be constructing an
"impediment" to possible subpoena's for tapes and
documents, since Nixon theoretically could refuse to supply
his key.
In such a case, Hatfield asked, would Ford's pardon
prevent contempt of court proceedings against Nixon for
failing to obey a subpoena?
GSA General Counsel Harold S. Trimmer Jr. assured
Hatfield that the pardon covered only Nixon's actions while
in office and would not apply in such an instance.
Under the proposed security arrangement, all of Nix-
on's White House files and tapes would be taken im-
mediately to a location about 10 miles from San Clemente.
During a three-month period, the materials would be
categorized. They would then remain in the vault for five
,years, guarded around the clock.
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PAGE 250814, 1974 r. c,Ni {;. CONGRESSIONA1
kePeuArii . pnl?b -Sept. .n ..-he., n, n {.o e...P~ Ly ?dnoiol aloe nt,