You know... Despite the bad reputation that McGovern has been getting in the TNO community as a dove/weakling/softie/peacenik that will allow the Nazis and the Japanese to run wild... Upon careful reflection, I honestly don't think his military cutback will be a bad idea.
Like, look at the conflicts that the US does engages in: Guyana, South Africa, Indonesia, and Iran. You know the one thing that they all have in common? They do NOT require the full might of the US military, with you most likely ending up sending over 2 Airborne and a few extra tank divisions at most, with the rest of it being CIA covert ops and financial support to your side behind the scenes.
And in the case of WW3 and Fall Rockwell breaking out in which the full might of the American military will be required... Well, the world is screwed in that case anyway.
Hence, by cutting back on defense spending, you can make the military industrial complex less bloated, forcing defense contractors and DARPA alike to focus on 'better', instead of 'more', since in the context of a Cold War, a lot of conflicts will be fought via a small number of elite special forces and a high-tech air force instead of over 9000 tanks anyway.
Plus, after a two-term LBJ presidency with the Great Society, you will REALLY need to start looking at parts of the government budget to cutback on, instead of treating the US economy as this bottomless well that you can endlessly draw from without a worry in the world.