President Reagan announced yesterday that he is making an $8 billion cut in his defense budget to help hold down the burgeoning budget deficit. But military spending still would increase by 14 percent in fiscal 1984 from the level approved by Congress for fiscal 1983.
Defense Secretary Caspar W. Weinberger said about half the cut reflects the decline in inflation and lower fuel prices. The rest would come from forgoing the 7.6 percent military pay raise scheduled for October, postponing some military construction projects and curbing training exercises.
No major weapons systems would be affected, Weinberger emphasized.
The administration also was said last night to have decided to ask Congress for no pay raise for either military or civilian employes this year. Both received 4 percent raises last year, and the Pentagon originally had planned to ask for 7.6 percent raises for uniformed military personnel.
Weinberger said he would not have agreed even to the $8 billion in defense cuts for fiscal 1984 if it had not been for the deficit problem. Any further cuts in Congress by those who want to reduce defense and domestic spending equally would be unwise "in view of the threat we still face," he added.
Reagan, too, said further cuts would be dangerous, but defended $8 billion as a reasonable compromise that would not seriously detract from his military buildup. "We are not reversing course," he said.
In Congress, however, the revisions seemed to satisfy neither side in the guns-versus-butter dispute.
Chairman John G. Tower (R-Tex.) of the Senate Armed Services Committee called the new cuts "a squalid political approach to the issue" that went against the president's "basic instincts." But Sen. Carl Levin (D-Mich.), also a member of the Armed Services Committee, complained the cuts do not go far enough because "big-ticket items" such as costly new weapons systems are exempt.
The defense cuts were the second important policy shift to come out of a budget reassessment begun by Reagan last week, after White House advisers and leading Republicans in Congress told him that projected budget deficits over the next few years otherwise would be intolerably large.
On Monday, Reagan authorized aides to draft contingent tax increases for fiscal 1986 and thereafter that would take effect if deficits do not come down. As one alternative, Treasury Department officials last night were reported to be considering 10 percent individual and corporate income tax surcharges. Details, Page F1
The administration also is at work on possible Social Security tax increases and benefit cuts, in addition to other domestic spending cuts Reagan already has approved.
Weinberger, who resisted Pentagon budget cuts the last two years but could not hold out against the pressure from inside the administration and Congress this year, was able to produce both budget cuts and a sizable spending increase for fiscal 1984 by taking a high starting point for his calculations. He used the defense budget figure for next year that Reagan had set as a goal in his original five-year military buildup plan.
Under that arithmetic, budget authority for fiscal 1984 would fall from the originally projected $284.7 billion to $273.4 billion. Actual spending similarly would decline from the originally projected $247 billion to $239 billion.
But calculations using the defense budget actually approved by Congress last year for fiscal 1983 portrays quite a different picture. The Pentagon's budget authority would increase from $238.5 billion in fiscal 1983 to $273.4 billion in fiscal 1984, an increase of almost $35 billion, or 14.6 percent. Actual spending would jump from the congressionally approved figure of $208.8 billion for fiscal 1983 to $239 billion for fiscal 1984, or 14.4 percent.
A congressional staff member who worked on the budget resolutions last year estimated that the reductions announced by Weinberger would put the Pentagon almost exactly where Congress said it should be in fiscal 1984 in both budget authority and spending.
Weinberger said that slightly less than half the reductions would come from lower fuel prices and a lower-than-anticipated rate of inflation between fiscal 1983 and 1984. The Pentagon had projected a combined inflation rate of 5.9 percent for the coming fiscal year. Weinberger would not disclose the new estimate.
Even with 5.9 percent inflation, the "real" growth in military still would be 8 percent above inflation after the cuts announced yesterday. Reagan has sought to have defense spending increase by an average of 7 percent above inflation each year.
Yesterday marked the first time that Weinberger has publicly recommended cuts in the military budget since becoming defense secretary two years ago. He did so only after White House budget officials and leading Republicans in Congress insisted that the Pentagon share in government-wide cuts to reduce budget deficits.
Asked if he thought he had gone far enough to satisfy Congress, Weinberger replied: "I have no idea what reaction to it will be, but I would certainly hope that everybody on both sides of the aisle would agree that this is the amount that is necessary to continue the very necessary program to regain our strength in the face of a threat which is still growing."
Tower, who last year tried to fight off cuts in the defense budget, called the cuts announced yesterday "a squalid political approach to the issue and a lack of vision. We belong to a society that can produce both guns and butter."
Levin said that the battle of the Pentagon budget had just begun, declaring that the president "has been dragged kicking and screaming" into making reductions and "there is a growing move to cut much deeper."
Scrapping the 7.6 percent military pay raise originally projected next October for the 2 million men and women in uniform is likely to create a storm of controversy among military leaders and members of some congressional committees.
Pentagon manpower executives had warned White House budget cutters that anything less than a 5 percent raise would impair the all-volunteer military by discouraging bright people from joining and encouraging skilled technicians in the military to seek higher-paying civilian jobs.
Weinberger would not confirm that the pay raise was a casualty of the budget rewrite, but did say "there will be savings in the cost of personnel . . . . We all have to make sacrifices."
Asked if he would have recommended reducing military pay increases, postponing housing construction at military bases and limiting training exercises if it were not for the looming federal deficits, Weinberger replied:
"Well, it's the deficit and it's the necessity of making sure that everyone does perceive what has long been the fact, that defense is reexamining all of the ways in which we can try to do with something less without impairing too much the momentum of the necessary recovery of military strength."