any time. That is why we have the great threat in France. There is a strong Communist Party, which has been temporarily, at least, driven back by reason of the economic aid given through the Marshall plan, which has sort of buttressed the economy for awhile, at least.

The same thing has happened in Great Britain, but there is still a very substantial movement, particularly that led by Aneurin Bevan, which would repudiate all military expenditures.

Now, with those facts in mind we have been proceeding upon the theory that without our economic and military aid all of Western Europe will fall to the Communists. I think it probably would.

The question therefore follows: What are we going to do about it, and why and how?

The Communists have told us in their books, as the Secretary has correctly stated, that the best way to destroy the capitalistic world is to destroy the capitalistic economy. They have followed that theory. Wherever they have acted they have followed, for example, two absolutely contrary fiscal policies, in the countries which they were trying to overthrow and in the countries which they have gained.

Now, if we believe, therefore, what the Communists say, that they are engaged in world revolution to overthrow the capitalistic system, then we must believe that this cold war is the war, it is an economic war, and if it be true, as we must all acknowledge, that the nations. of Western Europe, the nations which we have been traditionally ready to call strong world powers, are trembling upon the brink of fiscal collapse, it becomes more important to see that the economy of the United States be preserved.

MILITARY BUDGET REDUCTIONS

If that be the fact, then, as I look at this budget, the only way that we can avoid a deficit is by making a substantial cut on the military or on the so-called national security side of the budget, because the expenditures for 1953, as set forth in the budget, when one adds up the amount set down for the three armed services, for international security and foreign relations, the development of controls for atomic energy, the promotion of that part of the merchant marine which is intended for military purposes, and the major defense programs, including interest on the public debt, and veterans' services and benefits, we have 88.4 percent of the $85.4 billion budget that was sent up to us. The Defense Department showed an awareness of this when it cut $16,000,000,000. It was doing that in order to prevent an undue strain upon the economy.

The White House showed an awareness of that when it cut the additional $3,000,000,000. Our trouble arises from the fact, Mr. Secretary, that you testified to us the other day that you were very fearful that these cuts they have made may have entered the muscle.

Secretary LOVETT. That is correct, Mr. Chairman, I do worry about that.

Senator O'MAHONEY. I do, too. I cannot, therefore, ask you what other cuts would you recommend to this committee, because you say you have already cut into the muscle.

Secretary LOVETT. If I knew any cuts, Mr. Chairman, which could be made logically and without doing positive damage, I assure you I would try to do it, and my colleagues are of the same mind. There

is no difference of opinion between us. We work more or less as a partnership would in approaching this problem of national defense. I think of all the things which trouble you and this committee, the deficit troubles me the least, because, taking what you said earlier as a reliable judgment on the intentions of the Congress, the route of using the tax to reduce the deficit would under no circumstances remove the deficit, there would still be some left, so we are talking really of a deficit of some order of magnitude less that the $14-plus billion. Whether it is $5 billion or $14 billion, we will, I suspect, still have a deficit.

As compared to the problem facing you gentlemen, because you have the whole Government to look at instead of just this one agency, I would be prepared in reliance on the elasticity of our economy, to accept a deficit at this particular time, in order to get over the hump of production and initial preparedness.

I would look for my savings to come at the level-off period which could, perhaps, be accelerated.

Senator O'MAHONEY. When Churchill was here, if I remember correctly, he indicated that the British Government wanted to be advised in advance before any of the air bases to be built or now in construction in Great Britain should be used for the launching of atomic attack. The same fears are entertained by other people, and we have this curious situation in Morocco where the political situation, because of native unrest, is so acute that there is a possibility that the money we spend on bases there may prove not to be militarily advantageous in the last analysis.

I wonder if Secretary Finletter would care to make any comment about that now?

Secretary FINLETTER. With specific reference to the Morocco bases? Senator O'MAHONEY. Yes.

Secretary FINLETTER. The theory of the effort in approaching the question of the bases abroad is that the Air Force base structure is, in general, the weakest aspect.

As far as the strategic operation is concerned, I would like to speak off the record.

(Discussion off the record.)

PERCENTAGE OF BUDGET FOR PROCUREMENT

Senator O'MAHONEY. Last year, when the military bill was completed, the final figures showed that the moneys for procurement constituted about 50 percent of the total figure in the appropriation. What is it now in this budget?

Secretary LOVETT. The total of the military departments and mutual security assistance?

Senator O'MAHONEY. How much of the military department's appropriation is for procurement?

Secretary LOVETT. If you mean title III items, in the case of the Air Force it is around 58 percent. In the case of the Navy is is approximately 50 percent, between 45 and 50 percent. In the case of the Army now it is approximately 25 percent, but because of their large maintenance and operations, it would perhaps be between 25 and 30 percent.

Senator O'MAHONEY. You are running somewhat lower? Secretary LOVETT. And they have a lot of military assistance items. I should say it is something over 50 percent, if you include MSA. Senator O'MAHONEY. When you include procurement for maintenance, it runs considerably above, does it not?

Secretary LOVETT. Yes, sir; it does.

Senator O'MAHONEY. Will you have a table prepared, to be inserted in the record?

Secretary LOVETT. We have a table for the record.

Senator O'MAHONEY. All right; it will be presented and we will have it included.

(The table referred to follows:)