CONDE:
Cabinet Minutes, June 3, 1957 - page 2
atomic energy.
He agreed with Adm. Strauss that the large increase
for peaceful uses was in order.
Adm. Strauss pointed out a second con-
templated increase for weapons. The President would not immediately
admit need for expanding this program since he thought it fully adequate
to continue production at present rates. Adm. Strauss noted the newness
of the effort on small weapons, as for air defense, of which great numbers
are required.
The President ascertained that overtime wages were being paid only
by AKC (for supervisory personne! at the plant under strike), Defense (on
missiles), Post Office (Christmas mail), and Agriculture (forest fires}.
The President thought it might be time to stop payment of overtime on
missiles programs.
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On budget trends generally, Mr. Brundage first pointed out that the
Bureau would by June 30 transmit approved policies and planning figures
to the agency heads for their guidance in preparing the detailed estimates
due in September. He set as major objectives for the next four years
(a) achievement of a surplus of receipts,
{(b) reduction of taxes,
debt reduction, and (d) better control of spending.
(c}
He noted that the
trend of expenditures in 1956-58 has been upwards and he asserted that
even optimistic estimates of receipts barely provided for covering the
increased expenditures. He noted further that if expenditures could be
held at current levels, then even the pessimistic estimates on receipts
indicated a budget surplus. To hold expenditures at $70 billion, he said,
would require reduction of Defense Department personnel and procurement, holding the line on research and development, deferment of new
programs, reappraisal of approved legislative programs, abandonment
of some Administration programs, resixtance to Congressional increases
of appropriations, determined efforts to secure legislative reductions
of appropriations, and generally a cutback of planned expenditures to the
1957 level.
Mr. Brundage circulated and recovered memoranda setting forth the
consolidated departmental figures for FY 1959. He recognized that the
agencies would require some time for studying them and that further
Cabinet discussion could ensue. The President postponed detailed discussion of these figures until ancther week so they could be studied. He
then asked for general comments.
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Defense Departmentfiscal problems were discussed at length by Sec.
Wilson. He stated that he had held up $500 million of appropriations
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in the latter part of FY 1957, and he pointed ont that further drastic
measures would be required to return to the $38 billion level. He said
CONFIDENTIAL