Defense Spending Will Increase $18.1 Billion in Fiscal 1986 : Pentagon Budget Grows Even as It Appears to Shrink

WASHINGTON —  The Pentagon, operating with a defense budget that is growing even as it appears to shrink, will spend $18.1 billion more in fiscal 1986 than it did in the previous year, despite the cuts imposed by the new Gramm-Rudman deficit-reduction law.

Even as budget officials in the Army, Navy, Air Force and Marines struggle to determine what the cuts will mean to the military services, and as project officials and officers at military bases nationwide anxiously await new marching orders, defense outlays are increasing by nearly 2.8% above the growth needed to make up for anticipated inflation of 4.3%, according to an analysis of the newly revised military spending plan.

What does this budget add up to even after an anticipated $5.85 billion is cut this year? “It’s definitely real growth in outlays in defense,” one congressional expert said.

‘Statistical Exercise’

Gordon Adams, director of the Defense Budget Project, a privately funded research organization that studies military spending, considers the cutback largely “a statistical exercise” that is unlikely to have a major impact on the military--a view vigorously disputed by Defense Secretary Caspar W. Weinberger and others at the Pentagon.

“My guess is they’ll go into management contingencies--spare parts and support--and in the end the programs can survive with less money,” Adams said.

But at a news conference last week, Weinberger declared that the law sponsored by Sens. Phil Gramm (R-Tex.) and Warren B. Rudman (R-N.H.) “is just without any question going to have an adverse effect on the nation’s security.”

Under the law, the largest defense cuts--$2.9 billion--will be taken from spending for operations and maintenance, the so-called “readiness” accounts that finance training and combat contingency preparations, the steaming time of ships at sea and routine Air Force patrols.

Unrelated Items

If under such general financing, “you roll in painting the officers’ club at Ft. Benning, and you find a $1-million savings there, that has nothing to do with readiness,” Adams said. “If you say, ‘We’re not going to spend as much money on fuel, by sailing fewer ships or holding fewer tank training exercises,’ you can say there is an impact on readiness.”

It is decisions on just such issues that have not filtered down to military officers who must live with the budget cuts.

At Ft. Benning, Ga., the largest infantry training post in the Army, spokesman John Gause said that no orders had been received to implement the cuts, which generally average 4.9% of each program’s allocation for the current fiscal year.

“We’re the country boys here. We do as we’re told. We’re sort of far removed from the lovely capital,” he said.

Air Force Capt. Miles Wylie, a public affairs officer searching futilely for budget officials with details that would portray the impact of a $1.7-billion reduction in Air Force spending this year, said: “Nobody’s talking right now. They’re still trying to sort it out.”

And the congressional expert, speaking on the condition that he not be identified, predicted: “They might buy fewer spare parts and train a little less--it might happen--but I don’t think you’re going to be able to see the impact of it. You might not be able to see tangible effects.”

Loss of Efficiency

But Weinberger, saying that the Pentagon had avoided “obvious reductions” in defense capabilities, contended last week: “We now have to slow down and acquire less efficiently, less effectively, take longer about it, be less ready now and less ready in the future, and all of this can have a very adverse effect on our foreign policy objectives and on the basic security of the country.”

The cuts announced by the Pentagon will shave a uniform 4.9% from such major weapons programs as the MX missile and the B-1B bomber, as well as from thousands of other less visible items in the Pentagon budget. Officials say, however, that they have yet to determine just what the spending reductions will mean to each project in terms of numbers of bombers, missiles and bullets.

After Gramm-Rudman is triggered, the Pentagon is allowed to slow its weapons purchases, but it may not cancel programs.

“There’s nothing that implies that any of the major ones are flying so close to the margin that they can’t afford it,” Adams said.

But, one Senate staff member said, military managers directing a weapons procurement program efficiently will pay the same price as those operating with fat in their budgets, suffering the same 4.9% cut even if they can least afford it.

“It’s not an incentive for the Department of Defense to operate efficiently,” he said.

Cutbacks for Retirees

Of the $5.85 billion being shaved from defense spending, $500 million will be trimmed by not granting cost-of-living increases to retirees. The remaining $5.35 billion will bring projected outlays down from an anticipated $274.9 billion to $269.6 billion--still an increase of $18.1 billion from 1985 outlays of $251.5 billion.

An anticipated inflation rate of 4.3% would require an increase of $10.8 billion to allow defense spending to keep pace with expected cost increases. The remaining $7.3 billion increase yields a growth in outlays of about 2.8%.

By another measure, however, the defense budget will begin shrinking this year. Under a two-tier budget process, Congress, through a budget authorization act, grants the Pentagon permission to sign contracts and plan its myriad programs and purchases. Spending authority granted in an individual year may entail an outlay of funds that does not take place until several years later, when, for example, a multi-year shipbuilding project is completed.

In the second step of the process, specific outlays are approved and money is drawn from the Treasury to pay for individual items. It is this segment of the budget that will be reduced this year by $5.85 billion.

More Cuts Foreshadowed

Budget authority, however, is dropping $13.3 billion from $292.6 billion, bringing it $6 billion below the authorization for fiscal 1985, producing the first such measurable decline in 15 years and foreshadowing greater cuts in coming years as spending for multi-year programs comes under the budget ax.

Comparing this drop with the approximately 7% increase sought by President Reagan when he submitted his fiscal 1986 budget request last February, a Senate staff member remarked: “That’s a very significant change of direction.”

Pentagon officials have said that in the next budget, which will be sent to Congress on Feb. 3, Reagan is likely to ask for budget authority of about $311 billion--an increase of nearly 3% after inflation. That budget will face more severe cuts under Gramm-Rudman if a deficit target of $144 billion is not hit, however.

The Senate source predicted that the mandated reductions could shrink defense outlays--or actual spending--by $25 billion to $30 billion in 1987.

Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, has argued that in the future, the deficit-reduction law will produce “a hollow military.” Over the next five years, he said, it “will give us weapons, but without all the people or repair funds needed to man and maintain them” because it offers no flexibility in finding the spending cuts.

Beginning next year, the flexibility that allowed the Pentagon to protect pay raises and research for the space-based missile defense program commonly known as “Star Wars” will disappear. If cuts are required to reach the $144-billion deficit target, they must be made on the basis of an equal percentage from every program.

Critical of what he views as the Administration’s failure to shape the deficit-reduction law, Aspin said: “The White House, Pentagon and Office of Management and Budget sat all through the Gramm-Rudman debate like three defense budget monkeys: hear no cuts; see no cuts; speak no cuts.”