Mutual Security Act - Background and Follow-on

Background and Follow-on

Mutual Security Act of 1951 was the successor to the Mutual Defense Assistance Act and the Economic Cooperation Act of 1949, which administered the Marshall plan. It became law on 10 October 1951, and created a new, independent agency, the Mutual Security Administration, to supervise all foreign aid programs including military assistance and economic programs that bolstered the defense capability of U.S. allies globally.

Submitted on 24 May 1951, President Harry S. Truman's omnibus foreign aid bill got a hostile reception on Capitol Hill. Rapid expansion of national security expenditures during the Korean War had produced alarm over high taxes, large deficits, government controls, and a possible “garrison state” among such prominent conservatives as Senator Robert Taft (R‐Ohio). Truman's decision to send U.S. troops to Europe as part of a standing NATO force further antagonized congressional conservatives and exacerbated their fears that European nations were not doing enough for their own defense. Congress thus reduced the administration's request for Mutual Security funds by 15 percent and authorized $5.998 billion and $1.486 billion, respectively, for military and economic assistance. The deepest cuts were in economic aid, thus ensuring its subordination to military assistance as “defense support.”

The Mutual Security Act was renewed each year until 1961, and it annually produced struggles over the size of the foreign aid budget, and the balance between military and economic aid. The US foreign aid program was then reorganized under new Kennedy Administration legislation, with signing of the Foreign Assistance Act and Executive Order 10973 on 3 November 1961, which established the United States Agency for International Development (USAID).