Battling for the military budget. Belt-tightening hits the Pentagon

The new AH-64 Apache is the Army's premier attack helicopter. It looks like a giant insect carrying a machine gun and missiles, and would hop from meadow to meadow, providing troops with firepower support. The Army has ambitious plans for attack copters, a relatively new type of weapon. Pilots call them more deadly than tanks and say they will eventually dogfight in the air like jet planes.

But in a surprise move, the Pentagon recently announced that the Army will buy 82 fewer Apaches than it wants. Purchases will end after 1988. The reason? ``Funding limitations,'' says Defense Secretary Caspar Weinberger in his annual report to Congress.

The Defense Department is not known for its reluctance to spend money. When it unilaterally forgoes favored weapons, a trend is at hand.

After two years in which their budgets have shrunk in real terms, Pentagon planners are beginning to come to terms with the inevitable. Huge budget deficits and highly publicized stories of Pentagon waste have eroded congressional and public support for the Reagan administration's military plans. The defense budget has been cut in real terms in each of the last two years, and the outlook this year is for zero real growth or a slight increase at best.

This recognition of political reality is shown in President Reagan's proposed 1988 budget, which asks for only a 3 percent rise in the military budget after inflation, to $312 billion. Last year the administration tried for a 7 percent real increase, alienating many members of Congress who felt the request was wildly unrealistic.

Thus the military budget debate has changed focus. No longer will it be primarily an argument between the administration and Capitol Hill about how big the total budget should be.

Instead, many analysts say the debate will focus on what function should get what portion of the budget pie. Are Army tanks more important than Navy ships? Should funds for nuclear weapons increase at the expense of conventional forces? What needs more money - ammunition and other readiness categories or new weapon purchases?

Key legislators are attempting to prepare Congress to make the choices. Both the House and Senate Armed Services Committees plan to hold their first hearings this year, not on the budget, but on the foundation of US military strategy. Committee members will hear testimony on such topics as the purpose of United States forces in Europe.

``We're focusing on strategy, because it's the logical starting point for formulating policy and budgets,'' said the Armed Services Committee chairman, Sen. Sam Nunn (D) of Georgia, at his kickoff hearing last month.

In the Defense Department, budget planners will likely turn more of their energy to intramural conflict than they have in the past, as the Army, Navy, and Air Force each fight to increase their share of a budget that isn't growing. The bitterest struggles may be within services - Army helicopter pilots vs. tank commanders, etc.

``There are going to be real turf battles in the Pentagon,'' says Gordon Adams, director of the Defense Budget Project, a private watchdog group.

Some factions have already been caught in the defense budget squeeze.

Consider fighter pilots. They are the losers in the proposed 1988 Air Force budget. While funds for such things as nuclear-missile purchases would increase under the administration plan, the equivalent of five fighter squadrons would be disbanded to save money. The Nevada-based 474th Tactical Fighter Wing would be broken up, for instance, and its three squadrons of 66 F-16s transferred to the reserves.

Officially the Air Force has long planned to increase today's 37 fighter wings by three. But that jump now seems a distant dream.

``We are not going to get to the 40-wing goal for the next three or four years,'' concedes Gen. Larry Welch, the Air Force chief of staff.

In the Department of Defense budget as a whole, the least-favored major military function is purchase of new weapons. The administration is proposing that procurement funds go down 1.4 percent next year, to $84 billion.

The military personnel category - mainly troop pay - would go up 6.2 percent, to $78 billion. Operation and maintenance accounts would increase 10 percent, but the most-favored military budget category would be research and development, which would rise 22 percent.

Each military service - Army, Navy-Marine Corps, and Air Force - would get about the same share of the Pentagon budget as it does now. Some congressional critics say the Army is being unfairly penalized under the administration plan. The service would get fewer helicopters and tanks than it wants, while the Navy would get more aircraft carriers than the Pentagon had previously said were needed.

But from the point of view of the Army and the other services, the problem may not be 1988. The real crunch could come in 1990 and beyond, when several expensive weapons now under development are ready to enter service.

Two new jets - an Air Force fighter and a Navy attack plane - will be edging toward production around the turn of the decade, as will the Army's LHX light helicopter and the Osprey tilt-rotor aircraft. The Air Force will be readying both the Midgetman intercontinental ballistic missile and the new SRAM II air-to-surface nuclear missile. The Navy is planning on requesting $1.4 billion in 1989 for the first of its new SSN-21 attack subs, and more than $1 billion in 1990 for the balance on a new aircraft carrier. Then there's President Reagan's Strategic Defense Initiative (or ``star wars''), a program whose fate is undecided but which is potentially the most expensive of them all.

Why are all these new weapons crowded together? Critics say that in the flush years of the early '80s, the Reagan administration put downpayments on many systems. The balance of the bills are now due. Pentagon officials reply that it is a natural cycle, the second wave of post-Vietnam-war weapons.

Under the Pentagon's script, funding the new weapons wouldn't be a problem. The long-range forecast for the defense budget calls for 3 percent real increases each year through at least 1992 - a funding level the administration believes would pay for completion of current modernization plans.

``I don't think there's anything special about the '90s,'' said Mr. Weinberger in a recent meeting with a small group of reporters. ``There is no way you can avoid the fact that there will have to be substantial expenditures for the defense of the United States as far out in the future as you can see.''

But a year or two of zero real growth might well throw those plans into chaos. Undersecretary of the Army James Ambrose has been warning his service that just such a scenario may come to pass. In a speech to contractors earlier this year, he said that to finish its modernization program, the Army needs $100 billion more than Congress is likely to provide. Covering such a shortfall, he said, would entail such things as buying less ammunition than planned, slowing purchase of weapon systems in production, and delaying expensive new projects such as LHX.

One former Reagan official says that even the Pentagon's script isn't rosy enough. Lawrence Korb, an assistant defense secretary from 1981 to 1985, says at least 6 percent real growth a year - twice the level the Pentagon seeks - is needed to pay for the newly started procurement programs and adequately maintain current forces.

Though the administration claims new aircraft are needed to deal with improvements in the Soviet Air Force, Mr. Korb feels improvements of current fighters such as the F-16 might do the same job. ``I don't know why you have to go ahead with a whole new generation of aircraft right now,'' says Korb, a dean at the University of Pittsburgh.

Of course, the military budget pays for much more than new weapons purchases. If there is a defense money crunch coming, savings could be found in other areas - fuel for training, troop housing, spare parts, etc.

For the most part, that is how the cuts of the last two years have been absorbed. Congress slashed a little from Column A, a little from Column B, and pretty soon it added up to real money.

In fact, there is even a powerful disincentive for lawmakers to cut the Pentagon budget by trimming major weapons. Eliminating a big purchase such as a cruiser would cause the Navy to howl, and in the short run it would not reduce the deficit very much.

The reason for this is complex government accounting. Congress approves big-ticket Pentagon items by setting aside the entire amount of money needed to pay for them in a single year's budget. The 1988 budget, for instance, requests $1.9 billion to pay for two Aegis cruisers. But the Navy in essence saves most of this money. It pays for the cruiser piece by piece, over the period of years it takes to build it.

The figure for the total federal deficit, though, is arrived at by matching tax income against the checks written by the government. This spending is known as government outlays. So if a cruiser was bounced from the budget, the deficit would be reduced only by the payments the Navy planned to make in 1988, not by the whole price of a ship that is being bought on time.

So for the past several years, lawmakers have concentrated on areas in which they get a quicker deficit-reduction return for their political effort.

``Everybody's remarking on how much has been trimmed out of the budget without making any hard choices,'' says Steve Daggett, an analyst with the Committee for National Security, a policy watchdog group that generally supports increased defense spending.

Mr. Daggett claims that by concentrating cuts on easier targets, such as spare parts, Congress risks having hollow forces, with all its planned weapons but without enough fuel, ammunition, etc., to use them.

And in the long run, he says, elimination of a major weapon system would pay deficit reduction dividends that easier targets do not. And it would mean savings on a wide range of subsidiary equipment and support expenses.

Weinberger and other Pentagon officials have repeatedly claimed that they do not ask for these weapons on a whim but as a necessary response to ``the threat'' - the Soviet armed forces.

When appearing before Congress, Weinberger routinely declines to say where cuts in his budget might be found, on grounds that it is his business to say what is needed, not what is affordable. He has used even stronger language in the annual reports he sends to Congress with his budget proposals, hinting that any cut in the defense budget is tantamount to giving in to forces of darkness.

``Budget deficits and domestic program cuts can be rectified; but security shortfalls carry the risk of irreversible losses,'' he writes in this year's report.

Despite Weinberger's rhetoric, there appears little chance that the President's proposed defense budget for 1988 will be passed unchanged. Key members in both the House and Senate have said it is politically unrealistic to expect the Pentagon to get 3 percent real growth this year, and probably for several years to come.