Cheney Urges Defense Alternatives if Gorbachev Falters : Budget: The backup plans would provide for more funding and retain more forces.

Defense Secretary Dick Cheney, the Bush Administration’s most vocal skeptic on the Soviet Union’s reform campaign, has quietly launched an effort to draft alternative U.S. defense plans that could be activated quickly if Mikhail S. Gorbachev’s perestroika policy abruptly collapses or founders.

Cheney’s drafting of a fallback plan is spurred by growing concerns about the Soviet president’s political survival, given that nation’s mounting economic problems and domestic unrest.

“We are thinking about a more complex set of options than just one, single, good-news scenario,” Cheney said in a recent interview with The Times. “We have to take into account (the fact) that events may not unfold in a constantly progressive, optimistic fashion.

“Indeed you may have to say, ‘Hey, wait a minute, we cannot go forward with continued reduction in light of recent developments,’ ” Cheney said.

The new backup defense budgets would provide for more funding and retain more forces than the $1.5-trillion five-year budget Cheney presented to Congress in January, Pentagon officials say.

They could be sent to Congress at a moment’s notice if Gorbachev’s program of troop withdrawals and defense cutbacks are curtailed or canceled, or if the Soviet Union plunges into chaos.

Cheney launched the planning for the alternative “bad news” budgets Monday in a meeting with the military’s 10 principal field commanders at the Pentagon. He is expected to conduct a series of meetings throughout the summer to draft the larger defense-spending plans. The dimensions of the alternative budgets are expected to emerge by the fall.

The move is certain to be controversial on Capitol Hill, where many lawmakers have been clamoring for more defense budget cuts and thus a larger “peace dividend.”

In recent weeks, however, even many of Congress’ most ardent defense budget-cutters have expressed concerns about the Soviet position on independence for the Baltic states, growing economic problems and the prospect of slower-than-expected progress on the reduction of Soviet forces.

Among the scenarios that drive Cheney’s latest budget exercise are the prospect of Gorbachev’s political collapse, a tailspin in the Soviet economy or the sudden and violent dissolution of the Soviet Union.

“The Soviet economy is a very important theme in this,” said one senior defense official. Under one scenario that could justify a change of the Pentagon’s spending plan, the Soviet economy would revert to heavy-defense production as a spur to its economy. “You’d have to wonder why, under that circumstance, we’re beating our swords into plowshares,” said the official.

Cheney last year sparked intense controversy by suggesting that Gorbachev could be toppled and replaced by a Soviet leader hostile to the United States. In spite of his doubts, however, he initiated a series of budget reviews which, over a year and a half, cut more than $250 billion from the military services’ original 1990-1994 spending plan.

Many lawmakers and analysts have called the spending blueprint a timid response to a profound reduction in the military threat.

But Cheney has said that his spending plan, which proposes to shrink the budget by 2% each year for the next five years, was based on a “rosy scenario.” The declining budgets assume that Gorbachev remains in power, that the strategic arms treaty sharply reducing long-range nuclear weapons has been signed and implemented, that the Soviets have withdrawn all their forces from Eastern Europe and that the Warsaw Pact has become “a relic of history.”

“That’s the most optimistic possible outcome,” said Cheney in a recent interview. “But we also want to be in a position to say, what happens if you don’t get a CFE (conventional forces in Europe) agreement, what happens if the Soviet withdrawal from Eastern Europe stops, what happens if for one reason or another the START agreement is not concluded, or that there are developments in some other part of the world that require reconstitution of significant U.S. force?

“We in fact are building a long-range plan” that would take such setbacks into account, he added.

Cheney and other officials said the new plans would focus on which forces must be preserved to respond to threats. Among the important questions are which Army units can be demobilized or removed from Europe and when, and which naval forces could not be replaced quickly if they were mothballed ahead of schedule.