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The tide began to recede in 1986, when Congress for the first time under Reagan cut the Pentagon budget below the previous year's. It did so again in 1987, and in 1988 allowed only modest growth, well below inflation. The 1989 budget will be the fourth relatively lean one in a row. Weinberger not only fought the trend, infuriating Congress by refusing even to discuss reductions, he continued to plan for future spending as if the Pentagon could count on once again getting a blank check. Last November, however, he resigned, to be succeeded by Carlucci, a veteran of 28 years in Government service, including the No. 2 jobs at the Department of Health, Education and Welfare, the Office of Management and Budget, the Pentagon and the CIA. Heading the Pentagon quickly proved to be his biggest challenge.
Weinberger left behind a budget request for fiscal 1989, which begins Oct. 1, that called for $333 billion in military funding. Negotiators for the White House and Congress agreed to reduce that to just under $300 billion -- with no guidelines on what to chop. The new Secretary of Defense had a mere five weeks before formal presentation of the amended budget to find $33 billion to slash.
Carlucci met the deadline and forced the Pentagon brass to come up with real cuts rather than paper ones. The Navy at first tried what cynics call the "Washington Monument strategy." That refers to the National Park Service practice of countering every budget cut with a proposal to reduce visiting hours at the nation's monuments -- knowing full well that Congress would never allow it. The Navy's version was to propose delaying a 4.3% military pay raise and killing both a Trident nuclear missile-firing submarine and two Los Angeles-class attack submarines, all congressional favorites. Carlucci coldly ordered the Navy to drop that ploy and instead mothball 16 aging frigates. Secretary of the Navy James Webb resigned in protest.
Critics outside the Pentagon, however, feel Carlucci did little more than trim the margins. Carlucci scoffs at such sniping. Says he: "My phone is ringing off the hook from people on ((Capitol)) Hill who don't like my killing this weapons system and that weapons system." In fact, though, the systems he has hit -- primarily an Army pilotless plane, the Midgetman single-warhead nuclear missile and an antisatellite system -- are unpopular with either the services, Congress or both.
Carlucci is now working on some five-year spending projections, based on the idea of a 2% annual increase in the Pentagon budget on top of inflation. Robert Costello, the Pentagon's "purchasing czar," estimates that such stability could enable the Defense Department to save as much as $30 billion annually through efficient management of buying programs, rather than the ) fits-and-starts practices forced by wildly fluctuating appropriations. Nonetheless, Carlucci recognizes that squeezing under even a 2% ceiling will require a "very intense major reorganization of the defense program."