Pentagon executives were warned yesterday that President Reagan's plan to rearm America, as interpreted by the Joint Chiefs of Staff, could cost up to $750 billion more than the administration has earmarked over the next five years.
The warning, which came in a secret session of the Defense Resources Board, is the most dramatic evidence yet that Reagan's Pentagon team fears that defense spending threatens to run out of control in the future, soaring above even the $1.5 trillion projected for fiscal 1984 through 1988.
The "gap" between what it would cost to finance the Reagan plan as translated by the Joint Chiefs and the $1.5 trillion in fiscal 1983 dollars that the administration has projected as the cost "could be as large as $750 billion," according to estimates made in a report presented at yesterday's meeting by Richard D. DeLauer, head of weapons research and procurement.
Such a gap would require the president eventually to do one of two things: allocate much more money to defense or retreat from some of his targets.
Sources said Navy Secretary John F. Lehman Jr. took quick and heated exception to the assertion that there simply will not be enough money available to build the kind of fleet needed to take on the Russians all over the world under the maritime superiority strategy called for in secret guidance to the services.
The Pentagon has for years almost routinely underestimated weapons costs; yesterday's document was an unusually frank admission of this failure. The report used during yesterday's briefing by DeLauer and Lawrence J. Korb, the assistant defense secretary for manpower, said forthrightly that defense leaders must do a better job of estimating costs or start canceling some programs.
A Pentagon executive who was at the Resources Board meeting confirmed that the whole purpose of the session was to bring about greater realism in projecting how much the Pentagon can afford to buy between now and the end of the decade.
The unusual session came as the White House was trying to wrap up the fiscal 1983 budget, which calls for actual spending to jump to $215.8 billion from $182 billion this year. Still in dispute is a broader figure having to do not with actual spending but obligational authority, the right to spend money next year and out into the future. The Office of Management and Budget is insisting over Navy objections that the full cost of two nuclear aircraft carriers, not just the down payments, be included in the obligational account, adding over $6 billion to it.
Traditionally the full costs of weapons systems have been included in this account in the first year even though they are produced over several years; the Navy tried to fudge on that rule this year. The obligational account is expected to rise from $213 billion to between $245 billion and $255 billion from fiscal 1982 to 1983, depending in part on these bookkeeping questions.
The Defense Department plans its budgets in five-year sections. The Joint Chiefs of Staff, to help planners, annually produces a Joint Strategic Planning Document saying what forces are needed to carry out defense policy. The cost of the forces listed by the chiefs was the issue in the report used by DeLauer and Korb yesterday.
Entitled "Planning Defense Resources to Match Strategy," the report said:
The gap between what the chiefs believe they need to carry out Reagan's defense strategy and the $1.5 trillion in fiscal 1983 dollars expected to be available from fiscal 1984 through 1988 "could be as large as $750 billion" for that five-year period.
The "best guess" is that the gap "will be about $300 billion."
The $1.5 trillion projected for fiscal 1984 through 1988 "will not meet" what is needed to carry out Reagan's defense program as set forth in the secret guidance sent to the military services over the name of Defense Secretary Caspar W. Weinberger.
The services would come up about $75 billion short of what they need in that five-year period under the guidance for new ships, tanks and missiles. They would also be about $15 billion shy of money needed to keep weaponry on hand ready for war.
The report resorted to "Pentagonese" in calling for a better matchup between declared military policy and dollars available, stating:
"We must adjust policy, strategy, forces or resource allocation priorities to give us a balanced and stable program--with a clearly recognized level of military risk--that could respond to unanticipated changes in resource supply or demand."
With one B1 bomber estimated to cost between $200 million and $400 million, the Nimitz aircraft carrier $3 billion and the Army's new XM1 tank $2.7 million a copy, a growing number of Pentagon professionals are calling for an agonizing reappraisal of how to get more bank for the buck. The Defense Resources Board is expected to hold several more sessions on this question in the coming months.
The Pentagon's own reappraisal is expected to intensify congressional scrutiny of the cost of Reagan's rearmament program. Sen. Sam Nunn (D-Ga.) of the Senate Armed Services Committee has said that there is no way the nation can afford to buy the 600-ship Navy, given the high price of the warships and the limited dollars available even under the currently record high peacetime defense budgets.