STAR WARS AND DEFICITS

THE REAGAN ADMINISTRATION'S innovative interpretation of the Antiballistic Missiles Treaty, it is widely acknowledged, is clouding the arms control negotiations between the United States and the Soviet Union at Geneva, relations between this country and its principal allies, and cooperation between the White House and Capitol Hill. Less generally perceived is the effect the growing debate is almost certain to have on the budget and trade deficits.

When the president's defense budget was presented to Congress a little over a month ago, there was remarkable lack of criticism from Democrats about the size of the pie. But as the president's plans grow for early testing of U.S. Star Wars capabilities - possible under his "broad" interpretation of the ABM treaty - the issue of how to cut the pie has mushroomed.Mr. Reagan is asking for $312 billion for fiscal 1988, an inflation- adjusted increase of 3 percent, plus a supplemental fiscal 1987 appropriation of $2.8 billion. In the words of Les Aspin, D.-Wis., the chairman of the House Armed Services Committee, "the figures aren't so crazy as to be irrelevant, as was true the last three years."

In the past two decades, inflation-adjusted defense budget authority has ridden a fiscal seesaw, falling in the final Vietnam years, 1970 to 1975, rising slightly in the Ford administration, holding relatively level in the Carter years, moving up sharply in the early Reagan years, 1981 to 1985, and falling in 1986 and 1987.

In those last years, the administration asked for more, much more, but Congress chose to pare down the requests. In seeking only an inflation-adjus ted 3 percent increase for fiscal 1988, the administration obviously was trying to make peace with Congress, both houses of which are controlled by the Democrats. But in putting its highest priority on Star Wars, it threatened to undo whatever gains such a gesture might have achieved in cooperation with the Hill.

That was made crystal clear when Sen. Sam Nunn, the Georgia Democrat and defense guru, warned the president Feb. 6 that his broad interpretation of the ABM treaty without consultation with the Senate - giving a go-ahead to early Star Wars testing - would provoke a "constitutional crisis of profound dimensions."

The Democrats have no intention of being tagged anew as soft on defense. But Sen. Nunn, and many of his colleagues from the Democratic side of the aisle, want greater emphasis placed on conventional weapons. The senator, a conservative in many ways, is known to question the sense of relying as heavily as the United States does on nuclear weapons while the Soviets engage in a conventional arms buildup in Europe and elsewhere.

In any event, a 3 percent growth in inflation-adjusted defense spending doesn't bode well for reducing the budget deficit. Gramm-Rudman calls for cutting the deficit to $108 billion in fiscal 1988, $72 billion in fiscal 1989, $36 billion in fiscal 1990 and zero in fiscal 1991. With a 3 percent inflation-adjusted defense increase, however, The Congressional Budget Office sees a decline from $198 billion in fiscal 1988 to only $163 billion in fiscal 1991. And that's with no increase in non-defense spending, an assumption passage of the $20 billion Clean Waters Act already has breached.

Since the trade deficit, most economists believe, is tied in lockstep with the budget deficit, the hope for reduction in the trade deficit similarly is not good, and the likelihood of protectionist legislation grows.

Not a happy scenario, but one unlikely to change unless the president trims his plans for Star Wars or, even more unlikely, agrees to a tax increase.

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