Aspin Begins Reshaping Defense Dept. : Pentagon: Reshuffling is designed to reflect Clinton’s priorities of halting arms proliferation and linking the military with the civilian economy.

Defense Secretary Les Aspin began reshaping the Defense Department to emphasize Clinton Administration priorities Friday, creating new Pentagon fiefdoms to link defense programs with civilian economic growth and to oversee efforts to stem the proliferation of weapons of mass destruction throughout the world.

Another newly created office would draft Defense Department policy seeking to support democratic reforms in the former Soviet Union--and to prepare plans for U.S. military responses in the event the reforms were reversed.

Two of the Pentagon’s top jobs will probably be filled next week, when President Clinton is expected to nominate William Perry, a San Francisco investment banker, to become deputy defense secretary, and Frank G. Wisner, a former ambassador to Egypt and a George Bush Administration State Department official with close ties to Aspin, to become undersecretary of defense for policy.

Perry, who has long argued that the nation must continue to press its high-technology edge in weapons, is expected to play a key role in overhauling the Pentagon’s unwieldy acquisition system and in ensuring that the defense industry remains vital as the military budget shrinks.

As they prepare to staff many of the Pentagon’s senior jobs, Aspin and his senior advisers are scaling back some traditionally important posts and enhancing the importance of others.

One office expected to be beefed up for frequent use again is the one in which Aspin himself made his start in the Pentagon: the Office of Program Analysis and Evaluation, or PA&E;, known as the “whiz kids shop” when it was created by Robert S. McNamara in 1961. By contrast, the Pentagon’s once-powerful office for international security policy, which oversaw nuclear arms control matters, now will see its duties dispersed among a number of other offices.

Aspin’s reshuffling was billed by a senior aide as a “creative restructuring” designed to make the Pentagon bureaucracy conform to the post-Cold War priorities of Clinton and his new secretary of defense. Throughout the campaign, Clinton stressed that weapons non-proliferation policy and economic policy would be central themes of his Administration.

Aspin has said that regional threats to U.S. interests in places like Iraq, North Korea and Africa will replace stresses in the former Soviet Union as the driving force of U.S. military policy, and he said he would establish a new assistant secretary to oversee policies toward those areas. Another newly created assistant secretary slot would oversee policy toward the former Soviet republics.

Marking the greatest contrast to the Bush Administration’s policies will be a newly created Pentagon office of assistant secretary for economic affairs. That office will oversee policy aimed at fostering the conversion of defense industries to civilian manufacturing and maintaining a base of companies the Pentagon can depend on to produce weapons in a national emergency. It would also oversee policy designed to encourage the commercialization of military technologies and the civilian use of unneeded military installations.

During 12 years of Republican rule, the Pentagon maintained a strict distance from policy that would make the government an active participant in industrial policy. Clinton has promised, however, that the government will play an active role in restarting the economy.

But Aspin’s most visible imprint on the Pentagon’s structure is expected to be the creation of a powerful office of assistant secretary for strategy and resources, which would match Pentagon budgets with the Clinton Administration’s foreign policy and military commitments worldwide. The job is expected to go to Walter Slocombe, a Washington attorney and a national security staff member during the Richard M. Nixon Administration.

In recent years, Aspin frequently criticized the Bush Administration for failing to design its budgets from the bottom up on the basis of U.S. military commitments abroad.

In the coming years, Aspin has said, it will be a particular challenge to link budgets and commitments because the Bush Administration planned for more military commitments than even its larger budget projections could fund. Because Clinton has called for $60 billion in defense cuts beyond those sought by Bush, his budget is expected to require a substantial scaling back of U.S. military commitments.