Defense Spending May Hinge on Summit : Military: Events in both Europe and Washington are pushing the issue of U.S. and Soviet troop reductions ever higher on the agenda.

Next month’s summit meeting between President Bush and Soviet President Mikhail S. Gorbachev will play a key role in determining the size of the Administration’s next defense spending proposal, White House officials said Monday, linking the summit and the budget publicly for the first time.

“The President hasn’t made a decision” yet on spending levels, State Department spokeswoman Margaret Tutwiler said. But with U.S. troops in Europe one of the Pentagon’s major budget items, he “might well make his decision in light of what he learns and from what he discusses with Mr. Gorbachev in Malta.”

When the summit first was announced earlier this month, Administration officials tried to discourage the idea that U.S. troop strength in Europe would be a major issue there. But events in both Europe and Washington are combining to push the issue of U.S. and Soviet troop cuts ever higher on the agenda.

The White House, recognizing that fact, slowly has begun to raise its own public expectations for the Dec. 2 and 3 encounter, which Administration officials resolutely refer to as a “meeting,” rather than a “summit.”

“We have a chance in the next couple of years to really enhance the peace,” Bush said Monday at a fund-raising reception in Warwick, R.I., for Republican Gov. Ed DiPrete.

The meeting off Malta is “going to be historic,” he added. “Who could possibly have predicted the dynamic change that is taking place in Eastern Europe? We are living in exciting times. We are living in times where the potential for peace . . . has never been better.”

Those unexpected changes in Eastern Europe have undermined the traditional rationale for a heavy U.S. presence in Europe, Administration officials admit. Since World War II, allied planners have feared that the Soviets would use the Soviet army and forces of its Warsaw Pact allies to stage a surprise attack into the West European heartland.

“That’s why (the North Atlantic Treaty Organization) was created, and that’s why we’ve maintained the forces we have in Europe over the years,” Defense Secretary Dick Cheney noted in a recent television interview.

Today, however, such an attack “is very unlikely,” Cheney said.

Also, the stalemate over the federal budget deficit has increased pressure in Washington for cuts in defense spending.

“We’ve got some big problems” in Congress on defense spending, an Administration official said Monday.

The capital is awash with ideas for new federal programs--Bush himself has proposed plans for a space mission to Mars, a tax credit for child care, expanded spending for early childhood education, increased federal support for low-income housing and a major “war on drugs.” But the money is not available unless something else is cut or taxes are raised.

As Administration officials and congressional leaders look for ways to fund new programs, or simply to reduce the red ink, the Pentagon’s $300-billion budget is an increasingly attractive target.

And when Pentagon planners begin to look at ways to scale back their forces, “you just can’t get there from here without taking a chunk out of Europe,” as one Army official put it.

Pentagon officials already are considering contingency plans for cutting up to $180 billion from defense spending in the years from 1992 through 1994, a three-year period during which the Pentagon had been planning to spend more than $1 trillion.

Times staff writers James Gerstenzang and Melissa Healy contributed to this story.