Although President Reagan's unprecedented five-year military buildup has crested, military spending will continue to rise through the rest of his presidency and beyond even if annual Pentagon appropriations decline sharply, according to Defense Department, congressional and industry officials.
The beginning of final work this week by the House and Senate Armed Services committees on the 1987 defense budget dramatizes the end of the Pentagon's boom times. Reagan has no chance of getting anything close to the amounts he has requested for fiscal 1987, 1988 and 1989, and the only serious question is whether to freeze the military budget near its present level or shove it downhill for the rest of the decade, congressional and defense sources say.
Instead of the requested 11 percent increase from this fiscal year to next -- from $286 billion to $320 billion -- it now is virtually certain that Reagan will be lucky to get the $301 billion the Congressional Budget Office figures he needs in fiscal 1987 just to keep up with inflation.
But because Congress in the past five years has appropriated money faster than the Pentagon could spend it, billions are piled up in the Defense Department's bank account. Most of that money is owed to contractors for weapons that have been ordered but not yet delivered.
These installment payments, coupled with the roughly $300 billion the Pentagon can expect Congress to appropriate annually in coming years, will keep spending on an upswing. For example, Congress appropriated $996 billion from fiscal 1982 through 1985 during the big buildup years of Reagan's first term. The Pentagon spent $855 billion, leaving an unspent $142 billion.
The Defense Department can also count on money from a couple of other sources.
The Pentagon has found another dividend from overly generous inflation cushions. Also, Sen. Ted Stevens (R-Alaska), chairman of the Senate Appropriations defense subcommittee, is expected to help, by appropriating more money than the House and Senate Armed Services committees authorize, a maneuver he used last year.
The paradox of stagnant appropriations coupled with increased spending is followed by another paradox: despite the fact that the Pentagon will be spending more money than ever through the rest of the 1980s, the Army, Navy, Air Force and Marine Corps are in for relative austerity, in part because of their ambitious plans drafted during the heyday of the Reagan defense binge.
Even with rising spending, the services will be unable to finish all of the programs now under way, although many specialists believe it will take a few years of belt-tightening before Congress and the Pentagon cancel weapons programs outright rather than stretch them out over a longer period of time.
"We've got a Congress determined to give less money to defense," Sen. Barry Goldwater (R-Ariz.), retiring chairman of the Senate Armed Services Committee, said in looking at the Pentagon's financial future. "They're going to be able to live with it this year, but after this year we're going to have a great problem."
The cuts after this year, Goldwater said, cannot be just around the edges and may have to include personnel reductions.
Senate Armed Services subcommittees already have move in this direction. They have recommended that Pentagon civilian employment be reduced by 27,000 people to an even 1 million, and that the Navy add only an extra 6,000, not the requested 12,000, to its active duty force.
"We've got an awful lot of programs started," said Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, "and many of them are already at inefficient production rates. The Pentagon and Congress have not had enough of a crisis to force the hard choices. Without a crisis, we're going to continue to muddle through rather than make choices to fit a strategy. It's kind of a tragedy, really."
Some analysts believe that the big increases Reagan requested in fiscal 1987 for the operation and maintenance of existing weaponry and for research will be more inviting targets for budget cutters who often find it hard to kill questionable weapons which are in production and have powerful political and contractor patrons.
Reagan wants to increase the operations and maintenance account from $75 billion to $86 billion next year, an $11 billion increase. A number of lawmakers want to save about $8 billion by permitting only enough growth to cover inflation.
Reagan's research budget calls for a rise from $34 billion to $42 billion. There is widespread sentiment in Congress to hold the account at the current level plus inflation, which would save about $5 billion. Forty-eight senators already have vowed to hold Reagan's Strategic Defense Initiative to $3 billion in fiscal 1987, $1.8 billion less than the White House wants for the missile defense research program.
Additional billions are almost certain to come from postponing or slowing such new starts as the Army LHX (light helicopter experimental), Navy V22 Osprey tilt rotor plane and Air Force C17 transport. Those programs are part of the Pentagon's own hit list.
The lawmakers in the coming weeks almost certainly will cut the procurement account rather than approving Reagan's request for an increase from $93 billion to $96 billion. Stretching out the purchases of planes and tanks, refusing to appropriate the $454 million requested to buy items for the Navy's new SS21 attack submarine, and cancelling little programs few people know about are among the expected economy moves.
In the eye of this political storm over how much is enough for defense is Secretary Caspar W. Weinberger. He has instructed the services to plan their future budgets on the assumption that they will keep receiving 3 percent growth above inflation adjustments, and that Reagan will receive his requested $320 billion for fiscal 1987.
As one high-ranking Pentagon official said of the secretary's approach to the budget: "The most single-minded man I've ever met."