American Notes WASHINGTON

The collapse of communism in Eastern Europe could mean a reduced U.S. defense budget. And it means that America must spend more to support the thrust toward liberalization. To get around the money crunch, Senate Republican leader Robert Dole last week proposed cutting 5% from the funds allotted to foreign- aid recipients.

The savings in the $14.6 billion foreign-aid budget would go to East European nations and drug-fighting countries in South America. Nearly half the total is earmarked for five countries: Israel ($3 billion), Egypt ($2.1 billion), Turkey ($610 million), the Philippines ($360 million) and Pakistan ($490 million). Cutting aid to Israel is too sensitive an issue for most lawmakers, and aid to Egypt has been inviolate since the 1978 Camp David accords. Dole's idea may be politically inexpedient, but it underlines the need for flexibility at a time of rapid change.