Soviets Trim Defense Spending 8.3% in Budget Aimed at Halving Deficit

The government today unveiled a $750-billion budget that cuts military spending by 8.3% and increases financing for social needs, reflecting the Soviet Union’s shifting priorities under Mikhail S. Gorbachev.

Finance Minister Valentin Pavlov said the government is planning to cut the $192-billion deficit in half by raising $83 billion in new revenues and trimming expenditures by $10.3 billion.

He told the opening of the fall session of the Supreme Soviet legislature that military spending could be cut because the Soviet Union’s “realistic and constructive foreign policy” had led to an improvement in international relations.

Directive From Parliament

The decision to cut military spending from $119 billion to $109 billion is in keeping with a directive from the Congress of People’s Deputies parliament to cut military spending by 14% by 1991, Pavlov said.

Military research alone will be cut by $3.4 billion, he said.

Officials say the 1990 budget is of an “emergency character” because of the deficit that has spun out of control as the country’s economic situation worsens. The budget deficit is only the second the Soviet government has acknowledged.

The finance minister said the government is planning to raise pensions for 60 million retirees by an average of 15% and reorient the Soviet economy toward fulfilling social needs.

Pavlov did not immediately say how the government will raise the extra money.

Earlier in the day, Gorbachev told the Supreme Soviet that the government will take firm steps to settle the ethnic dispute over Nagorno-Karabakh if Armenia and Azerbaijan cannot end it quickly.

Gorbachev said he was giving the leaders of the two Transcaucasian republics two days to help bring an end to a month-old economic blockade of Armenia by Azerbaijani workers opposing Armenian claims to the territory.

“Then, if necessary, concrete measures must be taken,” he said, without giving further details.

19-Month Dispute

Armenia and Azerbaijan, two neighboring southern Soviet republics, have been locked in a bitter 19-month dispute over control of the enclave. About 100 people have died in the ethnic conflict.

The economic blockade of mainly Christian Armenia, which receives more than 80% of its food and fuel via predominantly Muslim Azerbaijan, has left shelves bare and industry at a virtual standstill.

In other business, Gorbachev approved a request by Igor Shamshev, a deputy from Yaroslavl, to charge a group of deputies with the task of investigating an apparent move by Pravda last week to discredit former Moscow Party leader Boris Yeltsin. Pravda reprinted an article by an Italian newspaper La Repubblica that portrayed Yeltsin as hard-drinking and a spendthrift during his recent U.S. lecture tour.