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An end-strength of less than 2.4 million military men

and women in a diminished draft environment;

A budget of less than 7% of the expected Gross
National Product.

The nation's military strength was maintained during 1971 at the level prudence dictated; further, important steps were taken to assure that our strength would remain adequate for future years.

We have been changing the composition of our forces and the allocation of our resources to attain stated National goals in an optimum manner. These changes include:

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The decision-making process in Defense also has changed. Now, the emphasis is on participatory management, with both our civilian and military leaders being given an opportunity to be heard fully before decisions are reached.

There is also a changed relationship between the Department of Defense and the Congress. We recognize the partnership that must exist with Congress, which as a coequal branch of government shares equally the Constitutional responsibility for insuring the safety and security of our country.

The Strategy of Realistic Deterrence can only succeed if there is general acceptance of the further modification in the National Security Concepts of the 1960s which I identify in this Report. We have a new approach to planning and assessment methodology. With this new methodology, we seek to avoid the errors of the past which led to our ever-increasing commitment in Vietnam. That is a mistake we cannot afford to make again.

What we have done in the past three years now makes it possible for us to put three essential and interrelated planning tools to work for peace: Net Assessment, Total Force, and Long Range Planning.

Net Assessment

I said at the beginning of this Report that the business of peace is a complex one. Net Assessment in National Security Planning is an indispensable tool for coping with these complexities. In simple terms, Net Assessment, in conjunction with Total Force Planning, tells where we are, what we need to do, and how to get there.

To put it more fully, Net Assessment is a comparative analysis of those military, technological, political and economic factors:

which impede or have a potential to impede our
national security objectives,

with those factors:

available or potentially available to enhance
accomplishment of those same national security
objectives.

Through this process, we are able to determine how to apply our resources more effectively to accomplish our national security goals.

For example, the momentum of Soviet weapons development and deployment demands examination in relation to what we and our allies and friends must do about it. A similar assessment must be made of the increasing military capability across a broad spectrum of the Peoples Republic of China.

Since my last Defense Report hard, new evidence reveals such developments in the threat as:

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The deployed Y-class ballistic missile submarine
force of the Soviet Union could be as large as
our POLARIS/POSEIDON force by next year, rather
than in 1974 as I predicted last year.

Continued nuclear weapons and missile testing by
Mainland China with some ballistic missile deployments
likely this year.

The new Soviet supersonic dash bomber, designated

the BACKFIRE, could be operational by the mid-1970's.

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Some 100 new Soviet ICBM silo sites have been

identified for new or modified ICBM systems. The
possibility of such a new program was mentioned in
my Defense Report last year.

Soviet MIRV capability could be achieved next year.

Construction of the Moscow ABM system has resumed,
and testing of an improved ABM missile continues.

Ongoing Soviet naval ship construction programs
include production of nuclear-powered torpedo
attack and cruise-missile submarines.

New Soviet fighter aircraft, especially the high
speed FOXBAT as well as the FLOGGER and FITTER B
are entering the inventory.

Two new Soviet tanks, one a light tank and the
other a new main battle tank are probably in
production.

There were some, several years ago, who questioned my earlier estimates and projections of Soviet weapons momentum. If anything, as subsequent events have demonstrated, these estimates and projections were conservative.

In conjunction with my Defense Report, the Chairman of the Joint Chiefs of Staff, Admiral Thomas H. Moorer, will present to Congress and the American people a comprehensive military assessment of the threat and of our own force capabilities.

Our combined presentations this year will represent another step forward in our new emphasis on Net Assessment.

However, as we evaluate the strength of Soviet and Chinese weapons developments and deployments, we must also take into account in a realistic net assessment the fact that they face some considerable constraints, such as:

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The Soviet Union and Mainland China must deploy hun-
dreds of thousands of troops to their Far Eastern
border;

The Soviet's growing fleet must contend with the
paucity of all-weather port facilities;

The Soviets trail the U.S. in many frequently over-
looked but essential matters, such as long-range
underway replenishment at sea and containerization.

Technological Superiority

Any assessment of the future defense needs of the United States must include a program to assure our continued technological superiority. The 1957 Sputnik success shocked this country, and led to a flurry of remedial action which culminated in our successful moon landings. In that instance, fortunately, we were dealing with a peaceful competition; yet it took us more than 10 years to accomplish the job despite our significant technological lead.

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Beginning in 1965, at the same time that we were diverting so much of our effort and technology to Vietnam, the Soviet Union was stepping up its research and development efforts and was beginning to produce many of the weapons systems we note today. The USSR has now reached a position where unless we take appropriate action there could be new surprises and new "sputniks." But they are less likely to be in areas such as the peaceful exploration of space; rather they are more likely to be part of a major new Soviet military capability.

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It cannot be said too often that an open society such as ours is at a disadvantage in facing the challenge of a closed society which seeks, through all means at its disposal, to become the World's greatest power.

So I would repeat what I have said so many times: The American people may perhaps be willing to accept parity in regard to the deployment of strategic nuclear weapons; but, in my view, they will never accept a position of inferiority.

Therefore, in order to avoid that unacceptable danger, it is absolutely essential that we maintain technological superiority. The one billion dollar increase in the FY 1973 R&D Budget over that which Congress gave us last year is aimed at maintaining that superiority.

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The Soviet Union continues to expand its weapons development and deployment programs. There may be some debate as to whether or by how much the Soviet Union is outspending us in research and development. What must concern any one responsible for our national security is the demonstrable fact that we could lose the technological race. And second place in that technological race is simply not good enough.

Total Force Planning

Net Assessment, as I have indicated, is one essential of effective long-range planning. The other essential is Total Force planning which I described at some length in my Report last year. As I said then:

"In defense planning, the Strategy of Realistic
Deterrence emphasizes our need to plan for optimum use
of all military and related resources available to meet
the requirements of Free World security. These Free
World military and related resources which we call
"Total Force" include both active and reserve

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components of the U.S., those of our allies, and the
additional military capabilities of our allies and
friends that will be made available through local efforts,
or through provision of appropriate security assistance
programs.

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I am confident the Nixon Doctrine peacetime force structure in our Five-Year Defense Program will be adequate if Congress votes the necessary funds to make Total Force Planning effective. They include funds for maintaining:

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Strategic nuclear forces, including sea-based missile deterrent forces such as the Undersea Long-Range Missile System, advanced and improved command and control, the new B-1 strategic bomber, and continued deployment of SAFEGUARD. These increases are recommended to maintain our strategic sufficiency against a growing threat.

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