BUSH BUDGET PRIORITIES : Bush Would Freeze Defense Funds 1 Year, Then Allow Rise

Seeking to end four years of defense budgets that lagged behind inflation, President Bush Thursday offered to freeze Pentagon spending for one year if Congress then would accept slow but steady growth in later years.

The one-year freeze on defense spending would represent a concession by Bush, who generally shared former President Ronald Reagan’s commitment to ever-higher Pentagon budgets.

Struggle With Democrats

However, reflecting the fact that defense spending is a major factor in his over-all budget struggle with the Democratic Congress, Bush indicated that he would accept the one-year defense freeze only if Congress agreed not to raise taxes and to meet the Gramm-Rudman deficit reduction targets for total federal spending.

Bush also demanded that lawmakers use savings from the Pentagon for “priority initiatives,” such as fighting drugs and promoting long-term economic growth.

Under Bush’s new budget, Pentagon spending would be held at current levels next year: a total of $299.3 billion for the fiscal year beginning Oct. 1. The defense budget then would rise by 1% in each of the next two years. In 1993, the final year of Bush’s term, the blueprint calls for 3% growth in funds for the Pentagon.

Bush’s plan would require the Pentagon to cut more than $6 billion from a spending plan proposed in January by the Administration of former President Reagan.

Sen. Lloyd Bentsen (D-Tex.), who gave the Democratic response to the President’s speech, applauded Bush’s plan.

“I think that that’s a move in the right direction, cutting back from the increase after inflation that President Reagan was proposing,” the senator said.

“There are two ways to lose this great country of ours,” Bentsen added. “One, by military confrontation, and the other, by economic bankruptcy. That’s the tightrope you have to walk. And so we ought to level off defense spending, and I support that.”

Backs Missile Defense

Bush, in reviewing his defense plans, called for continued modernization of U.S. strategic nuclear weapons, promised that he will “vigorously pursue” the “Stars Wars” missile defense program and pressed for greater efficiency in Pentagon purchasing.

Bush’s Pentagon budget plan remains the sketchiest of blueprints, however, designed to guide the work of Defense Department leaders who are not yet in place. The nomination of Defense Secretary-designate John Tower remains mired in controversy brought on by repeated allegations about the former Texas senator’s personal conduct as well as his financial dealings with defense contractors.

And with the Tower nomination on hold, little has been done to fill the key positions under the secretary--where most of the detailed work on Pentagon budgets must be done.

Bush’s outline for defense spending calls on the defense secretary “to make hard choices to reduce management overhead by eliminating unnecessary layers of bureaucracy, improving the quality of defense personnel at all layers and eliminating or deferring lower-priority programs.”

The Pentagon was instructed to fill in details of the defense budget within 60 days and to recommend management improvements for the acquisition process within 90 days.

Bush also challenged Congress to reform its own management of defense issues, telling lawmakers that “many of the changes can only be made with the participation of Congress.

“We need fewer regulations,” said Bush. “We need less bureaucracy. We need multiyear procurement and two-year budgeting. And frankly, we need less congressional micromanagement of our nation’s military policy.”

Bush had counted on Tower to follow through on many of these points on Capitol Hill and in the Defense Department’s sprawling bureaucracy. But with Tower’s confirmation stalled until at least Feb. 21, work at the Pentagon has ground to a virtual halt, except among a small group of Tower associates already in place in key positions.

Rhett Dawson, an attorney who served as counsel to the Senate Armed Services Committee, is coordinating Tower’s transition team from a small suite of offices in the Pentagon.

Two other close Tower associates, Navy Secretary William L. Ball III and acting Air Force Secretary James F. McGovern, are directing broad budget reviews within their own offices, defense officials said.

Much Different Budget

Meanwhile, the rest of the Pentagon has been proceeding on the basis of a much different budget presented earlier this year by former Defense Secretary Frank C. Carlucci. Carlucci’s proposal asked for a growth rate of 2.1% over this year’s level and called for defense spending to grow by at least 2% for each of the next four years.

In a speech last November, Carlucci warned that further cuts to the final Reagan budget plan would force a retrenchment of worldwide American commitments or degrade the fighting readiness of American forces.

To maintain flat defense budgets, Carlucci said, the Defense Department would have to choose between “hollow(ing) out our forces” by cutting back on pay, training, spare parts and ammunition, or trimming the size of the armed forces.