President Reagan's top budget advisers have reached "total paralysis" in their effort to halve the deficit by 1988 in the face of Defense Secretary Caspar W. Weinberger's opposition to any significant slowdown in Reagan's military buildup, officials said yesterday.
The attempt to slash the budget deficit to $100 billion in three years "is farther gone than people will admit," one senior official said. "Weinberger has taken everyone to the cleaners. We've come full circle to having no plan" for dealing with the deficit, the official added.
Virtually all of Reagan's budget "core group," including other Cabinet members, have urged Weinberger to accept a major defense-spending slowdown, saying it would make Reagan's domestic budget cuts more salable to Congress. These officials say it will be almost impossible to find additional domestic cuts to reach Reagan's goal of cutting the deficit in half, and the goal may have to be abandoned.
Reagan has not announced a decision on defense spending. But officials said he appeared to agree with Weinberger that he should reject a proposal by Office of Management and Budget Director David A. Stockman and the core group for major defense trims.
Stockman has proposed reductions in Pentagon spending of $8 billion next year, $20 billion in 1987 and $30 billion in 1988. He would effectively freeze weapons purchases as well as military pay.
Officials said Weinberger offered at a White House meeting this week to trim defense spending by $6 billion next year, $7 billion in 1987 and $6 billion in 1988. They said Weinberger's proposal would not touch military hardware and procurement.
But Weinberger did include an asterisk on the later years of his budget proposal with a footnote suggesting that the totals could be reduced if Reagan wins an arms reduction agreement from the Soviets.
On the separate track of spending "authority" -- which runs ahead of actual spending -- Stockman's plan would have trimmed $121 billion from Pentagon spending increases over three years.
Weinberger offered to trim $19 billion over three years, officials said, and some of that was double-counting savings that Reagan earlier approved in a 5 percent civilian pay cut. The 5 percent cut includes civilians working in the Pentagon, but the savings were previously counted among the president's domestic spending cuts.
Weinberger yesterday denied reports that he asked Reagan to freeze military pay for 1986, saying he would not "in any way break the faith that we have with respect to adequate pay for the troops." Weinberger refused to tell reporters what he had recommended to Reagan.
Other administration officials disclosed further details of his Wednesday proposal, however. They said Weinberger suggested "frontloading" a military pay raise from next fiscal year, 1986, to this fiscal year, 1985. This would reduce next year's budget, as Reagan had asked Weinberger to do, but would still give the military "every penny" of its pay raise, officials said.
The officials said Weinberger's plan would give the military no pay raise in 1986 but would, in effect, give the 2.1 million Americans in uniform a raise scheduled for January 1986 six months early.
The Pentagon had tentatively set that raise at 7.1 percent. Weinberger would make it 5.8 percent, officials said, but because it would start earlier, the military would get exactly the same amount of pay as originally planned by the end of 1986.
Officials said Weinberger assured the president that he could absorb the additional cost of the early pay raise this year because other Pentagon spending was running slower than expected. None of the proposals would affect the scheduled 4 percent military pay raise scheduled for next month.
Weinberger made the suggestions at a Wednesday luncheon with Reagan. White House spokesman Larry Speakes said Reagan has the proposals under advisement but would not comment further.
A senior official said Reagan may wait until January to resolve the apparent impasse over defense spending.
Other officials accused the defense secretary of playing "shell games" with Pentagon spending, trying to shift it from one year to the next rather than find genuine savings. "He hasn't saved us anything," said one senior official.
This official pointed out that while Reagan was seeking to "freeze" total spending at last year's levels, Weinberger was seeking an 11.4 percent increase in spending authority, from $284.5 billion this fiscal year to $316.8 billion next fiscal year. "It's sure hard to characterize that as a freeze," the official said.
But officials said Reagan was apparently pleased by Weinberger's effort, since he had come up with $6 billion in savings next year toward the total $8 billion goal. "That first year was fine," Reagan reportedly told Weinberger.
Officials said they were uncertain what the next step in the process would be. No further meetings are scheduled, Speakes said. "I don't know what's going to happen if we have to go back and try to find additional domestic savings," said one official.
Weinberger bristled before reporters yesterday as he declared that "it certainly was not I" who proposed freezing military pay. Asked who had proposed it, he said, "Well, there are others who are unenlightened about such matters who don't understand fully the effect of such things who may be talking about it."
"I'm on the record," he said, "and I'm not asking that anonymity be the condition to telling you anything or anything of the sort. It is important, I think, that the difference be noted."