Following the start of the Korean War in June 1950, the defense budget had nearly quadrupled by 1953, a fact that greatly troubled President Eisenhower. Working with his treasury secretary, George Humphrey, and his director of the Bureau of the Budget, Joseph Dodge, the president proposed a policy of fiscal conservatism that would help balance the budget and allow the nation to wage the Cold War without risking its economic well-being.
The need for a new defense posture was highlighted further when the policymaking apparatus of the Eisenhower administration ground to a halt as its leading protagonists were racked by indecision in the wake of Soviet leader Josef Stalin's death in March 1953 and the East German uprising in June of the same year. Leading members of the NSC argued over how best to exploit these situations and whether or not the United States should seize the initiative and attempt to roll back communism. In May 1953, Eisenhower launched Operation solarium, which established three task forces to study and debate the future of American military policy. Task Force A was headed by George Kennan and advocated a scenario loosely based on the containment policy already in place; Task Force B, led by Major General James McCormack, proposed a more muscular type of containment that would emphasize nuclear deterrence; and Task Force C, headed by Admiral Richard L. Conolly, examined the potential of a policy that would liberate Eastern Europe by rolling back communism. By July 1953 all three task forces had reported their findings to the NSC, although they were unable to reach consensus on the preferred course of action. Ultimately, the approach chosen would borrow from all three recommendations.
Discounting the 1950 NSC-68 policy document that presumed 1954 would be the "year of maximum danger," NSC 162/2 instead outlined a plan that would see the United States prepare for a long-haul struggle. The document called for greater use of covert operations and psychological warfare, an increase in aid to European and Asian allies, and a readiness to use nuclear weapons as a first response to any Soviet aggressive action, be it conventional or nuclear. At the same time, the New Look would decrease reliance on conventional forces, which, it was hoped, would bring down defense expenditures. The document was eventually initialed by Eisenhower on 30 October 1953. The policy was soon put into place, although U.S. defense budgets fell only marginally during 1954–1958 before rising once more.
Dockrill, Saki. Eisenhower's New Look: National Security Policy, 1953–1961. New York: St. Martin's, 1996.; Gaddis, John Lewis. Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy. New York: Oxford University Press, 1982.