|Gorby closes his speech notes, and resigns|
It was a Wednesday, actually, but close enough. On December 25, 1991, Mikhail Gorbachev resigned as the last leader of the Soviet Union, and the Red Flag was lowered from the Kremlin for the last time.
With the end of the Cold War, the U.S. government stood down a lot of its national security programs. That didn't last long, and the post-Cold War euphoria is hard to even remember now, but while it lasted serious people questioned how much we needed to protect any of our national assets. The great national security threat we had been countering ever since the Truman Administration - assuming it ever really existed - surely existed no longer, as the thinking went. It was even supposed that terrorism would mostly end now that the Soviet Union would not be around to support groups like the Red Brigades and PLO.
Like I said, it didn't last long, but while it did, the USG cut funding.
See the excellent in-house history of Diplomatic Security for how its programs were affected after 1991.
The urgency to improve security after the Beirut attacks had faded, and for fiscal year (FY) 1988, the Reagan Administration requested $303 million for DS, well below the $458 million anticipated by the Bureau. Assistant Secretary Lamb admitted, “Each post is going to see cutbacks in every [security] program.” The Office of Management and Budget (OMB) set a ceiling of $303 million for DS’s budget in FYs 1989 and 1990 as well. In FY 1990, the total funds available to DS were only $180 million, and DS leaders questioned whether they could fulfill the security responsibilities authorized by Congress … The budget cuts, in part, reflected the end of the Cold War and the collapse of the Soviet bloc and the Soviet Union between 1989 and 1991.
Unlike today, there was no OCO fund back then to eke out the DS budget, but there was its predecessor, the Gulf War supplemental.
Meanwhile, tensions increased between the United States and Iraq during 1990 and 1991 when Iraqi dictator Saddam Hussein invaded the neighboring nation of Kuwait, and DS experienced the odd situation of facing increased demands for its services, notwithstanding cuts in its budget … The Department estimated that it incurred an additional $22 million in expenses for increased diplomatic security and another $11 million in evacuation costs as a result of the  Gulf War. Ironically, Congress agreed to large security supplemental appropriations for Operation Desert Storm while debating a reduction of budget appropriation for DS … The [appropriation] supplementals for the 1991 Gulf War did not arrest the trend of budget cuts and staff reductions faced by DS. DS shifted its goals and philosophy from total risk avoidance, as promoted in the mid-1980s, to reducing risk “to an acceptable level” where possible, i.e. risk management. This shift in approach, DS hoped, would allow it to direct its increasingly limited resources toward its most urgent security needs. DS, together with the Overseas Security Policy Group, undertook a wholesale review of existing overseas security standards.
Security standards are politically sacrosanct things, at least until enough time has passed since the last embassy attack and Congress’ interest dwindles, along with its willingness to appropriate funds.
By the spring of 1991, the budget cuts began affecting DS operations. Lamb’s successor, Assistant Secretary of State for Diplomatic Security Sheldon Krys noted that staffing shortages had forced him to employ front office personnel on protective details. Overseas support positions were not filled, and technical security countermeasures work fell behind. In March 1992, Under Secretary of State for Management John W. Rogers informed the House Subcommittee on Commerce, Justice, and State that the Department faced a conflict between security measures demanded by its revised security standards and the Department’s ability to pay for implementing those standards.
And so the unavoidable happened, and security programs were reduced to match the resources allocated for them. That situation continued until 1998 and the next round of embassy attacks.