Pentagon Considers Major Budget, Troop Level Cuts

The Pentagon, bowing to harsh budget realities at home and a changing political landscape abroad, is considering dramatically lower military budgets accompanied by troop reductions and weapon cancellations over several years, congressional sources said Friday.

Sweeping changes in the Soviet Union and Eastern Europe, coming at a time of intense pressure to curb federal spending, have led defense officials in Washington to conclude that the United States can safely consider reducing military spending below current levels.

In a marked departure from past years, Defense Secretary Dick Cheney has expressed a willingness to cut net troop strength rather than pursue the traditional tactic in times of budgetary belt-tightening of opting for a “hollow army,” a nominally large force lacking sufficient funds for equipment and training.

In an interview Friday with the Washington Post, Cheney said he believes that the military threat posed by the the Warsaw Pact has diminished enough to begin planning to make “significant” reductions in U.S. military spending for the 1991 fiscal year.

In the interview with the Post, Cheney said his proposed defense budget for fiscal 1991 would contain significant reductions in military spending. He said he would propose even deeper cuts in Pentagon budgets in the following five years.

Cheney declined to elaborate on the extent of the reductions. But the Post quoted unidentified Pentagon officials who said that a $10-billion cut was projected for fiscal 1991, or about 3% below current funding levels.

In a separate report, the New York Times said in today’s editions that Cheney has ordered the Pentagon to draw up plans for cutting a total of $180 billion in spending over a three-year period beginning with fiscal 1992.

The $180 billion in cuts, if implemented, would represent an average annual decline of about 5% after inflation. But the New York Times report said that Cheney had not yet decided whether to accept all of the proposed reductions, noting that the exercise was intended to force the armed services to identify priorities and to set an “outer limit” for actual cuts.

Cheney’s position appears to reflect a significant shift in the Pentagon’s traditional approach to its budget. Now, for the first time, the Pentagon seems prepared to consider a reduction in the overall structure, although final decisions on the Pentagon budget for future fiscal years are months away.

Meanwhile, a $286-billion defense appropriations bill for the current fiscal year neared congressional approval, with the Senate considering amendments early today as it prepared for a final vote. The measure then would be sent back to the House for concurrence before being sent to the White House.

The appropriation for fiscal 1990, which began last Oct. 1, provides for a 1% cut in defense spending after adjusting for inflation. It conforms closely to a funding authorization measure sent to President Bush on Thursday.

But its passage could trigger much deeper cuts in this year’s Pentagon budget under the Gramm-Rudman deficit-reduction law unless the White House and Congress reach a budget reconciliation agreement that balances federal spending with revenues.

Even if the immediate crisis is averted, the outlook for future fiscal years calls for additional reductions in military spending.

A knowledgeable congressional source said the Pentagon budget for fiscal 1991, which begins Oct. 1, 1990, would be at least 1% lower after adjusting for inflation than the budget under consideration in Congress for the current year.

Budgets for the following three to five years, he said, could be as much as 5% below current projections, contrasting sharply with Bush’s previous calls for after-inflation increases of 1% in fiscal years 1991 and 1992 and 2% in fiscal years 1993 and 1994.

Officials said that reductions of that magnitude would mean not only troop cuts, but cancellations of ongoing weapons programs and drastic reductions in expensive systems, including the B-2 Stealth bomber and the Strategic Defense Initiative, also known as “Star Wars.”

Despite Cheney’s previous caution, the evidence of reduced Soviet military spending and dramatic political reforms among its Warsaw Pact allies have convinced Administration policy-makers that the United States can accept scaled-back military spending.

The anticipated cuts in defense spending would allow the Administration to fund a number of new domestic initiatives, such as a war on drugs and increased support for education, without violating President Bush’s pledge that taxes would not be raised.

Final action on the fiscal 1990 defense funding bill has increased pressure on Congress and the White House to reach quickly a budget reconciliation agreement. Otherwise, passage of the defense measure will be one of the final steps in a process that will result in automatic cuts under Gramm-Rudman.

The Gramm-Rudman law could require the Pentagon to chop $7.1 billion from its 1990 budget--a 5% cut in defense spending after adjusting for inflation. Pentagon officials warned last week that the cuts would force the armed services to reduce active-duty troop levels by 170,000 to 230,000 men and women--as much as 10% of the U.S. fighting force.

Congressional sources said they expect Congress and the President to break the impasse over government spending early next week and lessen the impact that Gramm-Rudman would have on the Pentagon. A compromise under discussion would limit defense cuts to less than $2 billion.

The defense spending bill, previously approved by the House, would make the first real cut in funding for “Star Wars.” The anti-missile research program was the centerpiece of former President Ronald Reagan’s military buildup.

The $3.8 billion approved for “Star Wars” is 22% less than Bush’s request of $4.9 billion.

The legislation also would provide $4.3 billion of the $4.7 billion requested to continue production of the Stealth bomber--enough to buy two planes in fiscal 1990.