Kennedy: The Classic Biography (76 page)

1. First, while quietly accepting the necessity of unbalanced budgets, he made clear that he was no wastrel. To the despair of the liberals, he talked the lingo of the Budget-balancers even as he incurred sizable deficits. It was Kennedy’s only means, as Paul Samuelson pointed out, of “quieting irrational opposition” to his Budget increases. He stressed his objective of balancing the Budget “over the cycle” of good years and bad combined. He said all the right phrases about getting “a dollar of service for the dollars we spend.” He stressed in 1961 that his domestic program, of and by itself, would not unbalance the Budget his predecessor left behind, in 1962 that his Budget as presented was in balance, and even in 1963 that his Budget, although in deficit due to the proposed tax cut and military and space expenditures, nevertheless reduced “civilian” spending.

While none of these statements was false, they were no more “the whole truth and nothing but the truth” than any other Presidential Budget statement in modern history. They imposed ceilings on those of us helping to prepare his budgets and legislation, but within those ceilings there were a number of ways in which the figures could be fitted without drastically altering major programs. The Budget is only a set of estimates—of how much taxes will bring in, how many contracts will be let before the fiscal year ends, at what date new programs will be started, which payments can be speeded up or deferred, and many other unknowns. Those estimates depend on other estimates—of the economy that produces the revenue, of the weather that affects the crops, of the wars that change defense spending—and those estimates are based on still more estimates.

Low ceilings, in short, can still permit several rooms. The best example was the badly unbalanced “balanced” Budget President Eisenhower left behind for Kennedy’s first full fiscal year. It assumed prosperity revenues at a time of recession. It recommended projects and programs for which no funds were included. It assumed, contrary to all experience, that a proposed postal rate increase would be approved by the Congress and in effect within ten weeks. It greatly underestimated expenditures for farm price supports. It proposed, with tongue in cheek, that Congress would terminate or sharply cut back several basic housing, airport, REA and other programs which everyone knew Congress would expand. And it omitted certain financial obligations to which the Federal Government was wholly committed. I can truthfully say that no Kennedy Budget ever resorted to this extreme to feign fiscal responsibility.

But to the surprise of many of his appointees, President Kennedy not only talked but acted the role of true economizer. His two chief tasks upon taking office were to revive the economy and shore up our defenses, and neither could be accomplished by slashing a wholly inadequate Budget. But he regarded deficits necessitated by excessive unemployment as wholly different from deficits produced by uncontrolled spending, and he had no intention of permitting the latter. “Washington is filled,” he observed, “with dedicated men and women who feel that government funds should be spent for one purpose or another,” and he intended to make certain they were his purposes. Leaving most program funds relatively untouched, he was suspicious of all personnel requests, and he was willing to start with the White House, cutting back on the grounds and service personnel and keeping expenses down. (Judging from his delight over a letter Thomas Jefferson had written requesting White House gardeners who could double as musicians after dinner, he may have had similar proposals in mind.)

He personally scrutinized every agency request with a cold eye and encouraged his Budget Director to say “no.” From the amounts requested by the individual agency heads and service chiefs, the President and his Budget Director (aided, in the latter case, by his Defense Secretary) cut as much as $20-25 billion before each Budget was submitted to the Congress. He increased funds actually allocated for true social and economic benefits faster than his predecessor; but, by reducing the postal deficit through higher rates, by avoiding higher storage costs for surplus grain and cotton, by selling mortgages and other Federal financial assets to private creditors, by increasing automation in the Post Office and other agencies, by putting the Interstate Highway program back on a self-financing basis through increased truck and gas taxes, by requiring the agencies to absorb through other reductions nearly half the cost of their Federal pay raise, by clamping down on personnel increases, by abolishing unnecessary operations and offices, by not spending all the moneys appropriated by the Congress, and by holding the cost of new domestic programs to the lowest possible level, he was able to show in 1963 a cumulative increase in “domestic civilian expenditures” over his three years smaller than the increase over the preceding three Eisenhower years. To do that, while adding new programs and expanding old ones, was quite a feat. The reduction in domestic spending proposed in January, 1963, had, in fact, been accomplished only four times in the preceding fifteen years.

He learned anew, however, that most members of Congress favored economy only where it did not impinge upon their own interests. Many of those who forced him to ask constantly for increases in the artificial ceiling on the public debt were far more willing to vote unwanted funds for military or farm programs than to raise postal rates, close tax loopholes, charge barges for their use of Federally financed waterways or restrict farm surpluses. Fiscal years 1962 and 1963 produced deficits, instead of the balances predicted, largely because of lagging recession revenues and increased defense and space spending, but also because of Congressional opposition to Kennedy’s farm and revenue measures.

President Kennedy’s largest and most controversial savings were in the area of his largest expenditure increases—national defense. The Budget Bureau estimated that the first-year costs of our entire new legislative programs in 1963 were not so great as the annual savings already being achieved in the Pentagon. Those savings were achieved through more efficient logistics, organization and procurement, through the reduction of civilian personnel to their lowest levels since pre-Korean days, through the termination of obsolescent or unworkable weapons systems and bases, and primarily through the managerial genius of the Secretary of Defense and the political courage of the President who backed him.

Robert McNamara found a chaotic budget situation when he entered the Pentagon. In practice each service submitted and received individual budgets largely unrelated to each other, with no logical analyses of how much fire power was actually needed. He found no internal consistency—no matching of our available forces with all the elaborate NSC planning papers, war plans and contingency plans, no correlation between ground forces and air support, or between munitions and men. He began immediately to question, to study, to plan, and he began to build and to cut simultaneously.

On occasion Kennedy’s budget, science and other White House advisers would press for even more reductions in weapons systems than the Secretary would support. McNamara, while acknowledging the possibility of surplus destructive capacity or “overkill” in his recommendations, frankly told the President that neither of them could count on the continued confidence of the service chiefs if much more was cut. As it was, the Air Force, its contractors and friends in the Congress resented the cutback in the B-70, the phase-out of the B-47 and Snark missile and the cancellation of further Titan missiles, of Skybolt and of the nuclear-powered plane; the Army and its friends resented the limitations on the Nike-Zeus antimissile missile; and the Navy and its friends resented his hostility to more carriers.

The “military-industrial” complex, of which Eisenhower’s farewell message warned in one of his greatest services as President—a complex combining powerful economic and political pressures on behalf of these military projects—brought constant pressure on the President and Secretary through unions, community leaders, businessmen, scientists, politicians and magazine advertisements. “I see nothing wrong with that,” said the President in his December, 1962, panel telecast.

Every time you cancel a weapons system, it affects a good many thousands of people…it is a very difficult struggle with the Congress. Twice now Congress has appropriated the [extra] money [for the B-70], twice we have not spent that money. But I must say as of today I don’t feel that the pressure on us is excessive.

A few months later he felt differently, as a Senate investigation tried unsuccessfully to force a change in McNamara’s awarding of the contract for a new TFX aircraft. “What we are really dealing with in the TFX investigation,” read an internal government memorandum,

is the spectacle of a large corporation, backed by Air Force Generals, using the investigatory powers of Congress to intimidate civilian officials just because it lost out on a contract. If…successful, it will be impossible for any civilian official ever again to exercise judgment…[without] measuring the influence of large corporations with Congress or…to control the military men who are theoretically under his direction.

But the effort failed, and so did all the other complaints about such McNamara innovations as (1) five-year projections of cost effectiveness; (2) budgeting according to each major type of mission rather than each branch of the service; (3) the comparison of systems and support elements within each service to eliminate duplications; and (4) the use of computers and civilian intellectuals to analyze performance. More importantly, the Kennedy administration refused to commit itself to:

• Spending another several billion dollars on a nuclear-powered plane that, after fifteen years and one billion dollars, still couldn’t fly.

• Spending another $13-15 billion on the B-70 bomber, its name temporarily changed to the RS-70 in the hopeless attempt to find a mission for it that was feasible, necessary and, in JFK’s words, “worth the money we would have to put into it.”

• Spending another several billion dollars on a Skybolt air-to-ground missile that still combined all the disadvantages of the B-52 bomber that fired it (comparatively vulnerable on the ground and slow to reach targets) with all the disadvantages of the poorest missiles (comparatively less accuracy and destructive power).

• Spending another $11-12 billion on a battery of twenty-six Nike-Zeus antimissile missiles, at best protecting less than a third of our citizenry, and still unable to discriminate between an incoming missile and the flock of decoys that accompanied it. To be sure, said the President, the first nation to perfect a missile defense would have an immense psychological as well as military advantage. “But it will cost billions. There is no sense going ahead until that system is perfected.”

Moreover, these projected costs were only estimates. History showed that the final costs for acquiring advanced weapons systems in modern times have averaged three times the original estimates. John Kennedy did not believe that the economic health of either the country or any community had to depend on excessive or inefficient armaments. Money saved by McNamara’s ax was used to strengthen our sword and shield. Defense spending rose some eight billion dollars under Kennedy, constituting most of his Budget increase, but it was spent on more solid and dependable deterrents from which the above systems might otherwise have taken money.

McNamara and Kennedy also made certain that defense dollars were not spent on “gold-plating” needlessly fancy and expensive specifications,
²
on surplus installations, or on an overreliance on cost-plus-fixed-fee contracts and noncompetitive bidding. They formed a single Defense Intelligence Agency, which produced one confidential daily report instead of the previous eleven. They formed a single Defense Supply Agency, which tightened up procurement practices on everything from different belt buckles to missiles, noted that Army helicopters could use the one million too many small rockets in Air Force stockpiles (savings: $41 million), abolished eighty-one different Pentagon shipping forms for one standard bill of lading and avoided dozens of other duplications. They undertook an initial reorganization of the National Guard and Reserves, which had been wholly inadequate for modern emergencies but the pet project of most Congressmen and governors, and they shut down, sold or cut back nearly three hundred inefficient installations. “The defense establishment,” said Kennedy, “must be lean and fit.”

2. Kennedy’s second approach to the public’s fiscal education was to bridge the gap between myth and reality by placing the goals of the former in the perspective of the latter. Those who wanted balanced budgets were informed that all three Kennedy cash budgets would have been balanced
if
we had full employment, or if there were no arms race, or if repayable loans and long-term capital outlays (which private business budgets would treat differently) were not included in full. Those who talked of swollen Federal payrolls were informed that the ratio of Federal employees to every hundred Americans was declining, and that nearly three-fourths of all Federal civilian employment was in three agencies: Defense, Post Office and the Veterans Administration. Those who were concerned about the national debt were informed that that debt, as a
proportion
of our economic output, was being reduced to a postwar low.

The Federal debt and spending figures had to be
compared
, said the President. Even the average businessman and homeowner had gone proportionately more deeply into debt than the Federal Government, despite all the talk about running the government like a housewife’s or grocery store’s budget.

He particularly liked to compare the Federal Government’s record with that of state and local governments. Their payrolls, debts and civilian expenditures were climbing much higher and faster than their Federal counterparts. He was waiting for the day when an attack on his fiscal “irresponsibility” by Senator Harry Byrd would give him an opening to compare Virginia’s fiscal record under the Byrd machine with the Federal Government’s: