Mr. SCHULTZE. Yes, sir. Chairman PROXMIRE. You feel that way about it, it would be a contribution? Mr. SCHULTZE. I think I do; yes, sir. Chairman PROXMIRE. I like that answer. Thank you very much. You have done a splendid job. Tomorrow, the subcommittee will convene at 9:30 to start off with Senator Fulbright as our first witness, in this room. The subcommittee stands in recess until that time. (Whereupon, at 1:25 p.m., the committee recessed, to reconvene at 9:30 a.m., Wednesday, June 4, 1969.) THE MILITARY BUDGET AND NATIONAL ECONOMIC PRIORITIES WEDNESDAY, JUNE 4, 1969 CONGRESS OF THE UNITED STATES, OF THE JOINT ECONOMIC COMMITTEE, Washington, D.C. The Subcommittee on Economy in Government met, pursuant to adjournment, at 9:35 a.m. in room G-308 (auditorium), New Senate Office Building, Hon. William Proxmire (chairman of the subcommittee) presiding. Present: Senators Proxmire, Sparkman, Symington, and Percy; and Representatives Griffiths, Moorhead, and Conable. Also present: John R. Stark, executive director; Richard F. Kaufman and Robert H. Haveman, economists; and Douglas C. Frechtling, minority economist. Chairman PROXMIRE. The subcommittee will come to order. Today is the second session in the hearings on "The Military Budget and National Economic Priorities," being held by the Subcommittee on Economy in Government of the Joint Economic Committee. These hearings are in response to the recommendation contained in the recent annual report of the Joint Economic Committee which urged the Congress to undertake a comprehensive study of national priorities which would focus on the allocation of Federal revenues between the military and civilian budgets. Yesterday the subcommittee heard from two prominent economists, John Kenneth Galbraith and Charles Schultze. They presented us with stimulating and provocative statements on the role of the military budget, the process by which defense decisions are made, and the means by which the Congress can increase the effectiveness of its constitutional role as guardian of the public purse. Today, we will hear the statements of Senator William Fulbright and three prominent scholars on the matter of national priorities and the impact of defense spending. Senator Fulbright, who is a member of the Joint Economic Committee, will present his statement first and be questioned on it. The subcommittee is honored by his appearance and is looking forward to hearing his views on the matter of national priorities. Following Senator Fulbright, we shall hear a panel of witnesses composed of Kenneth Boulding, of the University of Colorado, a professor of economics and prominent scholar; Dr. Leonard Lecht, director of the Center for Priority Analysis of the National Planning Association; and James Clayton, professor of history at the University of Utah. I welcome all of these gentlemen to this session. In addition to the meeting tomorrow, I would like to announce that the subcommittee will also meet on Friday this week. In the Friday session, which has not been previously announced, we shall hear from former Secretary of the Interior Stewart Udall and Mr. Joseph Califano, a former Defense Department official and special assistant to President Johnson. Senator Fulbright, we are honored and pleased to have you. STATEMENT OF HON. J. WILLIAM FULBRIGHT, U.S. SENATOR FROM Senator FULBRIGHT. Mr. Chairman, I appreciate being given an opportunity to testify at these hearings. I think the subject you are considering goes to the heart of what Government, and our responsibilities as Senators, are all about. I feel that our principal duty, as representatives of the people, is to use our best judgment in charting the Nation's course for the future. The principal instrument for charting that course is the Federal budget, which represents the collective wisdom of two of the three branches of Government. The budget reflects the sense of values of the political leaders under whose direction the budget is prepared, just as the final appropriation bills reflect the values of the dominant elements of the Congress. The magnitude and the complexity of the military budget of our country, and the fragmented organizational structure of the Congress, make it difficult for any one committee to review military spending from the perspective of national priorities, as your committee is doing. I hope that these hearings will focus attention on the structural problem as well as the basic issue of national priorities. The military budget should be subjected to the same detailed scrutiny of Congress that other Federal programs receive. There should be no special privileges or exemptions from accounting in the expenditure of the peoples' taxes, even though it be for military goods. Your hearings focus on the question all Senators and Congressmen should have uppermost in their minds in approaching their responsibilities-what do we want our Nation to be? Do we want it to be a Sparta, or an Athens? Do we want a world of diversity where security is founded on international cooperation, or do we want a Pax Americana? Do we as a people place a greater value on trying to mold foreign societies than we do on eliminating the inequities of our own society? I believe that, contrary to the traditions which have guided our Nation since the days of the Founding Fathers, we are in grave danger of becoming a Sparta bent upon policing the world. The budget tells the story. In the next fiscal year, it is proposed that about $81 billion be spent on a defense force of 3,500,000 men in uniform (plus reserves), 895 ships, 35,000 aircraft, and many thousands of long-range nuclear missiles. If past experience is a guide, supplemental requests will push the total far higher. And with $8 billion budgeted for research and development on new and more sophisticated weapons next year, the budget demands for the military, if met, will easily more than consume any savings that may come from an end to the war in Vietnam. With a military strategy based on fighting two and a half wars at once, and preparation geared to meet a "greater than expected threat" the sky is the limit to meet needs, as seen by military planners. In a recent statement of his defense philosophy, Secretary Laird said that his decisions would be based, not on enemy intentions, but on their capability. If the Soviets adopt the same philosophy, both countries will surely spend themselves into bankruptcy. What does the budget for defense mean in terms of dividing up the pie? It means that, outside of trust fund spending, about 55 cents out of every dollar the Federal Government spends goes to the military. It means that 70 cents of every dollar from general revenue will go for paying for the cost of wars-past, present, and future. It means that over $400 per capita will be spent on the military— an increase of 60 percent in each citizen's bill for the military over the last 5 years. It is not until we look at what is left to take care of domestic needs that the full impact of military spending becomes apparent. Members of this committee, with long experience in studying our Nation's economic and social problems, are acutely aware of the many unmet needs of our society. Education is an example of such a need. Schools from kindergarten to graduate school are overcrowded and underfinanced. Nine billion dollars is authorized for the various programs of the Office of Education in the next fiscal year. Only about one-third the amount authorized, $3.2 billion, is included in the budget. Less is proposed for elementary and secondary education than it costs to assemble an attack carried task force; we have 15 such carriers. More is budgeted for chemical and biological weapons than is to be spent for vocational education. More will be spent on the ABM, taking the military estimate at face value, than will be invested in higher education. Five times as much will be spent on a nuclear carrier as will be provided for libraries and other community services. Six times as much as budgeted for the Air Force's Manned Orbiting Laboratory as is slated for education of the handicapped. This all adds up to the fact that less than $39 per capita is being invested by the Federal Government in the education and training of our citizens, about one-tenth the amount going to the military. I do not believe this is an accurate reflection of the real desires of the American people, but it does reflect the present distribution of power among the bureaucracies of Washington. In the midst of our great affluence, poverty is still a way of life for 23 million Americans. Our cities are going downhill rapidly. There has been much talk, but little action, about how to make cities fit places in which to live again. The Kerner Commission recomendations, so widely hailed a year ago, are still no more than that. The model cities program is budgeted for an amount comparable to that allotted for foreign military aid. Thirteen dollars per capita is the total for all community development and housing programs, about 3 percent of the per capita bill for military activities. If this Nation can afford to pour out $23 billion on missile systems in the last 16 years, and then abandon them, as revealed by Senator Symington earlier this year, surely it can afford to do far more to make the cities liveable. This list could go on. But it would be but a repetition of the same theme. Our system of priorities is cockeyed. By the end of the coming fiscal year we will have spent about $1,250 billion on the military since the end of World II. It has been said that the United States and the Soviets between them possess the equivalent of 15 tons of high explosives for every human being on earth. Yet security eludes us abroad-and at home. The greatest threat to peace and domestic tranquillity is not in Hanoi, Moscow, or Peking, but in our colleges and in ghettoes of cities throughout our land. The state of our real security is evidenced by the fact that it is no longer an extraordinary event for the National Guard or the Army to be called out to control our own people. The Army now boasts that 680,000 men in the Armed Forces have been trained for riot. duty. Largely due to the Congress failure to put first things first in the budget, this training will most likely be put to use in the long, hot summer ahead. I believe that the turmoil on the campuses, the unrest in the cities, and the signs of a taxpayer revolt are not unrelated to the distortion in our national values that seeks world peace and tranquillity through the force of arms. Professor George Wald of Harvard, in speaking of the causes of student unrest put it this way: Just after World War II, a series of new and abnormal procedures came into American life. We regarded them at the time as temporary aberrations. We thought we would get back to normal American life someday. But those procedures have stayed with us now for more than 20 years, and those students of mine have never known anything else. They think those things are normal. They think that we've always had a Pentagon, that we have always had a big Army, and that we have always had a draft. But those are all new things in American life, and I think that they are incompatible with what America meant before. He summed the problem up by saying: I think I know what is bothering the students. I think that what we are up against is a generation that is by no means sure that it has a future. Congress has it within its power to give asurance to our Nation's youth that they do have a future: a future in which their Government puts the happiness and well-being of its citizens above Pax Americana and foreign adventures. I believe there would be far less unrest and divisiveness in our society today if the Congress were as |