At Secretary McElroy's suggestion, Assistant Secretary McNeil presented the udget figures for all three of the military I services pointing out that they were within the 38 billion dollar ceiling directed by Secretary Wilson. He likewise pointed out that subsequently the Service Secretaries and the Chiefs of Staff were to be permitted to indicate what each service felt it required above the 38 billion dollar limit. In concluding his detailed report, Secretary McNeil pointed out that the figures he had presented did not include the cost for implementing the Cordiner recommendations or recommendations for a ’ nm Secretary McNeil dealt at great length and in detail with three major subjects illustrated by charts. The first of these gave the figures for New Obligation Availability, Direct Obligations, and Expenditures for the FY¥'s 1957, 1950 and 1999. ‘The second chart broke down these figures in detail in terms of the major military categories of expenditure such as Military Personnel, Operations and Maintenance, Major Procurement, etc. The third chart broke down the second chart into the amounts each service would require for each of the above-mentioned military categories. civilian pay raise. Secretary McElroy next called on Secretary Quarles. The latter stated initially that the formation of the FY 1959 military program had been an austere exercise. Moreover, certain urgently desirable programs had not been included in this 1959 Budget because of the ceiling placed on expenditures and NOA. Some of these urgent additional programs had Department-wide bearing and implications. It was with these that Secretary Quarles said he would deal, leaving to the Service Secretaries other add-on programs which each service felt to be necessary. Thereafter, Secretary Quarles in line with these comments dealt first with the feeling in the Defense Department that the Cordiner recommendations should be implemented. If this was ultimately agreed, the implementation of the Cordiner plan and related matters would involve an addition of some 700 million dollars annually in the Defense Department Budget. feo } > ! Secondly, Secretary Quarles dealt with the impact of the Report of the Security Resources Panel (the so-called Gaither Report) 4 which had been presented to the National Security Council on November 7 \ dt a as of this year. Secretary Quarles pointed out that if we implemented the list of programs to which the Gaither Panel had assigned an A priority, it would cost an additional 2.8 billion dollars in FY 1959. If we went further and implemented the recommendations to which the Gaither Panel had given a B priority, there would be an additional 3 ft these were definitely additive programs and had not been included in et. cost of 1.66 billion dollars. a Secretary Quarles pointed out that -k a 7 THY Onanry ew mh a = a 3] o H a a a (| v 5 % t a ° w oq cs a“ itis a ne seties, Leena EEESanne eee ,