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Saturday, October 17, 1998

Pentagon's Drought Is Relieved in Budget
Congress: Unexpected jump in spending may reverse years of decline and benefit Southern California.
By PAUL RICHTER, Times Staff Writer

WASHINGTON--The $8.4-billion boost to military spending in Congress' last-minute budget deal offers the first concrete proof that, after 14 years of post-Cold War decline, the defense budget might be headed for large increases in years to come.
     In moves that promise good news for the Southern California economy, lawmakers increased the $271-billion military budget with $1 billion for missile defense projects, $1.3 billion for military readiness, $1 billion to tackle the Pentagon's Year 2000 computer problems and $1.86 billion to cover the costs of the Bosnia deployment.
     Among other increases, an additional $1.5 billion is earmarked for the secret budgets of the intelligence agencies--spending that also could benefit defense hardware and aerospace companies in California.
     These unexpectedly large sums show that the services have succeeded, perhaps beyond their hopes, with a recent campaign to convince lawmakers that they had trimmed too far to permit the military to support far-flung operations with quality troops and up-to-date equipment.
     Only a few months ago, defense officials were struggling to live within flat budgets that they believed would continue for at least a decade. But some analysts said these huge increases have opened the way for the services to seek increases of as much as $25 billion, or nearly 10%, for each of the next several years.
     The specifics of the defense add-ons have not been fully worked out, so it remains unclear which projects promise the most for Southern California contractors. However, analysts noted that the 1999 add-ons and the multiyear upswing in defense spending that is almost sure to follow, will benefit defense industries that remain heavily concentrated in the state.
     After years of pledging that they could make do, the military chiefs recently have begun pointing to dangerous signs of strain in their services.
     They have said that the combination of limited resources and expanding overseas deployments have strained military units and families. They have cited spot shortages of parts and the understaffing of some Navy ships. And they have pointed to deteriorating pay and health and retirement benefits that have made it harder to recruit and keep top-quality troops.
     The supplemental spending totals, released by the House Appropriations Committee on Friday, represent a particular victory for House Speaker Newt Gingrich (R-Ga.), who vowed last week that any budget deal must include $1 in defense spending for each dollar in non-defense spending.
     "We think this is the right thing for all Americans," Gingrich said Friday.
     Congressional aides said the budget deal worked, in essence, because it allowed Democrats to brag about their domestic successes--on education and farm aid, for example--while permitting GOP lawmakers to boast of their success in providing money to meet national security needs.
     At the same time, however, the military package was lamented by defense spending foes, who contended that this sea change in the military defense budget came with little national debate and at a time when most Americans believe the United States faces no major national security threat. The United States has been spending about 3% of its gross domestic product on the military, compared with 6% during the Reagan administration buildup of the 1980s.
     The $1-billion add-on for missile defense suggests that this GOP priority may now have gained irresistible momentum.
     The Clinton administration has been seeking to put off a final decision on whether to try to deploy a national missile defense shield until 2000. In recent months, Pentagon officials have not been pushing for new spending on the program, arguing that they had about as much money as they could use in developing the complex technology.
     But with this increment, Congress showed its determination to push the project further, even though tests of the leading national missile defense technology, so-called Theater High Altitude Area Defense, have continued to result in failure.
     And analysts noted that the next Congress, which is expected to have even larger Republican majorities, is likely to be more inclined to vote for this outgrowth of Reagan-era "Star Wars" technology.
     Though the technology is unproved, "it's beginning to look like a done deal," said John Pike, an analyst at the Federation of American Scientists in Washington.
     Specifically, the $1-billion increment includes money for several missile defense projects, including $125 million for THAAD and $135 million for the Navy's Theater Wide missile defense program.
     Lawmakers hope that advances in the Navy program could be used to help the sputtering THAAD effort, said Elizabeth Hieter, an analyst for the Center for Strategic and Budgetary Assessments in Washington, which tracks defense spending.
     Money from the $1-billion missile defense pot will go to replace the inventory of missiles that have been used in the THAAD development program but which are aging and considered a possible cause of the program's shortcomings.
     Some defense budget watchers object that the eleventh-hour add-ons were made in haste and secrecy. And they predict that the final budget document, which was not available Friday, will show that the congressional leadership had written in many projects of debatable value to benefit their own constituencies.
     Times staff writer Janet Hook contributed to this story.

Copyright 1998 Los Angeles Times. All Rights Reserved

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