THE GOOD NEWS from the president in the State of the Union was that after a $1.2-trillion-dollar military buildup, America is strong again. The bad news is that the Department of Defense, by its own estimates, may be $750 billion short of achieving its stated defense objectives.

We see a secretary of defense testifying before Congress that a budget of some $314 billion contains no fat and cannot be changed one iota without imperiling national security. We read reports of defense contracting rife with inefficiency, if not outright fraud, as represented by the $640 toilet seat and a $7,600 coffee maker and weapons systems that don't work. Meanwhile, Congress attacks the problem piecemeal by merely trimming programs; it deals with symptoms rather than causes and actually makes matworse.

The national security debate has become more a matter of defending budget levels than defending the nation.

As a matter of reality, the defense budget will be reduced this year. We in the Congress can cut the budget in a manner which continues the mismatch between our forces and the job we've assigned them to do; or we can decide first what kind of defense we want and then buy it. And if the Department of Defense insists in its zero-option approach, it should not complain about the outcome of our deliberations.

The defense budget, like the overall federal budget, is a numbers game only on its surface. Underneath lie the fundamental assumptions and goals which drive those numbers. What do we want armed forces for? That should be the first question in this debate, but now it is virtually unaddressed.

The second key question is, what are we getting for the vast amounts of money we have been spending on defense? Are we fulfilling the goals we've set? If not, why not? If we desire to manage the defense budget, rather than be managed by it, we had best take stock of where we've been, where we are and where we're headed.

Our principal national security objective is to maintain adequate nuclear and conventional forces to deter Soviet aggression globally. The United States currently possesses an effective nuclear deterrent, and with the modernization programs in progress, including the Trident ballistic missile submarine, B-1 bomber and cruise missiles, the effectiveness of our deterrent is assured for many years to come. MX and Star Wars defenses are not deterrent weapons; they are designed to fight a nuclear war. As such, they undermine stratgegic security and at a premium price.

While there are grounds for confidence about our nuclear deterrent, there is considerable doubt as to the capacity of our conventional forces to do their job. Our conventional forces are supposed to be able to protect our vital interests in four areas of the worl Europe, the Middle East, Southwest Asia and East Asia and the Pacific. In calculating the forces needed for these purposes, Secretary Weinberger says military planners must assume that Soviet aggression would occur in at least two of these regions simultaneously, that we must be prepared to meet it and that a long conflict would ensue between the superpowers. It is a plain truth that we lack the forces and logistical support structure to execute such plans.

What would the administration need to do to eliminate deficiencies in our conventional capabilities and build a force able to satisfy those missions? The following conditions would have to be satisfied: 1) increase the number of combat units -- divisions, air wings, carrier battle groups and aircraft and ship transport units; 2) man the force with competent, well-trained personnel; 3) equip the force with modern and reliable weapons and equipment, and 4) stockpile supplies necessary to sustain the force in wartime until industry could begin to satisfy those needs.

To what extent have President Reagan's first five defense budgets, fiscal year 1981- 85, succeeded in producing the needed improvements in conventional military strength?

* There has been a very modest increase in the size of the force, but in only one area, naval forces, with significant increases in the number of major combatant and cargo and tanker vessels. Because of the time needed to acquire ships, some of these increases are the result of decisions taken before 1980. The most dramatic increases in the force structure, which could be attributed to the efforts of this administration, are yet to come -- in 1990 and beyond. These include: building to a 600-ship Navy, including 15 carrier battle groups; four additional tactical fighter wings for the Air Force; two new light divisions for the Army; expanded airlift capabilities through the introduction of a fleet of C-5B, KC-10 and C-17 cargo/tanker and transport aircraft. Not all of these have been funded, and it remains to be seen how many of them will actually be approved.

* There has been improvement in the quality of personnel joining the armed forces and the rates at which more experienced people are reenlisting. Training activities, as measured by pilot flying-hours, ship-steaming time and simulated combat deployments and excercises, are near acceptable levels. However, the overall personnel strengh of the armed forces is low by historical standards and the Army is near its lowest level in over 30 years.

* Modernization is proceeding at an impressive pace with the introduction of new aircraft, tanks, ships and the like. Though more capable than the weapons being replaced, the reliability of these new weapon systems is poor in some cases. Unreliability and complexity are generating a tremendous increase in operating and support costs.

* Very little progress is being made in the area of sustainability -- the capacity of our logistical system to support high intensity wartime operations for the period of time specified in defense plans. Our logistical system must contain sufficient reserves -- and the capacity to move them to places where they might be needed -- to support our forces in an armed conflict until new industrial production can be made available. But this capability is essentially nonexistent, because it has not been funded. It is not funded because modernization is taking priority.

I think it fair to say that, to date, there have been some very limited increases in the size and capability of the force, but when compared to requirements and objectives and the level of investment, those improvements are insignificant.

How much would it cost to eliminate the deficiencies in our conventional forces and close the gap between our strategy and our capabilities?

Several years ago, the Department of Defense attempted to estimate the cost of acquiring such a force and arrived at a figure of $750 billion more than the $1 trillion already in the five year defense plan. Although the true extent of the gap between strategy and capabilities is not known, it is fair to conclude that it exists, that it is large, and that Reagan defense budgets have made little or no progress in closing it. This gap is like an exposed nerve, because its very existence belies the administration's assertions that its defense program is sound. On the contrary, by this administration's own definitions, it shows that the $1.2 trillion appropriated for that program so far has failed to solve the problem, and raises the possibility that funding levels may not be the issue.

If funding levels are not the real issue, what is the problem? It is the way major programs are handled by the Pentagon bureaucracy. In simple terms, it is a matter of having too many programs as compared to available funding, a failure to make honest estimates on the cost of those programs, and a failure to make cost and schedule allowances for unforeseen technical difficulties that almost always arise, followed by a failure of those in senior positions to accept recommendations that marginal and unsuccessful programs be terminated. And despite mounting pressure for funding, there is a disposition to create still more new programs. As unbelievable as it may seem, this means that most programs are grossly underfunded.

The problem is well understood by those in the Defense Department and Congress who have a responsibility for analyzing and evaluating programs. It has been systematically documented in numerous official studies, including a 1984 General Accounting Office (GAO) report entitled "Underestimating of Funding Requirements in Five Year Procurement Plans." That report concluded that the cost of the fiscal year 1984-88 five years plan was understimated by up to $325 billion, or about 20 percent. The GAO believes that this problem is caused primarily by underestimating the cost of the procurement portion of the five year plan -- that is, by making overly optimistic cost assumptions for weapon systems.

When estimating future funding requirements for a program, it is assumed that unit costs will decrease over time. The fact is they almost never do, and herein lies the crux of the problem. It makes the fraud surrounding the famous hammer and toilet seat look like a dime store operation. Spare parts are only one small element of a weapons system. If we are serious about controlling those costs, we must begin by controlling our appetite for more and more expensive new programs. From a dollar perspective, here is the problem crying out for some kind of resolution.

Congress examines the defense budget in great detail every year. This effort results in a large number of relatively small program reductions -- actions which in our best judgment deny unneeded monies. But this is like performing cosmetic surgery when a radical operation is needed. We fail to deal with the root cause of the problem -- too many programs and not enough planning -- so in the end we contribute to it. That we do so out of frustration is no excuse.

Secretary of Defense Weinberger has developed a reputation for defending his budget with dogged determination and a certain measure of success. But for me he has shown a lack of precision in failing to support a searching review of the programs that make up his budget.

Recently, for example, Weinberger has become personally involved with some programs like the DIVAD gun and AMRAAM air-to-air missile, but only after both had passed over the precipice of disaster. Some feel that his actions in both instances condoned nonperformance by the contractors. Secretary Weinberger claims that he has taken decisive action on both programs.

Well, consider this. Even though the future of both programs will remain very much in doubt for at least another 12 months, he has requested $995 million in the fiscal year 1986 budget for DIVAD and AMRAAM. In my view no additional funds should be provided in fiscal year 1986 for either program until all performance, production and cost issues are resolved. Appropriations provided last year are quite adequate for that task.

Another example: Why would the secretary allow the Army to resurrect and oversee the expenditure of $70 million on the Heavy Lift Helicopter program -- a program specifically terminated by Congress 10 years ago? This is outdated technology, and it makes no sense to revive it now.

These examples point up a failure of the system to purge the budget of unneeded money requests. The leadership in the Pentagon is so obsessed with higher funding levels that all reason has been abandoned in pursuit of them. The situation is so bad that analysts in the Pentagon jokingly say that "data-fre e analysis" now forms the basis for many "analysis-free decisions" at the secretarial level.

Secretary Weinberger has had ample time, the support of the president and vast resources at his disposal. So why has he failed to create a more credible budget? Perhaps he is not disposed to the type of controversy that would surely follow. Any serious and successful effort at reform would inevitably lead to the outright termination of some weapon systems. Program terminations would involve fierce, protracted confrontations with all elements of the power structure -- the admirals and generals, members of Congress and industry -- mainly because they would threaten to disrupt the flow of money. By pursuing such a course, Secretary Weinberger would make himself a disliked man, but he might also go down in history as a great secretary of defense.

While fundamental reform based on honest, clear-eye d assessments of the utility of expensive weapon systems would be politically painful, it is the right course. What has been lacking is the will on the part of all of us to make the hard choices. Believe me, when my cut list (see accompanying box) hits Connecticut, a few corporate and individual constituents will want to go after this senator's family jewels.

Fundamental reform would involve two basic steps. First, the Defense Department would have to develop a strategy that is affordable. This would not mean abandoning our commitments abroad, but it would mean abandoning certain planning assumptions and out-of-date strategic ambitions, like fighting several conventional conflicts simultaneously, and giving greater weight to the contributions of our allies. Second, once the issues surrounding strategy were resolved, the force structure and programs would be tailored to match the revised objectives. And this would be the difficult part. Programs that failed to meet the new criteria would be terminated. Savings derived from program termination could then be applied to those programs deemed essential. I have prepared a list of programs that could either be reduced or terminated. It is by no means exhaustive and should be treated as preliminary and tentative. As our hearings progress over the next few months and new information surfaces, many more specific cuts will be uncovered. These cuts will not affect force structure or readiness but will instead deny unneeded funds and slow the pace of modernization. For example, this could mean the military would have a new weapon system or item of equipment in 1991 instead of 1990 -- hardly a radical change in our overall military strength or our ability to carry out national security objectives.

I have not proposed any base closings on this list, but that is clearly an area that in time could yield meaningful savings. But the biggest savings will come from terminating major weapons programs. As a rule, one dollar of investment in military hardware usually leads to two or three dollars in operation and support costs over the life of a system. So, for example, my proposal to terminate the LHX/JVX advanced rotor aircraft programs could save several hundred billion dollars over the next 20 years.

I think we could hold defense appropriations for fiscal year 1986 to the level provided for fiscal year 1985, after allowing for some inflation, or a total of $293.9 billion -- a reduction of $19.8 billion from the administration's budget. That is enough to meet our national defense needs and would hopefully provide Secretary Weinberger with the incentive he needs to consider fundamental reform.

National security is not just a defense budget. It is the sum total of many factors, including economics, science, education, energy and the courage of political leadership. Undisciplined but enormous increases in defense appropriations will yield only marginal improvements in military strength while sapping the economic health of our country.