CRITICS RAP PLAN TO SELL OFF KEY MINERALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000604920032-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: May 4, 2012
• Sequence Number: 32
• Publication Date: May 7, 1985
• Content Type: OPEN SOURCE

STAT
Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000604920032-9
WASHINGTON TIMES
7 May 1986
key minerals
Critics rap plan to sell off
By Iris J. Portny
THE WASHINGTON TIMES
Reagan administration officials
and congressional critics squared
off yesterday over an administration
plan to sell strategic materials from
a national defense stockpile to help
balance the budget.
The stockpile is a $10 billion col-
lection of critical minerals and other
commodities - such as silver, chro-
mium, cobalt, manganese, platinum
and industrial diamonds - kept to
support.key U.S. industrial needs if
the United States gets involved in a
long war.
The administration proposed last
July to add more than $3 billion to
the U.S. Treasury over the next five
years by selling off some of the com-
modities, which are now kept in de-
pots across the country managed by
the Federal Emergency Manage-
ment Agency.
But congressional critics say the
plan will hamper U.S. defense
readiness.
"The administration's stockpile
plans appear inconsistent with our
stated military doctrine - military
forces capable of fighting across the
entire spectrum of potential con-
flict," said Rep. Charles Bennett,
'Florida Democrat and chairman of
the House Armed Services subcom-
mittee responsible for overseeing
the defense stockpile.
"If we cannot sustain conven-
tional conflict, a nuclear war be-
comes more likely - a war no one
can win," Mr. Bennett told the Senate
subcommittee on preparedness at a
hearing on the issue.
The national defense stockpile
has been stored by the government
at widely varying levels since its
creatio;i in 1939. Commodity
shortages of imported items, such as
tin and rubber, are regarded by de-
fense experts as having hampered
the U.S. war effort during World War
II and the Korean War.
Mr. Bennett and Sen. James Mc-
Clure, Idaho Republican, the two
leading critics of the administra-
tion's stockpile proposal, joined rep-
resentatives from 12 executive
branch agencies in testifying at the
hearing.
Mr. Bennett and Mr. McClure an-
nounced yesterday that they will in-
troduce legislation that would make
the executive branch more depen-
dent on congressional approval for
its authority to sell items from the
national defense stockpile.
The legislation, to be added to the
defense authorization bill on which
both the House and Senate armed
services committees will soon vote,
would also remove authority for
managing the stockpile from the di-
rector of the Federal Emergency
Management Agency.
The FEMA director now sets
stockpile policy guidelines with the.
2a_1 ice o executive branch a
cies, including the CIA and the de
partments of Commerce Interior,
State and Defense, which wor as a
Und
islation, those agencies would advise
the secretary of defense, who would
assume responsibility.for_ s_tockn?le
22L L
Public debate of the White House
proposal to sell off stockpiled com-
modities has been hampered by an
executive branch decision to keep
classified most of the documents
that led to Mr. Reagan's decision last
year.
Bernard Maguire, assistant direc-
tor of FEMA, said at yesterday's
hearing that "this proposal came
after two years of interagency study
and thousands of hours of review."
He referred to an 800-page report
which had been produced before the
1985 stockpile decision but agreed,
when questioned, that no statement
was ever released regarding the
content of the massive, classified
study. He refused to comment on
what it said.
The General Accounting Office,
at Mr. Bennett's request, is review-
ing the interagency study, which was
done at the direction of the National
Security Council. "Unfortunately,
GAO is having difficulty in obtaining
the cooperation of federal agencies
involved in the study," Mr. Bennett
said.
The White House announced the
plan on July, 8, 1985, was quickly
barred by Congress from imple-
menting it until October 1, 1986, and
is now trying to convince the House
and Senate armed services commit-
tees to include authority to proceed
with its plan in the 1987 defense au-
thorization bill the two committees
are now considering.
The Reagan administration pro-
posal consists of four parts:
? The immediate reduction of
1979 stockpile acquisition goals
from $16.3 billion to $5.4 billion, as
measured in March 1986 prices. The
commodities were valued at $6.7 bil-
lion when the plan was announced in
July 1985.
? The sale, over a five-year period,
of $2.5 billion of the estimated $3.2
billion surplus of commodities now
in the national stockpile.
? The establishment of a double
"tier" system of identifying
stockpile items. Tier I would include
$600 million (originally valued in
1985 at $700 million) of priority com-
modities "not available in sufficient
quantities from domestic or reliable
foreign sources:' Tier II would be a
$4.8 billion (originally $6 billion)
"supplemental reserve."
? The release of $870 million now
kept in the National Defense
Stockpile Transaction Fund to help
reduce the federal deficit and to buy
new commodities.
"Congressional oversight will
help to eliminate the use of the na-
tional defense stockpile for budget-
ary purposes;' Mr. McClure has ar-
gued.
Political considerations, not
budget pressures, are the persistent
spoiler of stockpile management,
according to a former official who
participated in the 1979 Carter ad-
ministration review of defense
stockpile needs.
"Every item on the stockpile list
represents a problem with a specific
solution that doesn't call for
stockpiling," said the former official,
who requested anonymity. "For ex-
ample, platinum is stockpiled. If,
during an emergency, you recycle all
the catalytic converters carried by
American automobiles, you'll have
more than enough platinum for de-
fense production needs.
"The idea that you're going to buy
or sell things ought to be in the pub-
lic domain;' said Mr. Bennett.
"Congress now authorizes the
number and kinds of airplanes,
tanks, artillery tubes and warships.
Why [not also] the strategic and
critical materials needed by our in-
dustry to support our conventional
fighting forces?" he asked.
Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000604920032-9
 Declassified in Part - Sanitized Copy Approved for Release 2012/05/04: CIA-RDP90-00965R000604920032-9
? NATIONAL DEFENSE. STOCKPILE
Inventories and acquisition goals for the 62 strategic commodities - such as bauxite, cobalt, silver, manganese, platinum,
chromium, titanium, tungsten, industrial diamonds, graphite, copper, and tin - now needed for wartime defense production have,
since 1939, jumped up and down. They have never matched. (Figures in billions of 1985 dollars.)
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In 1976 and, 1979, Ford and
July 8, 1985, Reagan proposals
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drops stockpile acquisition
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1954 and 1975 to reflect
U.S. to high acquisition goals.
goals to $6.7 billion. New 'tier
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