THE REALITY of defense spending is that it's
too late to do much about fiscal year 1982. President Reagan's decision to cut $2 billion--from $188 billion for defense spending next year--may sound like a modest concession, but even that presses the limits of possibility. The only way to reach a significantly larger reduction would be to postpone an urgently needed military pay increase. The rest of the defense budget is driven by the procurement contracts, with their long lead times.
As a practical matter, the struggles in Congress this fall over defense will begin to affect actual spending and budget deficits only in 1983 and beyond. The most interesting reaction to the defense numbers is coming from the Senate Republicans as they calculate the size of the implied cuts in everything else. In July, Sen. Hatfield, the chairman of the Appropriations Committee, argued that the administration's famous reconciliation bill, now enacted, was tightening the screws too much. Last weekend, Sen. Dominici, the chairman of the Budget Committee, gave notice to the White House that even its revised figures for defense spending are too high. None of the 1982 appropriations bills has yet been passed, and the administration can see the pressure rising to use some of them as vehicles to restore funds that the reconciliation bill cut two months ago. There has been speculation that the Appropriations Committee, to protect vulnerable domestic programs, might hold the defense appropriations bill until all the others have been passed-- and signed by the president.
That's why the White House is now considering a daring and risky strategy to circumvent the appropriations process altogether this year. In the past, when Congress fell behind schedule or couldn't agree on an annual appropriation, it routinely resorted to what it calls a continuing resolution--a makeshift that allows an agency to stay in business with little change in funding. But now the administration is considering one grand continuing resolution, with sharply lowered spending ceilings, to cover the whole government for a full year. The administration fears that its budget program is going to be badly eroded if Congress votes on each appropriation separately in the conventional manner. Mr. Reagan has won, so far this year, by forcing dramatic up-or-down votes on his program as a whole.
The stakes here can be illustrated by one small arithmetic exercise. In the aftermath of the tax cut, there will be enough money in 1984 to pay for the president's current defense plans. There will be enough for Social Security, the other pensions and similar benefits to which people are entitled by present law. There will probably also be enough for medical care for the elderly and veterans. But there won't be a dime for anything beyond that short list. To balance the budget in 1984, under those circumstances, would mean literally closing down the rest of the government. It would mean reducing highway aid and food stamps to zero, along with medical research, dam construction, housing aid, school aid, the space shuttle --the works. That's why even the starchiest of Senate Republicans know that they are going to have to go to work on those defense numbers--unless, of course, there's a whopping tax increase before 1984.