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HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

EIGHTY-SECOND CONGRESS

SECOND SESSION

ON

H. R. 7391

MAKING APPROPRIATIONS FOR THE NATIONAL
SECURITY (OCXCIL, THE NATIONAL SECURITY
RESOURCES BOARD, AND FOR MILITARY FUNC-
TIONS ADMINISTERED BY THE NATIONAL MILI-
TARY ESTABLISHMENT FOR THE FISCAL YEAR
ENDING JUNE 30, 1933, AND FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

UNITED STATES

GOVERNMENT PRINTING OFFICE

WASHINGTON : 1952

DOCUMENTS)

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS

JOSEPH C. O'MAHONEY, Wyoming, Chairman CARL HAYDEN, Arizona

HOMER FERGUSON, Michigan RICHARD B. RUSSELL, Georgia

STYLES BRIDGES, New Hampshire DENNIS CHAVEZ, New Mexico

LEVERETT SALTONSTALL, Massachusetts PAT MCCARRAN, Nevada

WILLIAM F. KNOWLAND), California BURNET R. MAYBANK, South Carolina MILTON R. YOUNG, North Dakota LISTER HILL, Alabama

EDWARD J. THYE, Minnesota JOHN L, MCCLELLAN, Arkansas

JOSEPH R. MCCARTHY, Wisconsin

Ex OFFICIO MEMBERS FROM ARMED SERVICES COMMITTEE HARRY F. BYRD, Virginia

WAYNE MORSE, Oregon LYNDON B. JOHNSON, Texas

EVERARD H, Smith, Clerk

II

J60 Aь 82d

v.6

DOCUMENTS

DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1953

MONDAY, FEBRUARY 4, 1952

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C.
The subcommittee met at 10:15 a. m., pursuant to call, in the cau-
cus room of the Senate Office Building, Senator Joseph C. O'Mahoney
chairman of the Armed Services Subcommittee of the Committee on
Appropriations and chairman of the Joint Committee on the Economic
Report) presiding.

Present: Senators O'Mahoney, Chavez, Maybank, Hill, McClellan, Ferguson, Saltonstall, Knowland, Young, and Thye; also present by invitation: Senator McKellar and members of the Joint Committee on the Economic Report, Senator Sparkman, and Representative Bolling

DEPARTMENT OF DEFENSE

ROPRIATIONS

Michigan -35 Hampshire TALL, Massachusetts AND, Californis Vorth Dakota innesota Y, Wisconsin

OFFICE OF THE SECRETARY

OMMITTEE

STATEMENT OF HON. ROBERT A. LOVETT, SECRETARY OF
DEFENSE, ACCOMPANIED BY HON. FRANK PACE, JR., SEC.
RETARY OF THE ARMY; HON. DAN A. KIMBALL, SECRETARY
OF THE NAVY; AND HON. THOMAS K. FINLETTER, SECRE-
TARY OF THE AIR FORCE

ECONOMIC IMPACT OF THE PRESIDENT'S BUDGET

Chairman O'MAHONEY. The committee will please come to order. This public hearing has been called by the Subcommittee on Defense Appropriations for the purpose of hearing in public session the statement of Secretary Lovett about the manner in which the budget before us has been prepared by the Department of Defense.

The Secretary chose to be accompanied by the three Secretaries of the three defense departments, so that there would be full opportunity to discuss the magnitude of the budget, the possibilities for economy, and the steps that have already been taken by the Defense Department to effect economies. The Chair also took the liberty to invite to attend this session the members of the Joint Committee on the Economic Report. This committee has been studying the economie impact of the President's budget. It was felt that they might find it of benefit to participate in the hearing, Jr. Secretary, and to find out precisely how you had constructed the budget that is before us.

It was pointed out, I thought very succinctly and directly, at one of the hearings of the Joint Economic Committee by Professor

M799800

Smithies, of Harvard, that our problem is one of providing adequately for the national defense while at the same time avoiding a deficit, if possible, and doing without taxes sufficient to raise the fund that is necessary to pay for the costs of defense.

OBLIGATIONAL AUTHORITY

I have a very distinct recollection, Mr. Secretary, of your appearance before this committee a year ago, when we called you in public session to discuss the construction of that budget at that time. You then told us that the various departments and bureaus of the widespreading Department of Defense, when called upon by you to give their estimates as to what was needed for expenditure to maintain an adequate defense of the country, asked for a total of something like $102 billion. That you cut down, you and your staff, to someting over $60 billion. The budget which was sent to the Congress by the President at the beginning of this session calls for a total obligational authority for 1953 of $52,066,000,000, as compared with $61 billion in 1952.

That means that in this budget the new authority you are asking for has been reduced from 66.1 percent of the total budget-I said reduced—it has been increased from 66.1 percent of the total budget to 62.2 percent, although it is a reduction of approximately $9 billion in actual outlay.

Meanwhile, on the expenditures side, the President's budget shows that for 1952 expenditures were estimated to amount to $39.8 billion, or 56.1 percent of the total. For 1953 they are estimated to be $52.1 billion, or 60 percent of the total expenditure. Therefore, it appears that while there has been, dollarwise, a reduction of $9 billion in the amount of moneys sought to be appropriated for 1953 for the three military services, there is an estimated increase of something like $11 billion in the expenditures.

I requested the Bureau of the Budget and the Department of Defense to prepare a statement on the unobligated balances of previously appropriated funds as of December 31, 1951. This statement has been presented. I do not intend to put it in the record at this moment, and I want to have copies of it distributed to the various members of the committee, but in due course it will be made a part of the record,

Suflice it to say now that this statement shows a total unobligated balance as of December 31, 1951, of $38,070,000,000.

Among the questions which we shall want to ask, undoubtedly, will be for a review of that unobligated amount and the possibilities of reductions there.

Senator FERGUSON. Vsight I inquire if you have the unexpended balance?

Chairman O'MAHONEY. I have not had time to examine that.
Senator FERGUSON. The Secretary says he has it.
Do you have it as of the 1st of January? What is your date?
Secretary LOVETT. Approximately January 1.

Chairman O'MAHONEY. With this preliminary introduction, Vír. Secretary, the Chair would call upon you to make your statement. The request has been made this year, as last, that the Secretary be permitted to make his statement without interruption, so, unless there is

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