Gen. Colin L. Powell, chairman of the Joint Chiefs of Staff, said yesterday he does not favor compromising with Congress by offering to cut the defense budget more than the Bush administration's proposed 2-percent-per-year because Congress will just ask for more reductions.

In a speech to the National Press Club, Powell cautioned Congress that its funding deliberations the next several months are crucial to the future of the U.S. military and that drastic cuts "will force us to start breaking the back of our armed forces."

Powell's address follows a week of jockeying between Congress and the administration over the proposed $306.9 billion defense budget for fiscal 1991. And Powell, like Defense Secretary Richard B. Cheney earlier in the week, sought to leave the political onus on Congress to make deeper cuts or to cancel politically popular weapon systems -- and related jobs -- in an election year.

In his speech, Powell pleaded forcefully for more gradual reductions in defense spending and for maintaining a substantial military establishment in the future.

Powell said that in the nine months since he was named chairman, "I have been reminded again and again . . . that this is still a dangerous world and that you'd better be able to respond if someone challenges your interests." He cited the invasion of Panama, the U.S. naval deployment in the Persian Gulf, the evacuation of Liberia and U.S. military assistance to Philippines President Corazon Aquino during a coup attempt as recent examples of how U.S. military force or "presence" had furthered U.S. interests.

"We remain the ultimate guarantor of peace and prosperity in the world," he said.

At the same time, he asserted, "We're cutting programs. We want to close bases. We've frozen construction and hiring. We're cutting troops. Believe it or not, we're even starting to cut generals.

"What we need," he continued, "is not more insights on how to trim at the margins. What we really need is breathing space; we need time to make the plans work and we need a gradual approach that will not break the armed forces."

On Tuesday, Cheney presented to the congressional leadership a plan that would reduce major land, air and naval forces 25 percent over the next five years, but would reduce the defense budget by only 10 percent, roughly the same funding proposal Cheney presented in January.

Rep. Les Aspin (D-Wis.) has countered that real defense spending could be reduced 18 to 27 percent over five years by cutting into many of the major weapon systems Cheney did not include in his plan. House and Senate budget committees have set funding targets that would force Cheney to make $155 billion to $208 billion in additional cuts during the next five years.

Yesterday, Powell said Cheney had presented the "illustrative" plan this week "to demonstrate that we are willing to examine any reasonable proposal," but he warned that the much deeper cuts contemplated by the budget committees could wreak havoc on the all-volunteer military.

"If we do it too fast, we won't get better; we'll get hollow," he said, referring to the complaints of the "hollow" Army that dogged the poorly equipped and manned U.S. military forces after the Vietnam War. "That we must not let happen," Powell added.

In remarks to reporters before his speech, Powell said, "In this town, it doesn't do any good" to give Congress a compromise offer on further reducing defense spending, "because then that immediately becomes the ceiling."

He said a good example of this was Aspin's reaction this week to Cheney's 25 percent "illustrative" reduction. Before leaving for Wisconsin Thursday, Aspin told The Boston Globe: "Before, we were vulnerable to Cheney accusing the House of doing 'meat-axe cuts.' Now we can say, 'We're on the road to your 25 percent force structure cut, but we're also cutting R&D {research and development} proportionately and cutting back on some modernization {of weapons}.' "

In the meantime, Powell said, he has been "punching and cajoling" the military leadership to reevaluate the roles and missions in the less threatening security environment created by the collapse of the Soviet-led Warsaw Pact.

Powell made it clear that President Bush has not decided how deep a cut in defense he will support. "I have not been given my mark," he said.

Responding to questions after the speech, Powell said it is inevitable that a shrinking U.S. military will take away career opportunities from minorities, for whom military jobs have provided a traditional path of upward mobility.

"That's what happens when you start to talk about reductions of the size everybody in this town is talking about," Powell said. "But that is mathematics -- as we get smaller, we will be taking in fewer people."