While Secretary of Defense, he opposed amnesty for draft dodgers, and pressed for development of more sophisticated nuclear weapon systems. Additionally, his support for the A-10 and the lightweight fighter program (later the F-16) helped ensure that they were carried to completion.
Analyzing strategy, Schlesinger maintained that the theory and practice of the 1950s and 1960s had been overtaken by events, particularly the rise of the Soviet Union to virtual nuclear parity with the United States and the effect this development had on the concept of deterrence. Schlesinger believed that "deterrence is not a substitute for defense; defense capabilities, representing the potential for effective counteraction, are the essential condition of deterrence." He had grave doubts about the assured destruction strategy, which relied on massive nuclear attacks against an enemy's urban-industrial areas. Credible strategic nuclear deterrence, the secretary felt, depended on fulfilling several conditions: maintaining essential equivalence with the Soviet Union in force effectiveness; maintaining a highly survivable force that could be withheld or targeted against an enemy's economic base in order to deter coercive or desperation attacks against U.S. population or economic targets; establishing a fast-response force that could act to deter additional enemy attacks; and establishing a range of capabilities sufficient to convince all nations that the United States was equal to its strongest competitors.
To meet these needs, Schlesinger built on existing ideas in developing a flexible response nuclear strategy, which, with the President's approval, he made public by early 1974. The United States, Schlesinger said, needed the ability, in the event of a nuclear attack, to respond so as to "limit the chances of uncontrolled escalation" and "hit meaningful targets" without causing widespread collateral damage. The nation's assured destruction force would be withheld in the hope that the enemy would not attack U.S. cities. In rejecting assured destruction, Schlesinger quoted President Nixon: "Should a President, in the event of a nuclear attack, be left with the single option of ordering the mass destruction of enemy civilians, in the face of the certainty that it would be followed by the mass slaughter of Americans?"
With this approach Schlesinger moved to a partial counterforce policy, emphasizing Soviet military targets such as ICBM missile installations, avoiding initial attacks on population centers, and minimizing unintended collateral damage. He explicitly disavowed any intention to acquire a destabilizing first-strike capability against the USSR. But he wanted "an offensive capability of such size and composition that all will perceive it as in overall balance with the strategic forces of any potential opponent."
Because he regarded conventional forces as an equally essential element in the deterrence posture of the United States, Schlesinger wanted to reverse what he perceived as a gradual downward trend in conventional force strength. He pointed out that because Soviet nuclear capabilities had reached approximate parity with the United States, the relative contribution to deterrence made by U.S. strategic forces had inevitably declined. One of the missions of conventional forces, he noted, was to deter or defeat limited threats.
In this vein Schlesinger devoted much attention to the North Atlantic Treaty Organisation, citing the need to strengthen its conventional capabilities. He rejected the old assumption that NATO did not need a direct counter to Warsaw Pact conventional forces because it could rely on tactical and strategic nuclear weapons, noting that the approximate nuclear parity between the United States and the Soviets in the 1970s made this stand inappropriate. He also rejected the argument that NATO could not afford a conventional counterweight to Warsaw Pact forces. In his discussions with NATO leaders, Schlesinger promoted the concept of burden-sharing, stressing the troubles that the United States faced in the mid-1970s because of an unfavorable balance of international payments. He urged qualitative improvements in NATO forces, including equipment standardization, and an increase in defense spending by NATO governments of up to five percent of their gross national product.
During President Nixon's last days in the White House during the Watergate crisis, when the President's mental stability was doubted by some, Schlesinger is thought to have instructed the Joint Chiefs of Staff to check with him before carrying out any of Nixon's orders regarding nuclear weapons. He also drew up contingency plans for an emergency deployment of the 82nd Airborne to Washington D.C. in the event of Nixon refusing to step down in the event of impeachment and usurping of the marines.
Another crisis flared in July 1974 when Turkish forces, concerned about the safety of the Turkish minority community, invaded Cyprus after the Cypriot National Guard, supported by the government of Greece, overthrew President Archbishop Makarios. When the fighting stopped, the Turks held the northern section of the island, about 40 percent of the total area. Turkey's military action caused controversy in the United States, because of protests by supporters of the Greek Cypriots and because Turkish forces used some U.S.-supplied military equipment intended solely for NATO purposes. Schlesinger felt the Turks had overstepped the bounds of legitimate interests in Cyprus and suggested that the United States might have to reexamine its military aid program to Turkey. During this time President Nixon resigned and Gerald R. Ford succeeded him; eventually Ford and Secretary of State Henry Kissinger made it clear that they favored continued military assistance to Turkey as a valued NATO ally, but Congress in December 1974 prohibited such aid, instituting an embargo that lasted five years.
Only one other notable event remained in the Indochina drama. In May 1975 forces of the Communist Cambodian government boarded and captured the crew of the Mayaguez, an unarmed U.S.-registered freighter. The United States bombarded military and fuel installations on the Cambodian mainland while a battalion of Marines landed by helicopter on an offshore island to rescue the crew. The 39 captives were retrieved, but the operation cost the lives of 41 U.S. military personnel. Nevertheless, the majority of the American people seemed to approve of the administration's decisive action.
The unreported, but important, main reason behind Schlesinger's dismissal, though, was his insubordination toward President Ford. During the Mayaguez incident, Ford ordered several retaliatory strikes against the Cambodians. Schlesinger told Ford the strikes were carried out, but Ford later learned that Schlesinger, who disagreed with the order, had none of them carried out. Ford let the incident go, but when Schlesinger committed further insubordination on other matters, Ford finally fired him. This is all reported in Bob Woodward's 1999 book, Shadow.
In spite of the controversy surrounding both his tenure and dismissal, Schlesinger was by most accounts an able secretary of defense. A serious and perceptive thinker on nuclear strategy, he was determined that the United States not fall seriously behind the Soviet Union in conventional and nuclear forces and devoted himself to modernization of defense policies and programs. He got along well with the military leadership because he proposed to give them more resources, consulted with them regularly, and shared many of their views. Because he could be blunt in his opinions and did not enjoy the personal rapport with legislators that prior Secretary of Defense Melvin Laird had, his relations with Congress were often strained. A majority of its members may have approved Schlesinger's strategic plans, but they kept a tight rein on the money for his programs. As for the Pentagon bureaucracy, Schlesinger generally left its management to Deputy Secretary of Defense William P. Clements.
Thereafter he resumed his writing and speaking career and was employed as a senior adviser to Lehman Brothers, Kuhn, Loeb Inc., of New York City. On June 11, 2002 he was appointed by U.S. President George W. Bush to the Homeland Security Advisory Council. He also serves as a consultant to the United States Department of Defense, and is a member of the Defense Policy Board. On January 5, 2006, he participated in a meeting at the White House of former Secretaries of Defense and State to discuss United States foreign policy with Bush administration officials. On January 31, 2006 he was appointed by the Secretary of State to be a member of the Arms Control and Nonproliferation Advisory Board. On May 2, 2006, he was named to be a co-chairman of a Defense Science Board study on DOD Energy Strategy.
On June 5, 2008, Defense Secretary Robert Gates appointed Schlesinger to head a task force to ensure the "highest levels" of control over nuclear weapons. The purpose of the review is to prevent a repeat of recent incidents where control was lost over components of nuclear weapons, and even nuclear weapons themselves.
Schlesinger is currently the Chairman of the Board of Trustees of The MITRE Corporation; a Senior Advisor for Lehman Brothers; on the advisory board of The National Interest; a Director of BNFL, Inc., Peabody Energy, Sandia Corporation, Seven Seas Petroleum Company, Chairman of the Executive Committee of The Nixon Center. He has written a number of opinion pieces on global warming, expressing a strongly skeptical position.
Schlesinger is also aware of the peak oil issue and supports it. The keynote speech at the first day of an oil depletion conference hosted by the Association for the Study of Peak Oil in Cork, Schlesinger said that the oil industry executives now privately concede that the world faces an imminent oil production peak, and argued that the report "Facing Hard Truths about Energy" by the US oil industry grouping the National Petroleum Council constituted "a backdoor admission that in the next decade or two we face a moment of truth". Conceptually Schlesinger means that the battle was over and that the peak oil movement has won.
On June 5, 2008, US Secretary of Defense Robert Gates announced that he had asked Schlesinger to lead a senior-level task force to recommend improvements in the stewardship and operation of nuclear weapons, delivery vehicles and sensitive components by the US DoD following the 2007 United States Air Force nuclear weapons incident. Members of the task force came from the Defense Policy Board and the Defense Science Board.