CENTRAL INTELLIGENCE AGENCY
OFPICe OK TBS DEPUTY DlBtCrOB (INTCLUCENCE)
MEMORANDUM FOR: General Maxwell D. Taylor
Chairman, Joint Chiefs of Staff Department of Defense
Policies: The Next Phase
increased Soviet military expenditures have prevailed In policy debates, and that any significant rise in living standards has again been postponed. Khrushchev, beset by troubles at home and within the Bloc, seems to have decided that the world balance of power is not now favorable and that time is needed to strengthen Soviet economic and military power. Since Khrushchev has sought to justify his actions on the basis of the threatening international situation, the USSR does not seem to be loofcingubstantial Improvement in East-West relations.