Congress looks for fat in defense budget

At the Pentagon the other day, an Air Force general discussing the new B-1 bomber stressed that cutting or delaying the planned procurement of new aircraft could actually cost billions of dollars in the long run.

This is because multiyear contracts would have to be broken and penalties paid, he said, even though the first B-1 squadron won't become operational for another two years.

This is one example of why it is unlikely that major weapons programs will be cut in this election year, despite high federal deficits. While the capital echoes with the voices of defense budget critics - Republican as well as Democrat - the Reagan administration's basic ''rearm America'' program is generally in place and will not be changed significantly.

Still, Congress this year is likely to cut the administration's 1985 defense increase request of 13 percent (not counting inflation) by nearly two-thirds, most analysts agree. ''The massive deficits projected for 1985 and beyond already assume that defense spending will be limited to 5 percent real growth,'' states the bipartisan Congressional Budget Office (CBO) in its recent report on how to reduce the deficit. And those who generally favor weapons procurement increases (up 20 percent in the Reagan budget) are expecting cuts as well.

''Considering the deficit . . . the defense increases are breathtaking,'' Aviation Week & Space Technology observed in a recent editorial. ''Funding growth of this magnitude in an election year, even in good times, borders on wishful thinking.''

This week, congressional committees are working on Republican-inspired measures that envision cuts for defense. The recommendations of the President's Private Sector Survey on Cost Control (the Grace Commission), which include $100 billion or more in defense savings over the next three years, were offered by Rep. William E. Dannemeyer (R) of California. And the nation's governors, here this week for the National Governors' Association's winter meeting, have called for less military spending as well.

As is his custom, Defense Secretary Caspar W. Weinberger refuses to suggest where budget-cutters could, in his view, do the least damage to the defense budget. But other administration officials concede that ''everything is on the table.''

And the services as well expect their budget increases to be reduced to something closer to 5 percent.

''Some very valuable programs would have to be cut,'' Air Force Secretary Verne Orr told a Senate subcommittee. ''But to say the the military could not survive on 5 percent would be absurd.''

Senate Budget Committee chairman Pete V. Domenici (R) of New Mexico last week said Pentagon budget authority (which totals $305 billion in the 1985 administration request) should be reduced $80 billion over the next three years. This would bring the rate of increase down to 5 percent next year and slightly less the following two years.

As former President Ford has recommended, this is likely to include the ''stretching out'' of many programs.

House majority leader Jim Wright (D) of Texas says that buying selected items over six years instead of five could save $173 billion over that period.

Lawmakers favor this approach over more drastic cutbacks because it mollifies local economic and political interests. (The B-1, for example, is built by more than 5,000 contractors and subcontractors in 48 states.)

Congress is also likely to cut those operations and maintenance accounts that do not directly affect readiness. Trimming such accounts by 3 percent a year would save nearly $16 billion over the next five years, the CBO reports.

Over the 1985-89 period, significant savings may be seen as well in efforts to hold down the costs of military retirement, which now total some $17 billion a year.

Congress two years ago cut the regular cost-of-living (COLA) increase for military retirees under age 62 to half the consumer price index. But this provision was effective only through 1985, and it was tied to a minimum raise. CBO analysts figure that making the half-COLA provision permanent and removing the minimum-raise requirement could save $3.7 billion next year and a total of nearly $22 billion through 1989.

Congressional and White House representatives resumed negotiations on reducing the federal deficit Tuesday, with Pentagon spending high on the agenda. White House officials have rejected Senator Domenici's defense budget proposal, which the New Mexico Republican said could save $80 billion over three years. And it appears, as in years past, that Congress will be on its own in trimming the Reagan defense budget.

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