President Reagan handed the Pentagon its new financial marching...


WASHINGTON -- President Reagan handed the Pentagon its new financial marching orders Saturday: reduce direct defense outlays by $13 billion over the next three years and cut contracted military expenses by up to $22 billion over the same period.

Reagan, spending the weekend at Camp David, 'has a pretty good idea' which military programs will be affected by the cuts, White House communications director David Gergen told reporters in a late afternoon briefing.


He said Reagan is confident the latest change in plans will still meet his goal of increasing military spending 7 percent a year.

Secretary of Defense Caspar Weinberger was instructed to determine exactly how the cuts will affect the military, but Gergen said no strategic weapons will be involved.

'The president re-emphasized that his decision reflects his commitment to two major goals: a strong economy and a strong nation defense,' Gergen said.


He said the revised defense outlay ceilings will reduce military spending by $2 billion in fiscal year 1982, by $5 billion in fiscal year 1983 and by $6 billion in fiscal year 1984. The outlay ceiling is the amount of money that may actually be spent.

The total obligation authority, or the amount of money the Pentagon may contract to spend, will be reduced '$21 to $22 billion over the three year period,' Gergen said.

Until 'ultimate' decisions are made about what military programs will be affected by the cuts in contracted spending, Gergen said exact figures will not be available.

The Pentagon's current 'obligation authority' stands at $222.2 billion for fiscal year 1982, $253 billion for fiscal year 1983 and $288 billion for fiscal year 1984.

Gergen said the Defense Department budget will not be cut further in Reagan's search for more spending reductions to achieve his goal of a balanced federal budget in 1984.

The projected cuts in defense spending sparked debate between Weinberger and budget director David Stockman. However, statements from both men indicating they were pleased with the outcome accompanied the president's memorandum Saturday.

Reagan plans to slice up to $75 billion from the fiscal year 1983 and 1984 budgets. The $11 billion the administration now wants to cut from the Pentagon budget means the president must eliminate another $63 billion from other government agencies to achieve his goal.


'This is the first installment,' Gergen said. 'These changes in the defense budget are, of course, the first reductions in plans previously announced by the president to identify savings in overall spending that will help to bring the budget into balance by 1984 and in the process achieve economic recovery.' White House deputy press secretary Larry Speakes said the president hopes to deliever his final decisions on overall spending levels to the Cabinet and Congress this week.

But, he said, a full public announcement of his plans, perhaps a nationwide television address, may not come for another week.

'We're looking at Tuesday' for a presidential meeting with his Cabinet, Speakes said.

Reagan probably will begin showing his cards to Congress Monday in a White House meeting with 19 conservative 'boll weevil' Democrats and a lunch with House Speaker Thomas O'Neill, D-Mass., and House Republican leader Bob Michel.

Since returning from a month's vacation in California a week ago, Reagan has worked almost exclusively on making even deeper slashes in the tight federal spending program.

Reagan leaves Thursday for a two-day trip to Michigan and Colorado, returning to the White House Friday evening.

Speakes said the administration is optimistic new budget cuts will pass Congress without difficulty. 'Right now, our assessment is there is real sentiment for further budget cuts up there,' he said


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