SENATE PREPAREDNESS INVESTIGATING SUBCOMMITTEE HEARINGS FOR THE BUREAU OF THE BUDGET

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000400020010-4
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 4
• Document Creation Date: December 15, 2016
• Document Release Date: June 9, 2004
• Sequence Number: 10
• Publication Date: May 25, 1959
• Content Type: MEMO

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2 5 MAY 1959
SUBJ,ECTr Senate Preparedness Investigating Subcommittee
Hearings for the Bureau of the B
1. On 20 May 195 the Preparedness lay
mittee, Senate Armed Services Committee, commenced hearings
to determine the part played by the Bureau of the budget in estab-
lishing the budget submission by the Department of Defense.
Z. Senator Lyndon B. Johnson (D., Teen. ), Chairman of
the Subcommittee, was present for about half of the day's hearings
and and in his absence Senator John Rennie ID. , Miss. ) chaired.
Present for the bureau of the Budget were Mr. Maurice H. Stan.,
Director# Mr. William F. Schaub, Chieef, Military Division;
William F. Finsn, Assistant Director for i naagement and
Operations; and Mr. Ellis IL Veatch, Military Division.
3. Senator Johnson stated the purpose of the hearings to be
the determination whether military expenses were curtailed by
nonmilitary considerations. He requested Mr. Stan* to describe
the part played by the Bureau of the Budget in the Department of
Def+ensee's budget development. Mr. Stans pointed out that the
Bureau of the budget performed a staff function for the President
in reviewing and assisting in the preparation of all budgets of
the Executive branch. He pointed out that there was a difference
between the handling of the Department of Defense's budgets and
r Executive budgets inasmuch as with all civilian agencies
can of the Budget set a dollar limitation on the budgets
he agencies' recourse would be an appeal to the President.
With the Department of Defense, however, Mr. Stans said the
established practice was for the bureau of the Budget to question
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and challenge proposals of the Department of Defense and bring their
question* and recommendations to the Secretary of Defense, but that
in the event of differences where the Secretary of Defense bad reads;
his determination it was up to the bureau of the Budget to make any
appeal to the President. As an example, Mr. Stan* pointed out that
he had questioned the addition of another carrier in the 1960 budget,
that the Secretary of Deefeense had determined that the carrier should
be included and that when Mr. Stans appealed this to the President
the President had confirmed the decision of the Secretary of Defense.
4. Mr. 5tans said he had a Military Division under Mr. Schaub
professionals on the staff, that they started discussions in
year beginning 14 months later, and called
for Department of Defenses submissions by 30 September. The dis-
cussions on the various points taken up continue through October and
maybe into November, and normally the budget in settled early in
December.
S. Mr. Edwin eisi, Sr., counsel for the Subcommittee,
stated that they had bad Information given them that the Bureau of
new was a 'vertical revieew~' of the individual defense
agencies. Mr. Stars said this was not correct and that their review
was a functional review across the whole area of the Department
of Defense and was primarily conducted to coordination with the
Secretary of Defense's office not specifically with the individual
services, although, of course. Individual questions might be responded
to by the services through the Secretary of Defense.
were reviewed in the light of intelligence estimates which were
available to the bureau of the Budget.. Mr. Schaub said the inform
6. Mr. Stan* was asked what information was available to
him to raise questions in the defense programs, and he stated that
he normally had to request reports an defense programs but that they
tion was requested on a need-to-know basis. Mr. Weisi asked how
the Bureau could be sure it had adequate information if it did not have
ready access to all reports and might not know of the existence of
some reports. Mr. Stans said he felt that sufficient information was
furnished him by the Department of Defense at his request to enable
him to perform a satisfactory review and raise questions an a
reasonably informed basis. Mr. Weist said he could not sae how
could be sure of this.
asked if the Bureau of the Budget sat
a dollar limitation on Defense', budget or took Its position on the
budget an the basis of the needs of the Department of Defense.
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Mr. Sans said that the Bureau does not set a ceiling and in no
way interferes or trios to affect strategic planning. He said the
Bureau'a job is to see to the most efficient and effective expenditure
of funds in support of a defense program deemed adequate by the
Secretary of Defense and the President. He said he might question
the used to perform certain tasks and raise questions as to
priorities, speed of action, and questions of investment of fund.
Thus, when the Secretary of Defense submitted a budget for 1960
In excess of $41, 000, 000, 000, the Bureau of the Budget questioned
whether it could not be loss but that the Bureau could not make any
decision in this regard. It performs a fact finding and recommend-
ing function for the President.
S. Senator Stuart Symington (D., Mo. ) proposed the question
that since the Bureau of the budget had no guarantee of getting
detailed information an all programs, could It anything but
recommend purely on a dollar basis. Mr. Stans said the bureau
merely tried to make sure that the Department of Defense gent what
it needed with the fewest number of dollars.
The questioning then turned to the apportionment procedure.
pointed out that he was required by law to approve the
apportioning of funds and that such approval required justification.
In the case of the Department of Defense be said that Bureau of the
Budget did not withhold apportionment an requests from the Secrete
of Defense. The Bureau might raise questions and propose that
apportionment in same cases be delayed for certain purposes or
withheld until a more appropriate time, but if the Secretary of
Defense determined he needed the funds they would be apportioned.
W. Senator Margaret Chase Smith (F., Maine) brought up
several instances which had been reported to her where funds bad
not boon made available for activities approved by the Congress.
Mr.Stan* said the bureau might have raised questions In connection
with these items, but that the decision to withhold the funds would
be rmde by the Secretary of Defense.
It. Senator Stennis mentioned that the Army had requested
funds to modernize weapons and was granted an appropriation f
acquisition of 7. bt rifles and machine guns. He said he understood
that these funds had been withheld by the Bureau. her. Stans said
be had queried whether the Army would in this manner achieve, a
sufficient degree of maderniaation or whether the same funds could
effect more modernization by being put into other programs.
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and that a further portion had been withheld by the Bureau with the
agreement of the Secretary of Defense until further justification
were forthcoming.
13. In connection with the missile program, Mr. 5tan$ said
be had raised certain questions in connection with the Atlas. Titan,
and Minute Man programs in an effort to ascertain whether it was
necessary for all three to goo ahead at the planned level or whether
certain alternative combinations would be preferable. He stated the
decision in this case was that of the Secretary of Defense.
-oceererenont: program bad been withheld b
p
been released, that a portion of them 10e3 been reaeseoeee+ e