Proposed Boost in U.S. Defense Budget Would Benefit State

President Clinton’s new defense spending proposal puts California in line for a boost in procurement dollars, yet the size of the increase remains very much in doubt as a contentious budget season begins.

The president announced a plan last week to spend $12 billion more on defense in fiscal 2000, and administration officials said Monday that a portion of that increase would go toward several weapons modernization programs that would bring money to California.

The Air Force is expected to seek another JSTARS airborne targeting aircraft, which costs $240 million and is built by Northrup-Grumman, largely in California.

Other new money would go to the planned F-22 Raptor fighter plane and the Army’s Comanche helicopter, both of which are expected to have important subcontracting work carried on in the state.

And California will benefit as the military next year increases spending for pay and retirement programs, which are top priorities for the White House and Congress. There are about 200,000 military and civilian defense workers in California, and nearly as many military retirees.

Even so, some outside analysts and members of Congress believe there may be less to Clinton’s plan than meets the eye. Purchases of large weapons, in particular, rank low among the administration’s priorities, they say.

Along with a $12-billion increase in defense spending in the fiscal year that begins in October, Clinton’s proposal includes spending about $110 billion over the next six years. The hike would be the largest since the end of the Cold War buildup of the 1980s, and Clinton said it demonstrates his commitment to reversing the widely perceived decline in military readiness.

Administration aides said the announcement was only a preview of a program that will not be fleshed out until Feb. 1, when the White House releases the details of its spending plan. Undoubtedly, the announcement stole some thunder from congressional Republicans, who have complained for years that Clinton was underfunding defense.

Yet for several reasons, the proposal is more modest than it appears on its face, analysts said.

The boost for fiscal 2000 includes only about $4 billion in new money, while the remaining $8 billion comes from assumed savings from lower oil prices and low inflation--which could begin to evaporate in years, if not months.

The administration’s $12-billion increase is based on a comparison with what the administration sought last year for fiscal 2000. But its $269-billion defense budget is only $2 billion more than what Congress approved last fall for the current fiscal year.

In any case, about $3 billion of the new money would go to personnel spending. The administration wants to increase military salaries by 4.4% this year, while hiking pay for some specialties by about 9% at mid-career.

About $2 billion would go to pay for another year of peacekeeping efforts in Bosnia, and the remaining $7.5 billion would be divided among the services. But some analysts believe that 20% or less will end up going to purchases of major new weapons.

The proposal does not indicate any major shift in military strategy. Indeed, defense spending is still substantially short of the amounts that would be needed for the Pentagon to meet the spending targets set out in the major strategic documents--the so-called “quadrennial defense review”--that was completed in 1997.

The proposal “is very much about continuity,” said Elizabeth Heeter, an analyst with the Center for Strategic and Budgetary Assessments, a Washington think-tank.

Will the Republicans in Congress increase Clinton’s proposal sharply, as they did last year?

Some senior Republicans have been pushing for increases of nearly $150 billion over the next six years. This morning, the Joint Chiefs of Staff are to appear before the Senate Armed Services Committee, whose newly elected chairman, Sen. John W. Warner (R-Va.), has been pushing for larger numbers.

Yet, like Clinton, the Republicans in Congress are facing powerful fiscal pressures this year. Many want to offer large tax cuts, and many want to appear to stay within the spirit--if not the letter--of the balanced budget act of 1997.

As a result, many analysts predict the Republicans will add only a few billion dollars, at most, before the spending plan is completed later in the year.

A spokesman for Rep. Jerry Lewis (R-Redlands), the new chairman of the influential House Appropriations defense subcommittee, said Lewis believes “California is going to gain through this process.” But, “how much is difficult to measure right now.”