COST IMPLICATIONS OF PROJECTED SOVIET STRATEGIC ATTACK FORCES WITH OR WITHOUT S

Created: 6/15/1979

OCR scan of the original document, errors are possible

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MEMORANDUM FORI Director, NFAC

Implications of Projected Soviet Strategic Attack Forces With or Without SALT

M. HuTPSTUTtER

Director Strategic Research

Last year you sent to Agencynd cabinet officials copiesaraoronduo on the coat implicationsejected Soviet strategic attack forces with and without SALT. We have now upHated our analysis using thc Soviet force levels. Our finding? are contained inttached memorandum. In view of the coming summit, we recommend that you similarly disseminate this year's update of Soviet spending for strategic attack forces. An additional information copy for the DCI is aloo attached.

Attachments: Aa stated

UNCLASSIFIED WHEN DETACHED FROM ATTACHMENT

1 Jl.-NEERIVED)

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MEMORANDUM

Cost Implications of Projected Soviet Strategic Attack Forces

1. Analysis of alternative Soviet strategic forcesInndicates that Soviet Intercontinental attack forces' under SALT II would be substantially less costly than the no-SALT forces. There would bearginal Impact on the level of total defense spending, however, and even if all the potential resource savings from SALT II were transferred to civilian lm-estraent, the effect on the economyhole would be negligible. These conclusions are similar to those reached last year in an analysis of the force projections made for

Vrcnds in Sovlot Spending for Strntcftlc Forces

2* 0 estimated Soviet Investment and operating expenditures (In0or intertontirw ntnl and peripheral Attack forces hasyclical pattern (see The peaks in the cycl* reflect primarily the introduction of succeeding generations of Intercontinental attack systems! thendCBMs andlasa SSBN in the stid- to; thendCBMs andlasa SSBN ins; and follow-on systems, now in development, in the. Principal among these are tho follow-on systems ro thche replacement for thend the Typhoonmoat costly of the projected systems.

"Sec nemorovdum, "USSR: Economic ImplicationsALT TWOB

-fhie memorandum wae prepared by tho Office of Strategic

Beeearoh and coordinatedhin the CIA. Commonte and querioe arf ueloemo ani mau be diraotrd

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Expc ndl ture_Irnpllcations of Force Projections

3. Figurehows spending for strategic attack forces In rcbles In three five yearB5. Ihc two barsre based on tuu Intelligence Community's best estimctcs of the number and characteristics of Soviet forces with and without SALT II. As the figute shows, investment and operating spending for atrat^glc forces will increase ineriod with orALT IL agreement. The increase anticipated under SALT IIesult of the sizable "cssoclatcd with lhectlon of folV^-en wtihj;iwhich outweigh the reduction in operating expenditures that will result from the dismantling of older weapons to Beet thc

SALT II limits.

the SALT II projection, Soviet spendingattack forcesould benan. This projected increase, however,about half as large as tho Increase between thepreceding plan periods. Projected Investment nndfor strategic attack under the no-SALT forces Istoercent greater than under the SALT force,of the larger number of Projected expenditures under SALT forforces alone would be almostercent higher, corapnrod withincrea-ie ofhs current and preceding plan perioda. Thcattack force would be aboutostly, than the SALT force.

Total Defense Expcndlfvres

expenditure implications of the projectedmuch lesa dramutic, however, when viewed In the contextdefense spending. Figurehows our estimates ofdefense expenditures for the three Five Year Plandifference In projected investment and operatingstrategic attack with and without SALT II hnael end trend oi total expenditures in tho earlyis because thesn expenditures make up only nboutoof total spending, so thnt even sizable changesforce spendingnotajor effoct on

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Figure 2A: Estimated Soviet Investment and Operating Expenditures for Strategic Attack Force; by Five-Year Plan

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Figure 2B: Estimated Soviet Defens* Expenditures by Five-Year Plan

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Impact on the Economy'

economic growth has been Blowing, onddemographic problems arc likely to Icedurtherin. Thia trend is confronting the Sovietsdifficult policy choices. For atpending haselatively constantoof the .Soviet gross national product (CW). Bothdefense spending have been increasingercent

per year. However, if defense spending continuesow as past trends and present forecastsis, at an annual rateercent comparedercenr or less for the economy as'adefensercreose as the economy slows. 5 it couldi percent higher, !-

Soviet leaders are cluarly concerned aboutprospects, and they may envision somefromby avoiding the additionalwith an unconstrained strategic environment. suggests, however, that the potential directfrom SALT would, in itself, have little impact on

the economy. Assuming that all other elements of Soviet military expenditures remain unchanged.5 the defense share of Sovietnder the moderate SALT force would be atew tenthsercent lower than under thc moderate no-SALT forces. hift In the share of GNP going to defenso wouldegligible impact on thegrowth of she Soviet economy, llils is because the production resources that would be relented arc small into Soviet investment requirements, are highly sperlalized, and are not easily transferred to civilian uses. In addition, Soviet strategic forcesmall numberercent of total military manpower--so that there wou,Ld_bemall benefit to the civilian labor force.

8. While Soviet participation in SALT probably is motivatedombination of economic, political, ond straregic concerns, the economic payoff from SALT is urllLely toredominant consideration. I I

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