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Lawmakers Eye `Peace Dividend'

But some say any defense savings have been spoken for - they would be used to cut deficit. CASHING IN

AS East-West tension eases and Eastern Europe reforms, Congress is beginning to think how to use money from expected reductions in the defense budget. Around Washington this presumed saving is being called a ``peace dividend.'' Only one firm proposal has been aired on Capitol Hill by a small group of mostly liberal House members led by Reps. Barney Frank (D) of Massachusetts and George Miller (D) of California.

The proposal would trim $18 billion next year from the $305 billion defense budget, and nearly $90 billion over three years. Of those savings, it would spend $15 billion next year, and $50 billion over three years for domestic programs including: education, housing, transportation, drug treatment, Medicare, Medicaid, health, and nutrition. The rest of the savings would reduce the deficit.

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While this is the only solid proposal, many other members are saying the same thing as Rep. Marge Roukema (R) of New Jersey. ``I certainly have been thinking about it,'' she says.

Representative Roukema and many others think Congress should be fiscally prudent: Congress should first find out how much money will be saved and then figure out what to do with it. Reducing the deficit should probably be the first priority, they say.

Congress was less prudent when the last peace dividend fell into its lap, more than 15 years ago when US participation in the Vietnam War wound down. Then the money seemed to disappear due to additions to social programs and inflation.

This time many in the current Congress are determined to keep better track of whatever peace dividend exists, in part because now they have a whopping budget deficit to handle.

Most members dismiss as unrealistically high Defense Secretary Richard Cheney's figure of an $180 billion savings over the next five years. They say the figure is a reduction from future higher Pentagon spending, rather than a decrease in actual current spending.

The next hint of how much savings may be possible comes Jan. 22 when President Bush unveils his proposed budget for the federal government, including the military, for the next fiscal year.

``That will be the first indicator of what may be available'' as a peace dividend, says Keith Laughlin, executive director of the Northeast-Midwest Congressional Coalition.

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What the president says on that date ``will show what the administration is also forecasting in defense savings'' in future years, he adds.

At a House Democratic caucus in February, Representative Frank hopes to begin the uphill process of persuading the House Budget Committee to back his plan to revise budget priorities. Miller has called the program ``a budget for a strong America, a reordering of our priorities to recognize realities and changes that have taken place in the world over the last several years.''

Most of the 535 members of the Senate and House of Representatives are skeptical when they think about the billions of dollars Representatives Frank and Miller propose shifting from military to social programs. They don't believe anywhere near that much money can be saved from current defense spending.

Many tend to agree with President Bush's assessment, made in Brussels after the summit: ``There just isn't a lot of, quote excess money, unquote, floating around here.'' At another point the president called it ``premature to speak ... about a `peace dividend.'''

``I would urge caution against looking at this as a financial windfall for the government,'' says Rep. Claudine Schneider (R) of Rhode Island in a typical comment. ``Any so-called peace dividend will come over a period of five years, and the prudent thing to do would be to apply it toward reduction of the budget deficit.''

The Democratic leaders of both the House and Senate take measured approaches.

House Speaker Thomas Foley (D) of Washington says Congress should think first about defense. He says the United States should assess its future military needs in view of the lessening tensions. Only then will the US be in a position to know the prudent size of future defense expenses starting with the coming year, and the amount of savings possible in military spending, he says. The Speaker's first priority for any savings is to reduce the deficit.

Senate majority leader George Mitchell (D) of Maine warns Americans not to count their peace-dividend chickens before they hatch. He suspects that the final savings will be much less than is being discussed now. Like Speaker Foley, he says one of his top priorities for any savings is to reduce the deficit.

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