On inauguration day, Secretary of State-designate Alexander Haig presented a draft National Security Decision Directive (NSDD) on the organization of U.S. foreign policy to Presidential Counselor Edwin Meese III. The intent of Haig's draft was to place overall responsibility for the direction and implementation of U.S. foreign policy within the Department of State. Relying on his experience in the Richard Nixon administration, Haig wanted to ensure Department of State control of the interagency groups within the National Security Council (NSC) because they were the "key [to] the flow of options to the President," and thus to policy control.
Haig's initiative, which he repeated on several occasions, was never responded to. Senior members of the White House staff including, Counselor Meese, Chief of Staff James A. Baker III, and Michael Deaver were concerned that the proposed reorganization took too much power out of the President's hands and that an activist Secretary of State operating with wide powers could eclipse the President in his public role as the chief enunciator of U.S. foreign policy. Although the Haig initiative failed, the Secretary of State appeared to achieve for a time broad authority over the formulation of foreign policy. The President placed National Security Adviser Richard Allen's office under the supervision of Meese, and for the first time in the history of the NSC, the National Security Advisor lost direct access to the President. In subsequent public statements, the President underlined his belief that his Secretary of State was his "primary adviser on foreign affairs, and in that capacity, he is the chief formulator and spokesman for foreign policy for this administration." Allen, who had less personal authority, undertook a role as National Security Adviser that emphasized the "integration" of the proposed policies and views of the foreign affairs agencies. Nor did he take on any of the articulation of administration foreign policy (a responsibility left to Secretary Haig who at first thought of himself as the "Vicar" of foreign affairs).
Changes were made in the NSC from the outset of the Reagan presidency. At a February 25, 1981, meeting chaired by Meese, Cabinet-level heads of the major foreign affairs agencies agreed on a plan to establish three Senior Interdepartmental Groups (SIGs) on foreign, defense, and intelligence problems, chaired respectively by the Secretaries of State and Secretary of Defense and the Director of Central Intelligence. Under the SIGs, a series of Assistant Secretary-level Interdepartmental Groups (IGs), each chaired by the agency with particular responsibility, dealt with specific issues. The NSC staff was responsible for the assignment of issues to the groups.
One example of a failed effort to create a new NSC organ in the hopes of improving interagency coordination and reducing friction among the Departments of State and Defense, the CIA, and the NSC, was President Reagan's order on March 24, 1981, naming then Vice President George Bush as chair of a proposed administration crisis management team. The NSC was charged with providing staff support for this effort. The crisis group, referred to as the Special Situation Group (SSG) received a formal charter on December 14, 1981, but in fact only met once. Secretary Haig immediately and forcefully complained that the SSG would remove coordinating responsibility from him.
In another effort to improve policy coordination during the summer of 1981, the President authorized the creation of a National Security Planning Group (NSPG) composed of the Vice President, the Secretaries of State and Defense, the Director of Central Intelligence, the Chairman of the Joint Chiefs of Staff, and the National Security Adviser. This group met weekly with the President and shaped policy prior to formal meetings of the NSC.
In January 1982, following the resignation of National Security Adviser Allen, the President appointed a close personal friend, Deputy Secretary of State William Clark, as his new adviser. The brief episode of the weakened National Security Adviser was over. Clark would report directly to the President and not through Meese or the other two members of the triumvirate of Baker and Deaver as Allen had done. President Reagan issued a written directive (NSDD(2)) in January 1982 outlining the structure and functions of the National Security Council. The directive placed responsibility for developing, coordinating, and monitoring national security policy with the National Security Adviser in consultation with the NSC members. It assigned to the Secretary of State "authority and responsibility" for the "overall direction, coordination and supervision of the interdepartmental activities incident to foreign policy formulation, and the activities of executive departments and agencies overseas," except for military activities. NSDD(2) delineated the functions of the three SIGs. It designated the Secretary of State as chairman of the Senior Interdepartmental Group for Foreign Policy (SIG(FP)), and established a "permanent secretariat, composed of personnel of the State Department," augmented "as necessary" by other agency personnel requested by the Secretary of State, to deal with foreign affairs matters.
To assist the SIG(FP), the Secretary of State set up Interagency Groups (IGs) for each geographic region, politico-military affairs, and international economic affairs. The IGs, in turn, created full-time working groups. The two other SIGs followed a similar structure under the leadership of the Secretary of Defense and the Director of Central Intelligence. Over the next 5 years, the Reagan administration established an additional 22 SIGs and 55 IGs within the NSC system. Some committees met only once. Observers pointed out the overuse of SIGs and the increasing snarl of responsibilities that led to enterprising NSC officials like Colonel Oliver North developing their own sub-domains within the policy-making system. political analyst, Zbigniew Brzezinski, described the NSC as entering its "Mid-Life Crisis" during the Reagan years.
Clark took a very active role in coordination of policy among the agencies in such areas as intelligence and the protection of classified security information. He replaced a number of senior NSC staff members and reorganized his office to create three "clusters" to deal with political, military, and intelligence matters. Clark emerged as a major spokesman for Reagan administration foreign policy, particularly with the Congress. He publicly reaffirmed President Reagan's stated policy that the Secretary of State would be the primary "formulator and enunciator of foreign policy." At the same time, however, Clark insisted that the role of the President as the final arbiter on matters of foreign policy be kept in front of the public. He also asserted NSC staff jurisdiction over long-range policy review, formerly a Department of State function.
The NSC system under Clark did not solve the coordination problems. Friction between the Department of State and the NSC continued and came to a head during the intense debates within the administration over how the United States should act in the Lebanon crisis in the spring of 1982 following the Israel invasion. The disputes resulted in Secretary Haig's resignation on June 25, 1982, and President Reagan's appointment of George P. Shultz as his new Secretary of State. In his July confirmation hearings, Shultz emphasized the primary role of the President in the formulation of policy and stressed the collegial nature of policy formulation in the Reagan administration. Shultz also referred to the delegation of authority as laid out in NSDD(2) as the source of his own responsibilities and authority.
The apparent resolution of the dimensions of the Secretary of State's authority ironically coincided with ever-increasing activities in the foreign affairs field. The NSC frequently disagreed with the Department of State over the management of daily U.S. foreign relations problems. One observer called the NSC a "bee hive of activity." An NSC-chaired group took over arms control responsibilities from a State-chaired group (SAC/G) and ramrodded the tough negotiating position favored by ACDA Chief Fred Ikle and Richard Perle of the Defense Department. Deputy National Security Adviser Robert McFarlane replaced Philip C. Habib as the chief U.S. Middle East negotiator in July 1983, and the National Security Adviser became directly involved in the operations of foreign policy. It led to a major change in how the NSC system worked.
In October 1983, McFarlane replaced Clark as National Security Adviser, with Admiral John Poindexter as his deputy. The new National Security Adviser had a background in both military and diplomatic affairs. Retaining the NSC structural changes established by Clark, McFarlane played a highly active role in attempting to compromise interagency disputes. He lacked the personal ties with the President that Clark enjoyed, but continued to have direct Presidential access. During his tenure, the National Security Adviser stepped back from the previous high profile in public policy enunciation, but became more involved in the direct management of key areas of foreign policy.
The Reagan Administration used a variety of policies and plans to encourage greater democracy in Central America, including a bold plan for economic development. Reagan's efforts to fund the contras is well known. In 1985 another effort was serious undertaken to provide economic assistance. Reagan created a National Security Study Directives (NSSD) on January 9, 1985 to study actions that could enhance the fragile economies of Central America. A senior interagency task force was created headed by William Flynn Martin. The analysis looked at the factors of stability in the region: the need for security/peace; the need for economic assistance of 8 billion dollars as recommended by Henry Kissinger in a Presidential commission on Central America and the need for the Central American economies to adopt more market oriented, free market policies. Martin presented the results to the President in early 1985 and the following recommendations were implemented by President Reagan: provide full $8 billion assistance to the region; encourage every US department to provide skills and know how to the region in their area of expertise (i.e. agriculture, energy, transportation, commerce, etc.) and to begin intense engagement to bring about Democratic reforms and market developments that would allow sustainable long term economic development, against the backdrop of 3.3% population growth per year. The declassified document can be seen on online.
During 1985 and 1986, the National Security Adviser and certain staff members took a particularly activist role in the formulation and execution of policy in the Caribbean, Central America, and the Middle East. It was an activism run amok in the "Iran-Contra affair" that brought the NSC to a nadir of public trust and brought upon it Congressional investigation and the threat of prison for those involved. The Iran-Contra matter resulted from NSC-led efforts to develop a policy to befriend Iran and provide arms to that nation in exchange for its resistance to the Soviet Union and, more particularly to assist in the freeing of American hostages held by Muslim extremist groups in the Middle East. National Security Adviser McFarlane and Admiral Poindexter, who succeeded him in December 1985, played major roles in these matters. The efforts to provide arms for hostages eventually became connected, through the transfer of funds made with arms sales, with the NSC staff's ardent support for the Nicaraguan "Contras" in their civil war against the left-wing government of Nicaragua. Investigations in 1987 and thereafter by a Presidential Review Board (the Tower Commission), Congress (Congressional Committees Investigating The Iran-Contra Affair), and a Special Prosecutor (Lawrence Walsh) examined in great detail the activities of the NSC staff, as well as the actions and responsibilities of the President, the National Security Adviser, and the heads of agencies.
The Tower Board, headed by Senator John Tower and including former Senator Edmund Muskie and former National Security Adviser Scowcroft, not only reviewed the events of Iran-Contra but made a body of recommendations for the reform of the NSC. NSDD(266) of March 31, 1987, adopted the Board's major recommendations: reduction of the size of the staff, appointment of a legal counsel, removal of the Crisis Pre-Planning Group, and its replacement with Policy Review Committee. The spirit of the reforms was given more content by the new NSC leadership appointed by President Reagan in November 1987: National Security Adviser Frank Carlucci and Deputy National Security Adviser Lieutenant General Colin Powell. Carlucci reformed the NSC by replacing more than half of the professional staff within 3 months. Carlucci largely withdrew the NSC from its operational roles, but in the matter of Nicaragua, NSC continued to exercise the coordination that was not forthcoming from any of the agencies.
In the autumn of 1988, Carlucci was called to the Defense Department to succeed Caspar Weinberger, and for the third time among his six appointments to the position of National Security Adviser during his presidency, Reagan promoted the Deputy. General Powell directed an NSC that strived to provide balanced coordination of major foreign policy presentations for the President. Managing the Policy Review Group and the National Security Planning Group that Poindexter had so favored in preparing the NSC for discussions, Powell conducted an NSC process that was efficient but low key. There were no longer free-lancers operating out of the NSC staff. Under Powell's direction, the President and his chief advisers weathered the Persian Gulf crisis in 1987 and the Reagan-Gorbachev relationship culminating in the Moscow Summit of June 1988 (the smoothest ever seen by observers at the time).