IN THE DREAM, the new party secretary, Yuri V. Andropov, sends the following letter to President Reagan: Dear Mr. President:

I appreciate the reasons why you could not attend Leonid Ilyich's funeral. Your representatives did make clear, in your unavoidable absence, that you would continue to work for positive relations between our two countries. That much was perfectly acceptable.

However, your new secretary of state, Mr. Shultz, went on to tell representatives of the Moscow press that you expected "constructive behavior" from us. The presumption was that we have behaved otherwise in the recent past. This is an unacceptable slur, particularly as it was uttered during our days of bereavement following the death of a tireless fighter for world peace. It suggests a judgmental attitude on your part, a rapping of our knuckles. Please be advised, as I told our people upon my accession to the leadership of the Soviet Communist Party, that our military might will prevent imperialists from dictating any course of action to the Soviet Union.

With highest esteem, etc.

Y. Andropov cc: Members Central Committee

Minister of Defense

Dear Mr. Secretary:

I am glad that you share my hope for more positive relations between the United States and the Soviet Union. This can be achieved, as Chancellor Kohl and I have jointly declared, only if Soviet conduct makes it possible. It is not our desire to "dictate" to the Soviet Union. We do, however, intend to continue strengthening our defense capability, to the end that the Soviet Union will understand once and for all that it cannot threaten the security of free nations without the gravest consequences to itself. The ball, Mr. Secretary, is in your court.

Please accept my best wishes upon your elevation to the leadership of one of the world's most important nations.

R. Reagan cc: Secretary of Defense

Chairman, Joint Chiefs of Staff

Sen. John Tower, Chairman,

Senate Armed Services Committee

Chairman, Committee on the Present Danger Dear Mr. President:

Your message is received. I wonder if you would wish to join me in a little private communication? On what I believe you call the "back channel." No secretaries, no ministers, no senators, no generals, no "Present Danger." Just the two of us. Let me know.

Andropov

No copies

p.s. I suggest that we use code names. What about "Top Act" for you, "Top Cop" for me? From our earlier lives. Like "Former Naval Person," as FDR addressed Churchill? Dear Top Cop:

Sure. Go ahead.

Top Act bcc: William Clark, NSC Dear Top Act:

You understand, of course, that what has occurred here is unusual in recent Soviet history. I have assumed power without the benefit of assassinations, embarrassing disclosures, or other indications of disorder. I must at the same time move carefully, in order not to provoke internal countermeasures. Hence the "back channel."

I have a proposal. You and I represent very different forms of government, each appropriate to the peoples we lead. But we face two great problems. One is preventing the outbreak of fighting that might escalate into nuclear war, which neither of us could possibly survive -- no matter what your Pentagon intellectuals and my general staff may think or say.

The other is related. Both of us are fast on our way to spending ourselves into an economic chasm, in order to achieve what the generals call "military security." By which they mean the ability to push the other side around without the danger of retaliation.

You and I know that we cannot push each other around in the crucial areas of the world without inviting such retaliation. We can each secure the fringes, and we can take advantage of certain opportunities elsewhere; we can accept the useful interventions of our friends the Cubans and the Israelis. But we cannot threaten the crucial interests of the other without fear of disaster.

Yet the military race goes on. In the Soviet Union, military expenditures have beggared the needs of most citizens. Here we Russians are able to throw the most sophisticated armaments into any city of the West, and we cannot keep food on the shelves of stores or arrange to have a gearbox repaired. There you Americans are, cutting taxes so that your middle class may have more to spend on consumer goods, and your cities are crumbling, your unemployed are multiplying, your bankruptcies are growing.

Military spending is not the only reason why this is so. Our Soviet system is inefficient. We are in some respects an underdeveloped country, and our bureaucracy seems determined to keep us so. Your economy, too, powerful as it has been, is deep in recession. Still you prefer to "stay the course," for reasons I do not entirely comprehend.

But if military spending is not the sole villain, it is a great drain for us both. More important, we can do something about it, if we want to.

Until now we have been unable to control these expenditures. Our generals say you are ahead of us in this vital area; we are mortally threatened; we must catch up. Yours say the same about some other weapon or technology.

So you pick a number for defense spending growth so high that that nobody could complain it wasn't enough -- and you say next year it will be higher still. It is like gasoline on the flames here. Our people insist on more, more, in response. There will never be enough, so long as either side keeps piling arms upon arms. Other needs are squeezed out. Our countries will ultimately become like improverished samurai.

Here is my proposal. You reduce your rate of increase next year -- not your total expenditures, just the rate of growth -- by half. In a little time, after I have made a few firm speeches to reassure my colleagues and the generals, I will respond in kind. The year after that we will do the same. I'll go first that year. You can follow, citing evidence of our restraint or whatever reason you must give to justify your action. What do you say to this?

Top Cop Dear Top Cop:

Interesting idea. There are several problems with it, so far as I am concerned. (1) I campaigned for the presidency on the issue of improving our defenses. I said Carter had allowed us to fall into a condition of perilous weakness. (2) I have since declared that we are in a position of inferiority, and must spend what it takes to get out of it. (3) The generals (and admirals -- don't forget the Navy!) over here, while they don't threaten coups, do testify before Congress. They are quite capable of suggesting that they are being asked to defend the nation with the equivalent of sticks and stones. That would provide ammunition to my political enemies, and would be quite embarrassing to me in dealing with my friends. Many of the latter are already suspicious that I have sold out too often on taxes, school prayer, pipeline sanctions and so on. What will they say when I reduce the Pentagon budget by half? Somebody is bound to suggest that I run next time with George McGovern. (4) What indeed would the Committee on the Present Danger say? I remind you that about two dozen of them have been given jobs or advisory roles in my government. I'll tell you what would happen. They would sharpshoot from the inside while Safire, and the Helms crowd in the Senate, and the unconscionable Democrats in the House would snipe away from the perimeter. (5) I contended, during the campaign, that the increased revenues we would receive from cutting taxes -- that's right, from cutting taxes and freeing America's great productive power to grow and expand -- that those revenues would pay for the defense buildup. If I cut the military budget now, somebody will say it never could have worked. Somebody like Stockman, our budget man. (6) How can I trust you to respond in kind? My predecessors got absorbed in the SALT talks, and they hardly noticed you slipping 320 SS-20s into position to hit Europe. What will you do if I enter into this kind of informal racheting-down agreement with you? Move into Iran?

Top Act Dear Top Act:

Let me respond to a few of your concerns. I shall not, for obvious reasons, attempt to counsel you on how to free yourself from campaign pledges. And I do not mean to suggest that you would not encounter political difficulties. So would I, and as you know, when our leaders have run into insurmountable political problems they have not been retired to golf in Palm Springs, or to write memoirs, or appear on talk shows.

Still I cannot understand why you regard the ones you mention so seriously. Take the generals and admirals. Has anyone ever heard them say they were adequately provided with weapons? And how could Mr. Weinberger be a problem for his friend Mr. Reagan?

You speak of the Committee on the Present Danger. If they have all been given jobs, what is the worry? The Democrats -- I thought most of them were for slowing down the Pentagon increases, in order to pay for schools, health care, food stamps, and the rest. How can they be taken seriously if they complain?

The "Helms crowd" I do not know; they are not taken seriously over here. But I should think you could satisfy them with another, I believe you call it, "social issue." Doing something about dirty movies, for example. You will be able far better than I to come up with such an issue.

Now, you are also worried about your "supply-side" economics not being shown to produce big revenues for defense. Stockman may tell somebody it never could have worked. But Stockman, so your papers say, wants to cut the defense budget. Why should he complain if you do? And does he not work for you?

You don't really risk much if you enter into this bargain. Our borders are quiet, for the time being. I have no designs on Iran; better try to swallow a tarantula. If I do not reciprocate within six months, you are free to call it off and renew this ridiculous arms chase. You will have lost nothing but a little lead-time on weapons to be delivered years from now.

Top Cop p.s. I do not propose "reducing the Pentagon budget by half," as you say in your message. I propose reducing the rate of increase by half. With all respect, please try to keep the facts straight as we go along.

p.p.s. KGB tells me McGovern will not run in 1984. Dear Top Cop:

This would leave you in Afghanistan. It would leave you looking down Europe's throat with your SS-20s, without a Western counterforce. It would leave you still suppressing your dissidents and preventing Russian Jews form emigrating. It would leave the labor camps intact, and it would leave you exerting pressure on Jaruzelski to crush Solidarity. It would leave you still a land without liberty, where stupid state power can do nothing well except make armaments. It would not free the spirit of man from the dread of your bombs or the threat of your jails.

Top Act

Dear Top Act:

Correct. I was not proposing to rearrange the alphabet. I was suggesting that we address our joint problem of defense expenditures grown so big that they disorder our economies. Surely you listen to your big businessmen. They are going around Washington -- your papers say this -- calling for reductions in the defense budget.

Anyway, your big military forces have not managed to prevent the things you complain of in your last message. Nothing indicates that bigger forces will do so, either. See my first message for why. "Crucial interests" cannot be threatened without grave danger.

So let's not wait to mute the immutable. (Is that correct?) Let us cut the arms budget a little. People could buy a few things.

Top Cop Dear Top Cop:

You may be right. Let me think it over further. If we do agree to do it, no meetings. I'll do it my way, you do it yours.

Top Act Dear Top Act: It is a deal.

Top Cop

Harry McPherson, who was a White House aide under Lydon Johnson, is a Washington lawyer.