TURMOIL IN THE EAST BLOC : E. European Events Outrun Intelligence Analysts, Panel Told : Defense: Pentagon budgets and plans are ‘misleading and out of sync,’ Sen. Nunn tells officials.

Swift changes in Eastern Europe and the Soviet Union are outrunning U.S. intelligence analysts’ ability to deliver timely estimates of Soviet military actions and intentions that might allow the United States to adjust its defense posture and military spending, U.S. officials said Tuesday.

While intelligence agencies scramble to assess rapidly changing events, the Pentagon’s budgets and plans are left “misleading and out of sync,” Senate Armed Services Committee Chairman Sam Nunn (D-Ga.) charged.

At a hearing of the Senate panel, Undersecretary of Defense Paul D. Wolfowitz acknowledged the tardiness of intelligence data, saying the raw information collected from Eastern Europe and the Soviet Union is ambiguous and that government agencies spend months in disputes over how to interpret it. But he defended the Pentagon’s caution in reacting to apparent changes in the Soviets’ military posture.

“We are now beginning to see evidence of a decline in Soviet defense efforts. Even so, it is still important to keep in mind the incompleteness and reversibility of many of these changes,” Wolfowitz says. “If this sounds cautious, I’ll plead guilty.”

The intelligence community--the CIA, the Defense Intelligence Agency, the National Security Agency and other intelligence-gathering organs of the government--are conducting major reviews of Soviet military spending, the political reliability of the armies of the Warsaw Pact nations, the ability of the Soviet military to rapidly return forces that have been withdrawn from Eastern Europe, the volume of supplies available to support an extended Soviet offensive in Europe and Soviet production of military hardware, sources said.

These reviews are on a fast track, but definitive results will not be available in time to factor the results into the 1991 defense budget, which is to be delivered to Congress in January, Pentagon officials said.

President Bush has ordered a 2% after-inflation reduction in military spending for fiscal year 1991, beginning next October. The military services are now trying to revise their weapons-buying and personnel plans to meet the spending target.

Defense Secretary Dick Cheney, anticipating a continued shrinkage of the Pentagon budget, has also ordered the military services to prepare for $155 billion in additional cuts for the years 1992-94.

Nunn complained that Cheney has ordered substantial cuts without timely reports on critical Soviet military issues from the intelligence agencies.

“These cuts are not based on a current threat assessment, they’re not based on up-to-date intelligence. The budget is misleading,” Nunn said. Without timely intelligence estimates, he said, “we’re just out here deliberating on a $295- (billion) to $300-billion budget without having taken into account the real world.”

Nunn’s comments followed a Senate Armed Services Committee hearing that begins a major reassessment by the panel of the changing Soviet military threat and how the United States should respond.

At a Senate Budget Committee hearing Tuesday, former defense officials testified that a smaller Soviet threat could allow the Defense Department to cut worldwide military forces sharply in the next several year.

Former Defense Secretary Robert S. McNamara said that although “the Cold War is not over . . . it is time to begin rethinking out military requirements.” He said the Pentagon could begin cutting its budget by eliminating the B-2 Stealth bomber.

Nunn called Wolfowitz before the Armed Services Committee to testify about an intelligence report completed in late September that dramatically increases the U.S. estimate of the warning time that NATO would receive of a major Soviet offensive in Europe.

The classified study, known as a “national intelligence estimate” or NIE, concludes that NATO would have at least five weeks’ warning of an impending Soviet attack, up from a presumed warning time of 10 to 14 days. Some NATO scenarios anticipated a “bolt-out-of-the-blue” Soviet attack with only 48 hours’ warning.

Wolfowitz said the increased warning time is based on improved U.S. intelligence-gathering methods as well as a stronger overall NATO defensive posture, which would force the Soviets to mobilize large numbers of troops to mass for an attack. Such a large mobilization would be quickly visible to American spy satellites and other intelligence assets, he said.

Nunn complained that the report is based on trends that U.S. analysts began noting in early 1988 but that were never reported to Congress or reflected in Pentagon budgets.

“If we’ve got this kind of performance based on the last 12 months, what can we expect with the changes that have taken place in the last few months?” Nunn asked. “Are we going to be sitting here in about 1993 and finding out the assessment in 1993 of what transpired in Eastern Europe in 1989?”

Wolfowitz responded that the Pentagon and the intelligence agencies are trying to factor the changing Soviet military picture into the current budget deliberations. “But let me emphasize that we are in a period of very rapid change, and whatever is current and accurate today is going to be quickly overtaken by events.

“And it’s going to be a tricky matter to get our timing exactly right, so that we don’t lag too far behind events but on the other hand, we don’t undermine the process by over-anticipating them,” the undersecretary said.

NATO WAR GAME--Pentagon is scaling back the annual NATO war game. A16