The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Monday, March 4, 1996                  TAG: 9603020157
SECTION: BUSINESS WEEKLY          PAGE: 04   EDITION: FINAL 
TYPE: Forum 
SOURCE: BY HARLAN K. ULLMAN 
                                             LENGTH: Medium:   82 lines

DEFENSE SPENDING DWINDLING

America's active-duty military force numbers about 1.5 million men and women, highly trained and ready to fight nearly two simultaneous major regional contingencies such as a second Desert Storm and another Korean war.

This year, about $265 billion will be spent on defense. But it is no secret that this amount of funding will not pay all the costs of a two-MRC strategy.

Strategic critics argue, with some justification, that the requirements of two MRCs are geopolitically excessive, militarily unnecessary and economically unaffordable.

They would reduce these requirements and thereby cut forces and budgets as well. Social critics agree that the post-Cold War world does not require so many robust American forces.

Sadly, neither the current defense posture nor the alternatives proposed by critics can be sustained by budgets that are likely to be approved by Congress. In fact, one consequence of the balanced budget agreement is that defense spending faces cuts of about 2 percent per year for the long term.

Chronic underfunding of defense is likely to continue even with lower force levels. And this capacity for underfunding has been exacerbated by the tendency to focus on only one part of the defense equation - namely, on the input side of defining what we need rather than on the output side of ensuring we can maintain whatever we get.

In addition to chronic underfunding, there is significant real annual cost growth embedded in defense. This means that real increases in spending are necessary each year just to maintain current levels. During the Cold War, the rule of thumb was the need for annual real growth of about 3 to 4 percent to sustain forces at both constant size and readiness for war. Today, that real annual growth requirement is even higher.

Unless defense spending increases each year, or the process is dramatically reformed to produce major efficiencies probably not possible, overall defense capacity will predictably contract, and perhaps very substantially.

The so-called military ``teeth'' to ``tail'' ratio roughly illustrates the impact of underfunding and cost growth on military power. ``Teeth'' are the fighting forces - the ships, aircraft, tanks and personnel that will wage war and carry out the operational missions. ``Tail'' is the infrastructure - from military bases to health care, day care, environmental cleanup, the defense industrial base and all the other enormous support and logistical resources for the fighting forces.

The year 1985, during the Reagan buildup, was the last year that money spent on teeth and tail was about equal. Today, less than two-fifths of the defense budget goes to teeth and, if current trends persist, that figure could be reduced to one-third or less.

In simple terms, even if the currently approved defense plan continues, over the next few years there will be a steady erosion and disintegration in U.S. fighting power by perhaps a third or more.

The chairman of the Joint Chiefs of Staff has alluded to this, and his recent assessment that a shortfall of nearly $80 billion exists in the procurement account is a point we ignore at our peril.

Whether this ``hollowing'' of fighting capability will have any strategic consequences is unanswerable. We would be well advised, however, not to let this trend play out through ignorance or by default.

What should be done? Unfortunately, the best solution would be a national debate or referendum on defense. However, as the presidential campaign of the one candidate running on a foreign and defense policy platform - Sen. Dick Lugar of Indiana - showed, there was no public interest.

A more viable first step after the November elections would be to establish a joint presidential-congressional commission on defense and national security. And the first task of the commission should be to establish where the current program is headed in realistic and accurate terms.

Until we look seriously at defense and exercise some common sense, one point is crystal clear: We are headed for a much weaker, far less ready military capability. We may be able to accept that state of reduced military power without harming the nation's interests.

But it would be irresponsible and silly if that condition were to transpire by default. MEMO: Harlan K. Ullman is a senior associate with the Center for Strategic and

International Studies. He wrote this for the Washington Post.

by CNB