WHAT RUSSIA SPENDS ON DEFENSE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP77M00144R000300060004-2
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 12, 2016
• Document Release Date: April 4, 2002
• Sequence Number: 4
• Publication Date: November 7, 1975
• Content Type: NSPR

Approved For Release 2Q0?/AR,%DRMl10%g060004-2
-.getters to the editor
What Russia spen i
Your stor
con
ni
th
y
cer
ng
e warn-
ings of the secretary of defense
about the size of the Soviet military. budget ("Are the Soviets Really
Outspending U.S.:.an Defense?_
Colby Is Dubious," Oct. 27) contains
several serious distortions 'of my `
views on the matter.
The article states that I agreed in
testimony to Sen. Proxmire that 'dol
lar estimates of Soviet military
costs- "'tend to inflate Russian
expenditures." This is, absolutely
wrong. I have for several years,
?w t rking both at Central intelligence
Agency and Defense Intelligence .
Agency, rejected the dollar costing
methodology because it results in
serious underestimates, not infla-
tions, of the Soviet military budget.
I testified to this clearly to Sen.
Proxmire three months ago. I point.
ed out that under the old costing
methodology, we were estimating a
Soviet military budget of about 6 to
8 percent of G N7? per year and a
growth rate of military budget of 2
to 3 percent. From reviewing im-
proved evidence and the application
of other analytical methodologies; I
believe that the Soviet military bud-
get has been consuming over 15 per-
cent of the GNP, and that this
percentage has been valid for the
past several years.
It has been the view of most De-
LT. GEN. DANIEL 0. GRAHAM-
fense Department analysts for the
past three or four years that esti-
mates of total Soviet military
expenditures have been much too
low.
To illustrate my points, I would
quote an excerpt from my July
testimony to Sen. Proxmire. This
followed my averral that the esti-
mates of Soviet budgets .iiad been
too low:
Chairman Proxmire.: Do you
think there was an average in-
crease in rubles?
Gen. Graham: Oh, yes, if you
are talking in rubles.
Chairman Proxmire: What
was that increase over the past
10 years per year, roughly? Or
give it to-me for the 10-year peri-
od and then divide by 10.
Gen. Graham: For the 10-year
period I would say that the ruble
increase approximated the in-
crease in GNP. I do not arrive at
that conclusion from any com-
plex economic analysis. I am not
an economist.
Chairman Proxmire. Approxi-
mated the Russian increase in
GNP.
Gen. Graham: That is right.
Chairman Proximire: Then it
would be about ~4, S or 6 percent,
something like that in that area.
Gen. Graham: That is right.
Chairman I'roxmlre : I under-
stood you to indicate that there
was a shift in the proportion of
GNP that the Soviet Union was
putting into the military, or was
this a shift in estimate? (De-
leted ).
Gen. Graham: ?r said. that (dew
leted).
Chairman Proxmire: The esti-
mates had been wrong?
Gen. Graham: Yes, sir.
Chairman Proxmire: They
have been consistently spending
at 15 percent?
Gen. Graham: Yes, sir.
(NOTE - Gen. Graham, an as-
sociate of outgoing Defense Secre-
tary James Schlesinger, resigned
this week as director of the Defense
Intelligence Agency.)
Washington, D.C.
Daniel O. Graham,
Lieutenant General, USA
Approved For Release 2002/05/13 : CIA-RDP77M00144R000300060004-2