How the Defense Budget Crashed

By WALTER ISAACSON

The President himself led the charge. In a concentrated campaign lasting more than a month, he sought to justify his proposed increase of 10.7% in military spending for fiscal 1984. Republicans in the Senate had agreed to delay considering the budget while he pressed his case on TV, on the road and in private. Some hoped that Reagan would carry the day by rallying voter support for the full range of military needs he endorses. Others hoped he would see the need to modify his stance. In the end he failed to do either. His public crusade backfired badly, and his unyielding position led to a stunning rebuff at the hands of his own party leaders.

Caught in the middle was Republican Pete Domenici, chairman of the Senate Budget Committee, who hoped to be the architect of a face-saving compromise. After House Democrats had passed a budget plan that would raise defense spending approximately 4%, the moderate New Mexico Senator believed that the White House would eventually try to reach a bipartisan accommodation at about 7% real growth. But Domenici's hopes were shattered last Tuesday when G.O.P. members of the Budget Committee were summoned to the White House to hear the President's final offer: a mere $10 billion trim in the Pentagon's nearly $2 trillion five-year spending plan, to be accomplished by using lower figures for inflation, fuel prices and MX basing costs.

These were "non-options," Domenici fumed after the session with Reagan. "There were no significant changes. It was impossible." Said Mark Andrews of North Dakota, who had been elected in the Reagan landslide of 1980: "These great savings turn out to be non-savings." Andrews dismissed the lower fuel costs as "just a windfall from some sheik." Nor did conservative Democrats give any promise of support. Complained James Exon of Nebraska: "Not a single bullet has been cut." Members of both parties remained unconvinced that the nation could afford the buildup Reagan envisions in the face of a fiscal 1983 budget deficit that now approaches $208 billion.

In the meeting, Reagan tried to convince his party colleagues that he had won public backing for large defense increases with his star wars speech nearly three weeks ago outlining the Soviet menace. Dan Quayle of Indiana gaped at the President. "I found it hard to believe he was saying that," Quayle commented later. "My state is conservative, but people don't see the Soviet threat. They just ask, 'Why do we need these expenditures?' " Slade Gorton told the President that the voters in his home state of Washington wanted cuts in the defense budget. Reagan shot back: "When are we going to have enough guts to do what is right instead of what is popular?" But even John Tower of Texas, a staunch hawk, came away insisting that the President's military budget was doomed.

On Thursday, the day of the Budget Committee meeting, Defense Secretary Caspar Weinberger finally agreed to accept a 7.9% increase. Five minutes before the vote, Reagan called Domenici to ask for more time to negotiate. The conversation was heated. "No, we're too far along," Domenici replied. At Democratic insistence, Reagan's proposal for 10.7% was put to a vote. It failed in the Republican-dominated committee by 19 to 2. The final slap came when the committee passed, by a 17-to-4 majority, an increase of only 5%. That would trim up to $13 billion from the proposed $274 billion defense budget for fiscal 1984, a trim that the various services would have to adjust to, probably by stretching out weapons purchases and cutting back funds for operation and maintenance.

Reagan's rigid approach, both in his negotiations with Congress and in his appeal to the public, was strongly urged by National Security Adviser William Clark, who felt that the President's personal efforts could salvage the dwindling national consensus for more defense spending. The tactic was consistent with Reagan's deepest instincts; he fervently accepted Weinberger's arguments that the buildup proposed was the "bare minimum" needed for national security.

The more pragmatic wing in the White House, led by Chief of Staff James Baker, feared that the President's tough talk about missiles and military threats could resurrect the image lingering in the minds of some voters that Reagan talks too often like a "warmonger." Although they had persuaded Reagan to down-play the defense issue before the 1980 elections, this time these advisers deferred to Clark and Weinberger. Some even saw it as a test between two competing strategies on the best way to implement the Reagan agenda: the "let Reagan be Reagan" hard-liners vs. those who prefer to win legislative victories through deft compromises.

The repudiation that Reagan suffered, the pragmatists argue, showed that going public with a tough defense of defense was counterproductive. "It polarized the issue and made a favorable compromise much more difficult," said one White House aide. "We shouldn't put missiles on the TV screen too often," said another senior staffer.

Now the President appears ready to try the other tack. Baker has been authorized to begin quiet negotiations with the Budget Committee to push the defense increase closer to 7%--which is the consensus among moderates in Congress of what a generous level would be--before the final 1984 spending package is approved. What was intended as a campaign to educate the public about defense spending turned out to be an education for the White House on political realities.

--By Walter Isaacson. Reported by Douglas Brew and Evan Thomas/Washington

With reporting by Douglas Brew, Evan Thomas This file is automatically generated by a robot program, so viewer discretion is required.