Aspin Says Defense Cuts to Be Less Than Announced : Pentagon: Trims will be below the $10.8 billion he told services as some program costs increase. Major shifts to domestic projects are in doubt.

Defense Secretary Les Aspin said Thursday that he will propose substantially smaller defense spending cuts than the $10.8 billion he has ordered for the armed forces, raising new questions about how much President Clinton can shift to domestic programs.

Aspin said the actual reduction will be smaller because he plans to increase spending for other defense programs, such as fast-sealift ships, high-technology research, environmental cleanup and aid for defense industries that have been hurt by previous spending cuts.

The result “will be a net cut, but it certainly is not going to be as big as the gross cut that you might get from this $10.8 billion of adding up the cuts that were given to all of the services,” Aspin said in a speech here before the American Defense Preparedness Assn.

At the same time, budget officials said Aspin’s figures may be challenged by the White House Office of Management and Budget, which authorities said would have preferred deeper cuts than the Pentagon is proposing. It has accepted Aspin’s targets for now, however.

Although the figures still are preliminary, they indicate that Clinton could be hard-pressed to realize as much in savings in the fiscal 1994 military budget as he had hoped, either for transfer to domestic programs or for reducing the federal budget deficit.

Congressional leaders have contended that, with the federal budget deficit so large, any money for social initiatives will have to come largely from defense cuts. Even the $10.8 billion that Aspin had ordered from individual armed services was seen as too small to satisfy such needs.

What is more, the Administration is being plagued by fears that the George Bush Administration may seriously have underestimated the costs of existing military programs by as much as $50 billion over five years.

Aspin has launched an investigation into allegations that Bush officials exaggerated the likely savings from carrying out management reforms, while underestimating the cost of long-term weapons procurement. Aspin has asked that the inquiry be completed in March.

Clinton has said he plans to submit his fiscal 1994 budget to Congress in late March. He is expected to outline the major elements of a new economic stimulus package--presumably including some general budget figures--on Wednesday.

At the same time, however, officials said the Administration could propose additional--and possibly sizable--cuts in the military budget later this year after a major review of the longer-range defense spending that Aspin has scheduled for mid-summer.

The defense secretary appears to be following a two-part strategy on budget cuts for fiscal 1994, proposing only a modest package of cutbacks now with plans to take a closer look at spending levels as part of the mid-summer review.

Aspin’s initial directive last week ordered the Army, Navy and Air Force to cut some $8.3 billion from their budgets for fiscal 1994, which begins Oct. 1, and earmarked another $2.5 billion in cuts from the Strategic Defense Initiative, also known as the Star Wars program.

In his speech before the defense association, Aspin reiterated Clinton’s campaign pledge to cut an extra $60 billion from the defense budget over the next five years, defending it as still attainable and adequate to meet the nation’s military needs.

He also denied that the military is resisting Clinton’s proposal to slash the number of U.S. troops in Europe to 100,000 by the end of fiscal 1996, instead of the 150,000 that the outgoing Bush Administration had proposed.

“In fact,” he said, after his order to cut spending by $2.5 billion, “the Army may want to accelerate that and to realize the savings sooner.”

Aspin said his office would make its initial decisions next Monday on which cuts it wants to include. A formal proposal must be sent to the White House by Feb. 22. The plan would then be reviewed by OMB and sent on to Clinton for final rulings.

But no matter what kind of defense-spending cuts Clinton proposes, there is no guarantee that Congress will accept them. Lawmakers already have begun calling for far-deeper reductions in military outlays and the pressure is expected to increase.