Pension Cuts Urged Again by Stockman : He Renews Campaign Against Military Retirement Program

Despite a public disclaimer by President Reagan and protests by national veterans organizations, Budget Director David A. Stockman insisted again Wednesday that the military pension program should be curtailed as a budget-cutting measure.

Defending his unusually blunt remarks last week that the pension program is “a scandal . . . an outrage” and that other benefit programs also need to be modified or eliminated, Stockman said he is trying to “tone up the environment” for the impassioned budget debate taking place in Congress.

People need to understand that serious budget-cutting choices must be made, he declared at a breakfast session with reporters, adding: “I don’t know that they’re necessarily going to agree, but I think we have a pretty strong case and I’d like to hear their alternative.”

Debate Heats Up

The feisty budget director considerably heated up the budget debate Feb. 5 when he testified before the Senate Budget Committee that spending for military pensions and other large benefit programs, including education and farm supports, should be slashed.

Veterans organizations and other groups vehemently protested Stockman’s criticisms. And Reagan said in an interview with the Wall Street Journal last week that he disagrees with Stockman’s position on military pensions, instead asserting that the benefits are warranted because of the demands of military service.

But Stockman, declaring he has no “second thoughts” about his Senate testimony, said there is a question even among many defense experts about whether the deferred-pay approach of the existing military pension system makes sense.

Need for Correction

“I think most people believe it doesn’t,” he said. “It needs to be corrected. (But) you have to do it prospectively. You’re not going to take anything away from somebody who’s retired now. The longer you wait on the prospective issue, the more you build in the future obligations.”

The comments of his budget director notwithstanding, Reagan still strongly believes the military pension system makes sense, according to a White House official who said Stockman is on “a personal crusade” to modify the system.

“The President has gone over this with us several times since Stockman’s testimony and he’s sold on the system,” said the official, who requested anonymity. “He’s heard the arguments that the system should be changed just to affect retirements in the future but he’s unwilling to say that.”

Stockman told reporters Wednesday that he and Reagan “have had debates from time to time about military retirement,” but refused to elaborate.

At the same time, he indicated that he would continue to speak out on his budget-cutting views, even though new White House Chief of Staff Donald T. Regan has said he admonished Stockman to “keep his cool” when talking publicly about controversial issues.

When asked about Regan’s counsel, Stockman said that in four years as budget director he has found “it’s usually noisier on the battlefront than it is at the command center. So people at the command center like it quiet, but it’s hard to keep it that way sometimes.”

‘A Deficit Situation’

“I think the programs that we’ve targeted aren’t good for the economy and aren’t necessarily good for the people but I think there are more people listening because we do have a deficit situation to correct,” Stockman said. “I mean, I don’t think the farm price support program is a good idea, whether you have a deficit or not. It causes too many uneconomic resources to be invested in agricultural production, and that causes inefficiency.”

Reiterating his controversial call for eliminating the Small Business Administraton, Stockman called the agency “a $1-billion waste, a rat hole” and asserted that only 1% of small businesses use it while “the others pay taxes.”

Stockman, a former congressman from Michigan, also took issue with Republicans and Democrats on Capitol Hill who insist Congress will not pass domestic spending cuts unless Reagan also agrees to further reductions in his defense spending request.

Calls Issue ‘Phony’

He called the issue “phony” and said there is no serious policy debate about the defense buildup. “The fact that you’re hearing so much noise and there is so much preoccupation with it on the Hill is a dodge, in my view,” he said, “because they don’t want to face the real choices, which are to cut the non-defense budget in the areas that we have outlined or to raise taxes.”

The solution to the burgeoning deficit, Stockman said, must come from cuts in the $600-billion worth of non-defense spending, especially from “the $200-billion sector of things that maybe we shouldn’t be doing.”

Although some Republicans as well as Democrats have indicated that they believe a tax increase should be part of a deficit reduction package, Stockman contended that there would be no solution “unless it is spending cuts only.”

“My view is the problem is so severe, we ought to try to get something done that can be done,” he declared. “And raising taxes can’t be done.”