Ghost From Vietnam: The Budget

THE specter of Vietnam looms large as Secretary of State James Baker has acknowledged that the US will now keep a long-term military presence in the Persian Gulf. Almost 100,000 US troops are already there. Those who raise the prospect of another quagmire like Vietnam point to an open-ended, escalating commitment. But there is another parallel to Vietnam: the budget process.

Prior to sending US forces to Vietnam, 1965 was to be a prosperous year. But Lyndon Johnson seriously underestimated Vietnam's cost. As the cost rose, neither the president nor Congress would make hard choices about the nation's priorities.

Budget decisions reflect a government's priorities. Ideally, budget talks such as those today between the White House and Congress determine resources for the country. The budget process is the occasion to make choices and help with debating the role the US will play in a post-cold-war world where regional instability is a danger. A debate on the budget must not be avoided.

In 1965 and 1990, military costs were undertaken at a time of high hopes for domestic spending. With the improvement of US-Soviet relations, the military ``peace dividend'' has been viewed by some as a source for reducing the budget deficit or financing the savings and loan bailout. Others think the ``peace dividend'' will provide resources.

Similar hopes existed in 1965 when military cuts were seen as the key to Great Society programs. Big cuts in the 1965 defense budget brought a surplus. A cut in 1966 allowed President Johnson to reallocate monies.

However, a tough war meant Mr. Johnson had to commit more American soldiers to South Vietnam. At the beginning of 1965, there were 24,000 US military advisers. By the end of 1965, there were 185,000 US troops. The military needs in Vietnam resulted in greater pressure on Johnson to divert US resources away from domestic programs.

But instead of cutting back on domestic programs, Johnson sought to avoid congressional or public debate on policy and therefore reduced neither war nor social spending. In July 1965, he told congressional leaders they would ``get the bill later.'' Hardly anyone in Congress challenged this, or asked for cost estimates.

The first bill for Vietnam came in January 1966: $12.5 billion - more than anyone had thought. Even as war costs skyrocketed, Johnson insisted the US could afford ``guns and butter.''

But the quick increase in military costs overheated the economy, diverted resources from the domestic to the military sector, accelerated inflation for a decade, and exacerbated the balance of payments problem. Ultimately, these problems significantly undermined the government's ability to fund sufficiently many of the Great Society programs.

Johnson prevented a debate on policy priorities, refused to make tough budget decisions, and avoided political conflict between foreign policy and domestic needs. But avoiding hard decisions is only a short-term method. Johnson had to choose between the war and domestic programs. In 1968, he chose to reduce America's commitment in Vietnam; by then it was too late.

In the fall of 1990, the US also faces a policy dilemma. Given the size of the deficit, an uncertain economy, and pressures for federal spending, certain sacrifices and trade-offs are needed. But will President Bush and the Congress face them? Expectations may have to be curbed. But will they have the political courage to determine America's priorities?

To avoid debate, as Johnson did, only hurts the country. Unlike Johnson, at least Mr. Bush and Congress agree the budget is important. The Pentagon's admission that US military operations in the Gulf will cost $2.5 billion (not $1.2 billion) by the end of September is honest.

Mr. Bush must continue to be honest about military costs. Using the Iraqi invasion as an excuse to protect armies and high-tech weapons will make it hard to arrive at a realistic budget. Nor must the Democrats use the ``peace dividend'' as an excuse to preserve all domestic spending. Members of both parties should not postpone dealing with these issues, despite special interests.

Doing nothing is no solution. For Republicans or Democrats to rely on the Gramm-Rudman-Hollings budget-amending formula, which calls for across-the-board spending cuts, is to make the same mistake of Johnson did: tough choices are ignored. Gramm-Rudman cuts ``equally,'' regardless of priorities or values.

As debate broadens to discuss America's world role, and federal spending, economics and the budget must be central. Hard choices about the US military posture and foreign policy and domestic priorities must be made. As Johnson found, these decisions only get more difficult.

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