President Reagan's rearmament program is undergoing a fundamental restructuring as White House and Defense Department leaders scramble to adjust to what they estimate will be a slash of at least $300 billion in the next five-year defense plan, administration officials said yesterday.
"We're in a sea change," said one veteran of the Pentagon budget battles.
Despite the new austerity, Pentagon officials said, the military services are trying to cut their budgets for fiscal 1986 through 1990 without canceling prized hardware programs. The result, critics in the Pentagon predicted, will be less money devoted to preparing the armed services to fight, particularly a long war.
To cope with the new budget reality, the Army will buy less ammunition, the Navy will buy fewer ships, the Air Force will cancel marginal programs and the Marine Corps will reassess its modernization program.
The White House's Office of Management and Budget, in its recently published "Mid-Session Review of the 1986 Budget," projected $291 billion less for defense in fiscal 1986 through 1990 than Reagan had earmarked for his rearmament effort as recently as April.
White House officials said that Defense Secretary Caspar W. Weinberger this year, in contrast to the past when he appealed to Reagan for more money, appears to be resigned to seeing his budget slashed. "Cap has seen the writing on the wall," said an aide in agreeing there would be no Weinberger versus OMB rematch fight.
Pentagon officials who have been involved in the feast-and-famine cycles of defense funding through several administrations predicted that the real cut for that five-year period will be more than $400 billion.
Weinberger and his deputy, William H. Taft IV, rather than dictate cuts, have directed the armed services to slash their budgets for the next five years in proportion to what they have received in the past, Pentagon officials said.
Critics said changes in the rearmament program are so extensive that civilian rather than military leaders should reassess current strategy and make the necessary reductions. Weinberger in his 4 1/2 years of running the Pentagon has concentrated on raising record amounts of money rather than directing how the services spend it.
The White House, in making its projections, assumed the Defense Department would receive annual increases of 3 percent above inflation from Congress, and even that is an overly optimistic assumption in the view of many congressional leaders. Congress' funding cuts have been brought on by the increasing federal deficit and fears that the Pentagon was not spending its money wisely.
Taft, in one directive issued on a recent Thursday, urged the armed services to find savings of $228 billion by the following Monday for the five-year, fiscal 1986-90 period, Pentagon officials said.
The Army, Pentagon sources said, will not say so publicly, but to save billions it has virtually abandoned Reagan's objective to buy and stockpile enough ammunition to fight in Europe for 60 days.
In doing so, officials said, the Army is using an argument Congress made in questioning the stockpiling. U.S. allies have only enough ammunition to fight about 20 days, goes the argument, so why should the Army spend billions to fight alone for 60 days?
As for the Navy, said one Pentagon critic, it "will get its 600 ships by 1990, but they will be carriers and rowboats because of budget constraints." The Congressional Research Service has issued a report by Ronald O'Rourke that said the Navy will not be able to afford the 137 cruisers and destroyers Navy leaders said they needed to protect carriers and other ships.
The publication Defense Week said yesterday that the Navy is proposing to buy three rather than five DDG51 class destroyers a year as part of its response to the budget crunch. Stretchouts in other ship programs are in prospect, Pentagon officials said, including submarines.
The Air Force already has agreed to cancel two aircraft procurement programs, the Fairchild T46 trainer and the Sikorsky HH60, a Blackhawk helicopter modified for special operations, such as landings behind enemy lines.
And, according to Pentagon officials, the Air Force is looking for more cuts. Deploying the small, mobile Midgetman missile would cost more than deploying more giant, silo-busting MX rockets, Air Force officials said, in acknowledging that retrenchment is throwing a different light on strategic choices.
The Marines want to buy a new fleet of assault aircraft, designated the JVX, but the price tag of $40 billion to $50 billion for 550 of the "tilt-rotor" planes is giving Pentagon officials second thoughts as they look ahead at years of relative austerity when they had counted on years of plenty, sources said.
In April, the OMB predicted annual increases in defense money would range from 8.8 percent 13.4 percent from fiscal 1986 through 1990, not allowing for inflation. In its Aug. 30 mid-session review, OMB forecast annual increases between 3.9 percent and 7.2 percent. Under White House inflation assumptions, this would provide for a real growth of about 3 percent for fiscal 1987 through fiscal 1990.