Tough Defense Budget Resists Cuts

ON Capitol Hill members of Congress are sharpening up knives and preparing to go after the defense budget. Problem is, the defense budget is proving more slash-resistant, in the short term, than they had planned on. The way defense spending is structured means it is difficult to make deep reductions right away. Cuts will likely start small in fiscal 1991, and blossom into larger reductions in later years.

This is an unexpected obstacle for lawmakers who have been listening to CIA director William Webster, among others, describe how the Soviet military threat to Europe is dissolving. No matter what the political consensus is, defense spending is not going to be cut by 25 percent next year - or even by 10 percent.

``The Chinese have the Year of the Rat, and the Year of the Snake,'' says Rep. Les Aspin, chairman of the House Armed Services Committee. ``This year, on the defense budget, we'll have the Year of Frustration.''

President Bush has proposed a $307 billion defense budget for fiscal 1991. But even Mr. Bush has been reported willing to accept a much bigger whack from defense than his administration had first proposed. Senior administration officials, quoted anonymously in the New York Times Sunday, said Bush would accept perhaps as much as a $10 billion to $11 billion cut - instead of the original $3 billion cut.

That would, it seems, recognize some realities. In the Senate, Budget Committee chairman Jim Sasser (D) of Tennessee has called for a $12 billion reduction in the administration's defense outlay plans. Congressional sources say the Senate probably will end up calling for about $10 billion.

$17 billion cut proposed

In the House, liberals have backed a proposal by Rep. Barney Frank (D) of Massachusetts to slash $17 billion from defense spending. But Rep. Aspin and other House leaders have been arguing that it is too hard to make a big cut now, and that the House should vote for a small reduction in '91 and larger cuts later.

``It makes more sense to look at defense savings as something that will be accomplished over four to five years,'' says a House Armed Services committee staff member.

Payments over time

The problem stems from the way the Pentagon spends money. When the Defense Department buys, say, an aircraft carrier, it gets Congress to authorize the carrier's purchase price in one year's budget. But the Navy then takes the sum and, in essence, keeps it in an account, doling payments as work progresses.

Though other weapons such as airplanes take less time to build, the process is the same. Only a portion of appropriations for each program are turned into outlays, or actually spent, each year. So canceling a weapons program saves little right off.

But as the years roll along, potential savings from weapons cancellations grow larger. Killing the B-2 bomber program, for instance, would save only $400 million off defense budget outlays in 1991. But between now and 1991 it would save $14 billion in outlays, according to information provided by Representative Aspin to the House Budget panel.

Troop reductions would similarly take some time to pay off, largely because the Pentagon would find it logistically impossible to show hundreds of thousands of soldiers the door quickly. Accelerating President Bush's proposed 80,000 troop cut in Europe to 1992 would save little in the short run, but almost $12 billion by '94.

One things is sure: deep reductions in the defense budget are coming. The congressional testimony of CIA director Webster earlier this month in which he called many changes in Eastern Europe ``irreversible'' was a turning point for Congress.

Though Secretary of Defense Richard Cheney has groused about Webster's optimism, even the official threat assessment of the Joint Chiefs of Staff now talks about a ``dramatically different security environment emerging that is principally characterized by a diminished Soviet threat.''

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