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$270-Billion, 5-Year Defense Cut Urged : Deficit: Democrats at the White House-Congress budget talks want deeper military reductions. A GOP participant rejects their figure as too high.

TIMES STAFF WRITER

House Democrats Thursday proposed slashing military spending by a whopping $270 billion over the next five years but a Republican participant in the White House-congressional budget talks rejected the suggested cuts as “way too high” for serious consideration.

Participants in the talks, moving toward negotiations for the first time in six weeks, turned to the $300-billion defense budget after discussing a possible three-month freeze in cost-of-living increases for Social Security recipients and federal retirees.

Rep. Leon E. Panetta (D-Carmel Valley), chairman of the House Budget Committee, said that the proposed $270-billion, 27% military spending cut would be justified because of the dramatic reduction of the Warsaw Pact threat to Western Europe.

Under the plan, Pentagon outlays would drop by $16 billion in the year starting Oct. 1 as part of a deficit-reduction package totaling at least $50 billion. President Bush and congressional leaders have agreed that a package of that size is needed to preserve a healthy economy.

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By contrast, Defense Secretary Dick Cheney has called for a 10% cut in inflation-adjusted military spending over the next five years, or about $6 billion in the coming year. There have been strong congressional pressures for larger reductions, however.

“These are just ideas--there are no agreements,” House Majority Leader Richard A. Gephardt (D-Mo.) told reporters after the talks ended for the day. “We’re in the middle stage of the discussion--we’re pulling different proposals out for consideration.”

But Gephardt said that he agreed with Panetta’s approach on defense.

Panetta said his defense option deserves serious discussion because of the need for increased deficit reduction cited by Bush in convening the summit meetings and because of moves toward democracy in Eastern Europe.

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Sen. Pete V. Domenici (R-N.M.), however, immediately rejected the military spending cuts suggested by Panetta. “They are way too high,” he told reporters. “I don’t believe anyone will support such numbers.”

A House budget resolution adopted in late April at Panetta’s urging provided for a military spending cut of $251 billion over the next five years with a reduction of $11.5 billion in Pentagon outlays in the first year.

“Now we are looking at a different situation,” Panetta said. “The Warsaw Pact no longer constitutes a threat, and we are looking at a deficit of almost $200 billion this year and perhaps $232 billion next year. . . . Defense is clearly on the table.”

Panetta said that Cheney has suggested a 25% reduction in U.S. weapons and personnel. The House Armed Services Committee estimates that a reduction in forces of that magnitude would trim spending from 18% to 27% over the next five years.

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The initial clash over defense came after participants in the budget talks discussed possible savings in the Social Security program, which traditionally has been untouchable.

“Everybody flinched” when the subject was raised, noted Sen. Lloyd Bentsen (D-Tex.), adding quickly: “But nobody took a walk.”

Panetta has observed that Social Security benefits--or at least the annual increases to keep pace with inflation--must be adjusted if the total savings from mandatory benefit programs are going to exceed $10 billion.

Rep. Bill Frenzel (R-Minn.), another participant, said that the reduction in entitlement programs such as Social Security would need to be in the $12-billion range to achieve a deficit-cutting package of $50 billion or more in the first year.

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In presenting his plan on mandatory benefit cuts, Panetta proposed an overall reduction of $5.7 billion, or less than half the amount Frenzel believes is necessary.

Domenici, noting that the talks still are in the preliminary stages, said that all options will have to be considered before a package can be assembled that will get bipartisan backing.


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