Bush Warns on Deep Defense Cuts

President Bush warned Congress Friday against rushing to reap a “peace dividend” from deep cuts in the defense budget, saying it is impossible to know how permanent the “thunderous changes” in Europe will be.

Moreover, he argued, the need to maintain a strong military was demonstrated by last month’s invasion of Panama, which he called a “superb, beautifully coordinated operation.”

“This is not a time when we should naively cut the muscle out of our defense posture,” the President declared in firing the opening shot in what could be his biggest fight with Congress this year.

Bush’s audience of 1,600 businessmen and women received him warmly but sat silently as he cautioned against making deep cuts in Pentagon spending.

In his speech, the President scored the fast-growing number of lawmakers who are planning to shift projected defense expenditures to social programs, saying: “Unfortunately, what is being packaged as a peace dividend is not money in the bank. It is more like a possible future inheritance.”

In extending the analogy, Bush said that “whenever a potential inheritance looms, there are those eager to rush out and squander it--to buy new things, to spend, to spend and to spend . . . . Then the bills start coming. And the inheritance may not.”

He suggested that any defense savings must be applied to reducing the federal deficit, not to new spending programs. That point drew enthusiastic applause.

The Pentagon is preparing a five-year military spending plan that is expected to call for yearly 2% reductions after adjusting for inflation.

A number of liberal legislators, notably Senate Majority Whip Alan Cranston (D-Calif.), have vowed to push for cuts up to four times as deep.

Bush said that “we like what’s happening” in Eastern Europe and the Soviet Union. “But, just as it would have been impossible six months ago to predict those thunderous changes, it’s impossible today to know what will unfold in the next six months, let alone the next six years.”

However, he said, “in this world of change, one thing is certain: America must be ready. And, as excited as I am about the changes moving toward a more peaceful Europe, America must be strong. And a strong America means not only a strong economy. It still must mean a strong defense.”

As he did in a Florida speech earlier this week, the President prodded Congress to take quick action on a number of Bush proposals left hanging last November, when the lawmakers adjourned until Jan. 23.

Proposals to clean up the air, cut the capital gains tax, combat crime and improve child care benefits are “bogged down in the jungles of Capitol Hill,” Bush complained. But he softened the protest, saying, “I am not here to assign blame. I am here to suggest we move forward.”

The President said that his fiscal 1991 budget, which he will submit to Congress on Jan. 29, “must reduce barriers to economic growth” and “must keep interest rates low.” He said that he was “encouraged” by falling interest rates but he wants “to see them lower.”

Bush visited an inner-city high school here as part of his campaign to promote volunteer efforts. He saluted a program in which adult mentors work with schoolchildren to try to reduce the city’s 40% dropout rate.

At a session with some of those in the program, Bush said with feeling, “I’m convinced that we can win this damn battle against narcotics that is just decimating a lot of families. And I get inspired by this. I am very, very grateful to all of you for what you’re doing.”

Several students and teachers pressed Bush on the need for more federal funding of education, but he repeatedly stressed that the main burden should be borne by state and local governments and volunteers.

The President named the mentor program, known as the Cincinnati Youth Collaborative, as his “40th daily point of light.”

That designation is based on one of his 1988 campaign themes, in which he termed volunteer efforts “a thousand points of light.”