Chasing Demons While America Deteriorates : Budget: The Pentagon’s version of reinventing itself--domestic investments can wait. Clinton’s pledge to rebuild country is a casualty.

When Bill Clinton and Al Gore tout their ideas to make government “work better and cost less,” they tend to overlook the one bureaucracy that issues seven of 10 government paychecks.

Nearly two weeks ago, the Pentagon released its own “bottom-up review” of its operations. Its conclusion: Although the collapse of the Soviet threat has changed the world, the military need not change with it. Accordingly, military spending will, on average, remain near Cold War levels, dropping to a still hefty $260 billion a year by 1999.

The Pentagon plan to “reinvent” itself also makes some unspoken choices about this country’s priorities--choices that would surprise, if not appall, most Americans. In short, they are choices to chase phantoms abroad while sacrificing vital investments at home.

The new budget law passed last month by Congress virtually ensures such an outcome by freezing all discretionary spending for the next five years. Most domestic and military programs must compete for funds under the spending ceiling. The Pentagon now consumes more than 50% of all discretionary spending. A dollar spent by the military is a dollar that can’t be spent at home.

When Clinton was a candidate, he rightly contended that the country suffers not simply from a budget deficit, but from an investment deficit as well. During the ‘80s, investments vital to any advanced economy--in children, education and training, infrastructure, and research and development--were cut by about one-third while the Pentagon enjoyed the largest peacetime buildup in its history.

To reverse this trend, Clinton the candidate pledged to commit $50 billion more a year to vital investments. But his pledge was an early casualty in the deficit-reduction struggle. So with the lid on spending, choices have to be made. And, in case after case, when the choice is between continued military spending and new domestic spending, the former prevails. Consider:

* On the first anniversary of the Los Angeles riots, the Milton Eisenhower Foundation published a plea for America’s cities. Things are bad and getting worse, the report concluded, but we know what works, from Head Start to community corporations. It urged the Congress to make a long-term commitment to the cities, contending that $30 billion a year for 10 years would make a dramatic difference. The Eisenhower study was critically acclaimed, but it went nowhere. Not much urban investment survives in the Clinton budget, and spending on housing and urban development is slated to decline in the near term.

The Pentagon, by contrast, has decided that sustaining the military forces that routed Iraq in Operation Desert Storm is not enough. Its standing forces are now “sized” to fight two Desert Storms, almost simultaneously, at opposite ends of the Earth, with no allies. Gen. Colin L. Powell, former chairman of the Joint Chiefs of Staff, conceded that it was “very unlikely” that such a scenario would ever happen. But he claimed that we couldn’t allow possible future military involvement in the Gulf to give North Korean strongman Kim Il Sung any ideas.

North Korea? The United States stood guard on the Korean peninsula for 40 years to counter the security threat posed by the Soviet Union and China. Today, North Korea is an isolated, impoverished communist monarchy on the brink of collapse. It is armed to the teeth, but South Korea has twice its population and 10 times its economic production. With a little aid from the United States, it could surely afford to defend itself. Yet, the Pentagon plans to spend $60 billion a year on soldiers and weapons devoted primarily to defending South Korea from a conventional attack from the North.

* In his campaign document “Putting People First,” Clinton promised to devote $20 billion a year to a Rebuild America Fund. It would counter the decade of underinvestment in our infrastructure, focusing on transportation (including high-speed rail), information highways, environmental technology and defense conversion. These long-term public investments would not only make our economy more efficient, they also could be directed to communities most hurt by defense cuts.

Little of this promise survives today. Federal investment, as a whole, is likely to decline in next year’s budget. Appropriations for magnetic levitation trains, the President’s major high-tech initiative, have virtually been eliminated in the House. Total investment in infrastructure is slated to increase by less than $3 billion.

The Pentagon’s bottom-up review included a pitched battle over a different kind of infrastructure: how many aircraft-carrier battle groups the Navy would keep. During World War II and through much of the Cold War, the Navy operated with 12 carriers. Now, as Secretary Les Aspin reports, “these missions are no more. Without the Soviet Navy, no one challenges us for control of the seas.” Today’s Navy “shows the flag” and projects power to distant and rather mean shores. So how many aircraft-carrier battle groups does the Navy “require” for its new missions?

The same 12, of course. But according to the Congressional Budget Office, if the carrier battle groups were cut to 10, $16 billion would be saved over five years. If they were reduced to six, with one trainer, defense analyst William Kaufmann estimates that the long-term savings would total $20 billion or more a year. Unfortunately, we will spend that $20 billion to parade on the seas and not build a modern infrastructure.

* No one talks more avidly about the importance of education than the President. Yet, in next year’s budget, funding for education and training is slated to decline by about $1.4 billion dollars, a cut of about 4% in real terms. Meanwhile, such competitors as Germany spend dramatically more on training the best-educated and now the highest-paid work force in the world.

Meantime, the Pentagon reported that it will spend more than $12 billion in Germany alone this year to support U.S. forces and their dependents stationed there. The German government has discussed reducing its military forces to 200,000 soldiers to ease its fiscal crisis. The United States, by contrast, plans to sustain 100,000 troops and at least that many dependents in Europe for the foreseeable future.

It is said that the last emperor of the Chin Dynasty became obsessed with demons. He bankrupted his empire to build an army of life-sized ceramic soldiers that could be buried with him and protect him from his fears.

The United States is too wealthy to be ruined by a military budget that is slowly declining. But we are likely to spend billions trying to bring order to an unruly world of phantoms while our streets grow more violent, our schools degenerate and our economy languishes. Surely, it is time to reinvent the military, too.