THE PENTAGON again is spending credibility to save its budget. It is a damaging expenditure, the kind from which the gain can never equal the loss. In at least three major ways the fiscal consequences of the budget have been understated or obscured. The goal is to continue to win approval of a larger program. But the tactic may have the contrary result. It is costing the administration standing and support among even some of its natural allies on defense, both in and out of Congress. The defense appropriations process was hardly likely to be a model of constructive debate this year in any case. The administration's no- holds-barred approach will only make it worse.
1.The administration presented its defense request for next year as a real or after-inflation increase of only 3 percent from the agreed-upon level for the current year. That is sophistry, only contrivedly true. The request is only 3 percent above the level set in the congressional budget resolution, about halfway through the budget process last year. But as leading members of Congress have tartly reminded defense officials in the last few days, it is 8 percent above the level finally agreed to, in the defense appropriations bill as trimmed by Gramm-Rudman.
In part what you have here is an important shift in vocabulary. Congress measures budget requests by what are called baselines. A baseline is not what Congress last appropriated for a program but the estimated cost of sustaining the program in the year ahead. For most domestic programs this is current cost adjusted for likely inflation and in some cases population growth. But for defense in recent years there has been a different standard. To be called an increase, a defense request had to be above not just the appropriation for the year before, nor even that appropriation sweetened by the expected inflation rate; it had to be above the projected defense buildup path. Thus very large increases over the year before were still sometimes called cuts.
By these old rules, it might have been legitimate to call this year's request only a 3 percent real increase. But Congress is now in the midst of changing the way it measures defense, so that it will be judged by the same standard as other programs. The Pentagon has not willingly adjusted to that.
2.When Congress appropriates funds for defense each year, what it gives the Pentagon is spending authority. Particularly for larger items, not all the authority is used in the same year. In any year there is a difference between appropriations and outlays -- what is approved and what is actually spent. But outlays are what count toward the deficit, so there is a fairly well established though sometimes inexact system for estimating the likely outlay effects of any appropriation. An appropriation to build an aircraft carrier will spend out slowly, while one for maintenance will disappear fast.
The present budget does not follow this traditional estimating system. Instead it picks up what everyone knew was a fudged outlay estimate adopted as a political compromise by House and Senate last year in working out the budget resolution. The Congressional Budget Office and outside estimators say the budget thus understates likely outlays and the likely deficit by as much as $15 billion.
3.The budget is also spring-loaded in another sense. Various members of Congress, including notably Sam Nunn, ranking Democrat on the Senate Armed Services Committee, warned last year that the Pentagon was starting work on more large future weapons systems than it would ever be able to afford. The warning has been ignored.
The research and development account is where new weapons enter the budget (often at relatively low early cost). It is up sharply this year; work would actually accelerate on all the wished-for items that were the subject of last year's admonition to choose. To help pay for this, there are stretchouts in the procurement process -- the buying of developed weapons.
The Pentagon says that it has adjusted to leaner times. But it has made fewer cuts of a fundamental kind than either its rhetoric or the official outlay estimates suggest. This year as before, the cutting chore has been left unhelpfully to Congress; the budget is still being packed for the future. It is a terrible way to proceed.