Ploys Avoid Serious Reductions : Pentagon Budget Cutters Encounter a Bag of Tricks

As the Pentagon’s civilian leaders pored over $33 billion worth of spending cuts proposed recently by the Army, Navy and Air Force for the 1989 budget, they found themselves grappling with a bag of tricks known to veteran bureaucrats as “gold watches,” “Washington monuments” and “pet rocks.”

These are ploys long used by the military services--and other government agencies as well--to comply with orders for budget reductions without actually risking serious cutbacks. What the admirals and generals do is propose to cut back or eliminate things they know the White House or friendly members of Congress can be counted on to rescue before the budget ax really falls.

Ironically, at a time when the government’s ability to get a tighter grip on spending has become a crucial factor in the economic future of the whole country, the Reagan Administration is particularly vulnerable to such game playing because of management strategies adopted years ago by Caspar W. Weinberger and continued by his successor as secretary of defense, Frank C. Carlucci.

Under a system called “decentralized management,” Weinberger and now Carlucci cede to the military services much of the initiative in proposing budget priorities and recommending specific cuts. The Pentagon’s civilian leadership parcels out overall budget targets and ceilings, issues broad directives and then waits to react to the services’ proposals.

“In past administrations, the Pentagon’s top civilians have issued specific orders to the services,” dictating which programs should be reduced and which priorities protected, said Lawrence Korb, a senior defense official in the opening years of the Reagan Administration. “You need a strong analytical arm in the office of the secretary of defense” if an Administration hopes to impose its priorities on uniformed services with agendas of their own, Korb added.

Weinberger instituted his system to avoid what he saw as excessive intrusion by civilians into the domain of military experts. And as long as the Reagan Administration arms buildup was surging ahead, there were relatively few difficulties.

Tide of Spending Ebbs

The problem is that now, as the tide of military spending has crested and begun to ebb, the Pentagon’s civilian leaders face a struggle to regain control.

Driven by its own internal priorities and traditions, each service tends to protect and push for the programs it considers most important--the Navy its aircraft carriers, for example, and the Air Force its bombers--with little regard for whether all of the pieces fit together into a coordinated, efficient and affordable system of national defense.

In theory, it is the task of the defense secretary and his top civilian assistants to impose the larger perspective on the overall defense budget.

But Weinberger not only altered the budgeting system to strengthen the services’ role, he also reduced the role of civilian analysts and defense specialists whose task it is to help the defense secretary and his aides make independent judgments about the services’ detailed spending blueprints.

Tough Choices

And without a strong staff of his own experts, defense specialists say, a defense secretary is at a serious disadvantage in the complex disputes that inevitably break out when tough choices must be made about which programs to push and which to curb.

One of Weinberger’s earliest moves at the Pentagon, for instance, was to downgrade the status of the Office of Program Analysis and Evaluation, a civilian unit that had worked to impose greater discipline on military budget-makers for 20 years. Established in 1961 by Defense Secretary Robert S. McNamara and continued through the Richard M. Nixon and Gerald R. Ford administrations in an effort to impose stronger civilian authority over the Pentagon’s military brass, the Office of Program Analysis and Evaluation was stripped of its once-powerful voice in shaping the services’ spending priorities.

In the Jimmy Carter Administration, the civilian analysts--much hated by the services--had succeeded in canceling the B-1 bomber and sent the Navy packing when it proposed to build a 600-ship fleet designed to attack Soviet home ports. Under Weinberger, many of the analysts’ victories were quickly overturned.

Organizational Essence

Granted sweeping budgetary latitude, “the military services will make every effort to preserve what they see as their organizational essence, and that doesn’t always make sense in the long term,” Korb noted.

Said Gordon Adams, the director of the Washington-based Defense Budget Project, a citizen watchdog group: “The Weinberger Pentagon has let the services have their head. And there’s still a very strong urge in the services to have it all.”

The result of all this, say longtime observers of military budgets, is that Congress and the Pentagon are likely to deadlock later this year over how to achieve the Pentagon spending cuts laid out in a White House-congressional compromise reached last November.

Unable to agree on military priorities, some defense experts fear, Congress and the services may resort to plundering those budget accounts that yield the handiest deficit reductions--personnel and readiness. Those budgets keep troops busy training, ships steaming and ammunition in the bins, and they are the accounts that could matter most if war should break out.

Wishes Tough to Deny

Such an outcome would fly in the face of Defense Secretary Carlucci’s express orders. But the power of the military services, both to initiate budget proposals and to build congressional constituencies for their plans, may make many of their wishes tough to deny.

“The military services have no reason to endure any budgetary pain,” said Joseph F. Campbell, a former Office of Management and Budget official who watches the defense budget for Paine Webber. “They’ll go about this exercise just as they always have--they’ll take away stuff that’s just not painful.”

Though they represent a fraction of the services’ proposed reductions, the “gold watches” and “Washington monuments” are one way to lessen the blow.

Thus, when asked to slice $11.6 billion from its $108.7-billion 1989 budget request, the Navy performed what until last year had become an annual ritual: It included a proposal to cut a Trident missile-carrying submarine from its buying plans next year, at a promised savings of $1.4 billion.

Modernizing Arsenal

The suggestion is unlikely to be adopted by the White House, which has vowed to modernize the nation’s nuclear arsenal and has regularly rejected the Navy’s Trident proposal. If the idea somehow got past the White House, congressional defense experts say it would certainly be reinstated by Trident patrons on Capitol Hill.

Similarly, when the Air Force was ordered to find $10.5 billion worth of cuts, its reduction package included $2.3 billion saved by canceling outright the small, single-warhead missile known as Midgetman. “We just can’t afford the luxury” of building the new missile, one Air Force official intoned.

But the attachment of several key lawmakers to the Midgetman program is almost certain to make the proposed saving illusory. Congressional heavyweights such as the chairmen of the House and Senate Armed Services Committees, Sen. Sam Nunn (D-Ga.) and Rep. Les Aspin (D-Wis.), have hailed the single-warhead missile as a weapon that will foster stability in the superpower nuclear balance.

Last month, when a small clutch of congressional critics threatened to cancel the Midgetman, Aspin and Nunn moved swiftly to restore its 1988 funding in an omnibus budget bill.

Offer to Slow Production

For its part, the Army, facing cuts of $9 billion, readily offered to slow the production of its main M-1 battle tank and of Black Hawk helicopters, both slated for key roles in any European conflict. Congress, citing the need to improve the nation’s conventional forces, in recent years has consistently directed the Army to increase, not cut back, its procurement of those weapons.

In another move expected to be controversial in Congress, the Air Force is offering to strike 60 F-16 fighters annually from its original blueprint, starting in 1990. But the F-16, at about $13 million apiece the less costly of the service’s two front-line fighters, is built in the Fort Worth district of House Speaker Jim Wright, a fierce and powerful protector of hometown defense contractors.

Carlucci has said he would not tolerate such budget ploys, and many of the services’ early proposals are being returned with stern warnings to stop playing games, Defense Department officials say. But some measure of gamesmanship is virtually assured, many defense analysts maintain, because of the way Carlucci and Weinberger strengthened the services’ hands from the outset of the Reagan Administration.

‘Stretching Out” Programs

In addition to proposing cuts in popular or vital programs, the services respond to budget pressures by proposing to stretch out costly procurement plans while leaving unchanged the long-term goals. According to a November study by the Congressional Budget Office, “stretching out” programs generally drives up the price tag of each weapon bought by keeping production lines open longer and producing at less economical rates.

Often, critics like Korb complain, the more costly arsenals are bought with funds that should have been used to keep smaller inventories of weapons manned, maintained and operated at a higher state of readiness.

In the face of severe budgetary pressures, for instance, the Navy has held firmly to its goal of a 600-ship fleet, though analysts believe the service will be unable to man and operate all those ships in the more difficult fiscal times ahead. “Today’s reality leads me to conclude that there is no basis to change this Administration’s concept of the ‘600-ship Navy,’ ” wrote Navy Secretary James H. Webb Jr. in a Dec. 10 memorandum for Carlucci.

There are 35 such major weapons due to enter the costly phase of early production in the next two years, according to the Defense Budget Project’s Adams. And, as they do, the services will face a wave of new spending commitments. Only by canceling such programs now can this so-called “bow wave” of spending be averted, he contended.