Defense Spending Management

Report Outline
New Challenges for Defense Managers
Defense Management Under Mcnamara
Attacks on Pentagon Spending Managers
Special Focus

New Challenges for Defense Managers

Rising costs of the war in Viet Nam coincide with increased spending pressure on behalf of new weapon systems, the reserve forces, military pay and other defense programs not directly related to the war. The combination threatens to push spending for national defense in the current fiscal year which ends June 30, 1967, well above the post-World War II record of $60.5 billion predicted by President Johnson in January 1966. Some close observers of defense outlays think the total may go over $65 billion. During the first three months of the current fiscal year, for example, the Viet Nam war pushed military spending to an annual rate of almost $63 billion. The July-September 1966 military outlays of $15.74 billion were running at an annual rate 10 per cent beyond what the administration anticipated in January 1966.

The relentless pressures on the defense budget have been accompanied by sharp congressional attacks on the policies and management techniques of Secretary of Defense Robert S. McNamara. The pressures and the attacks together form the greatest challenge McNamara has faced in his five years as manager of what has been called “the largest business in the world.”

McNamara and his top military and civilian advisers must cope with the problems of fighting a war of uncertain duration and intensity, and they must look ahead to the task of slimming down a war-fattened defense establishment once the fighting ends. They must also make basic decisions about the design, strategy and cost of the nation's armed forces for the coming decade.