Vote Upsets Plan to Cut Nicaragua Army : Central America: Lawmakers defy president by approving deeper budget reductions than those negotiated with the Sandinista-led military.

A carefully negotiated plan to reduce the Sandinista-led army in Nicaragua was upset Saturday after the country’s National Assembly cut nearly $20 million from a slimmed-down defense budget submitted by President Violeta Barrios de Chamorro.

Chamorro’s entire National Opposition Union bloc, a majority in the assembly, defied the president by voting late Friday to lower defense spending from $166 million in 1990 to $58.8 million in 1991, less than 12% of next year’s $495-million national budget.

The Nicaraguan leader, who had proposed spending $78.6 million for defense, announced Saturday that she will veto the bill. The army, which had accepted her cuts, warned that it “will not permit” further reduction of its manpower.

“This (veto) doesn’t mean I am against disarmament, but the reduction of the military has to be gradual,” said Chamorro, who arrived here and began meeting with the civilian presidents of Costa Rica, El Salvador, Guatemala, Honduras and Panama.

The three-day talks will focus on stalled peace negotiations in El Salvador, where leftist guerrillas escalated their attacks last month, and on steps to integrate Central America’s economies.

Nicaragua is heading an effort, endorsed at a summit in June, to reduce armies throughout the region. Since Chamorro took office April 25, Nicaragua’s army, once the region’s largest, has been cut from 80,000 to 28,400 members, making it smaller than those in El Salvador and Guatemala.

Those two armies have resisted cuts in their ranks. Last month, Honduran officers sacked the chief of their armed forces for yielding to a 10% reduction in defense spending.

Each cutback in Nicaragua has been negotiated with Sandinista Gen. Humberto Ortega, the army commander, since Chamorro’s election ended a decade of Sandinista rule and eight years of war between the army and the U.S.-backed Contras. Ortega is retiring 5,000 of his 14,000 officers on the basis of Chamorro’s budget.

The sharper cuts approved by the assembly, in a 52-39 vote, signaled a revolt in Chamorro’s 14-party coalition against continued Sandinista control of the military. Sandinista lawmakers, voting against it, warned that the cuts would destabilize the country by making the army too weak to control civil disorders. An army statement Saturday said this would “plunge Nicaragua into chaos and bloodshed more terrible and painful than (conflicts) in the past.”

Antonio Lacayo, the president’s chief adviser, said: “Far from contributing to an additional reduction (of the army), this could paralyze, abort or reverse the process and threaten national security.”

If the assembly overrides Chamorro’s veto, Lacayo said, virtually all the remaining officers would have to go, as salaries make up 60% of the army budget. This would be “intolerable,” he said. “It would practically put an end to the army.”

Nicaragua still has a large fleet of Soviet-supplied combat helicopters. Officials gathered for the summit in this Pacific Coast resort were stunned to see two of them land here, ferrying the presidents one by one from the airport in San Jose, Costa Rica’s inland capital. Costa Rica, which abolished its army in 1948, borrowed the choppers from Nicaragua’s air force.