WHERE THE CANDIDATES STAND ON NATIONAL DEFENSE. The Reagan administration ``rearmed America.'' But it also saw waste in the Pentagon and huge budget deficits. Can the next president keep the US strong while streamlining spending? Third in a series. DUKAKIS

MICHAEL DUKAKIS is presenting himself as the sort of responsible pragmatist whom, he says, the nation's military needs at its helm. Governor Dukakis has pledged to maintain a ``relatively stable'' defense budget, adjusted for inflation. But he has also promised to manage the Pentagon so as ``to get a dollar's worth of security for every defense dollar spent.'' That means, he says, keeping a tighter rein on the Pentagon's procurement process, a system tarnished by scandal.

Mr. Dukakis would effect a fundamental shift in priorities from nuclear to conventional weaponry. He has been unenthusiastic about proposals to modernize aging missiles in the US arsenal. ``I don't rule out modernization,'' he stated in last week's debate with Vice-President Bush. ``But there are limits to what we can spend.''

Consequently, Dukakis has opposed deployment of the multiple-warhead MX missile and the mobile, single-warhead Midgetman missile. Under pressure from Democratic defense experts, however, he has indicated a willingness to rethink his opposition to the Midgetman.

Meanwhile, he has said that the strengthening of conventional forces would be his top national security priority. His proposal of a ``conventional defense initiative'' has raised eyebrows among defense experts of both parties, however. They note that such a drive might well fly in the face of the fiscal realities the next president will face.

``The fact is that nuclear weapons are cheap, cheap, cheap,'' says Kenneth Adelman, a former Reagan-administration director of the Arms Control and Disarmament Agency. ``Eighty-eight percent of the defense budget is already conventional. Only 12 percent is strategic. You can't take the money you save from cutting down in strategic forces and put it into conventional weaponry. So where does the money for this conventional defense initiative come from?''

Dukakis has been vague on this point, as well as on the price tag that his conventional buildup would carry. In position papers, Dukakis has stated that he would improve NATO forces through ``more coordinated planning.'' But those same papers have also conceded that ``some targeted new investments are necessary'' so that things like artillery shells and trucks can be stockpiled.

He has said that he would scrap two planned new supercarrier task forces, using the money saved for more antisubmarine weapons and sealift ships. He has also said he would not buy any more B-1 bombers.

Dukakis insists that European countries must do more in shouldering their ``fair share'' of NATO defense costs. He says that he opposes the unilateral withdrawal of American troops from Europe, however.

The governor is in favor of a comprehensive nuclear test-ban treaty and a negotiated superpower moratorium on flight tests of ballistic missiles - measures that are popular with peace activists, though with few arms control experts. At the same time, he supports negotiations toward a Strategic Arms Reduction Treaty that would scrap half the intercontinental ballistic missiles stockpiled by the United States and the Soviet Union.

He also favors scaling back the Strategic Defense Initiative (``star wars''), though he would maintain sufficient funds to continue basic research into a missile-defense system. The program currently is funded at about $4 billion a year. Dukakis would scale back funding to about $1 billion for a program that he has dismissed as a ``fantasy.''

Some defense analysts say the savings that would result from these policies will be insufficient to pay for the new programs Dukakis has said he supports if, as he also says, the Pentagon's budget is to remain effectively constant.

Lest the public think he is only opposed to new weapons systems, Dukakis has made a point of ticking of lists of new or planned weapons that he does support - including new tanks and antitank weapons, the Stealth bomber, Trident II submarine-based missiles, the Advanced Tactical Fighter, the SS-20 Sea Wolf fast attack submarine, and advanced cruise missiles.

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