Clinton Following Reagan, Bush in Defense Job Policy but Subsidies for Weapons Sales Go a Step Further

Article excerpt

TWO YEARS AGO, several thousand workers at McDonnell Douglas Corp. in St. Louis County cheered when President George Bush announced that he had just approved the sale of 72 F-15 Eagles to Saudi Arabia.

Just weeks before, Bush had made a similar campaign-style stop in Fort Worth, Texas, promising workers at General Dynamics Corp. (now Lockheed) that he would approve the sale of F-16 Falcon fighters to Taiwan. They cheered, too - and no wonder.

The two decisions infuriated the Chinese, derailed a multilateral effort at curbing conventional arms sales and helped fuel an arms race in the Middle East. But Bush was on the ropes politically, and his challenger, Democrat Bill Clinton, had already said he wouldn't let foreign-policy precedent stand in the way of jobs for Americans.

Bush announced the decisions in campaign-style rallies. He told the McDonnell Douglas workers, "In these times of economic transition, I will do everything I can to keep Americans at work."

Against that backdrop, the Pentagon's confirmation this week that President Clinton might make American jobs a factor in approving the sale of U.S. weapons abroad strikes many specialists as a ringing endorsement of the obvious.

"All you hear is `Jobs, jobs, jobs,' " said Lawrence J. Korb, a senior fellow at the Brookings Institution who served at the Pentagon under President Ronald Reagan. On Wednesday, Korb told a conference in Washington on the arms trade: "We need people to look at the moral component of what we're doing, but I guess we don't like to talk about that any more."

Joel L. Johnson, vice president for international affairs at the Aerospace Industries Association, a trade group that has promoted the new policy, said that in most respects it would only bring Clinton's administration in line with the approach Reagan and Bush followed.

Johnson said, "It would make explicit that you consider the defense industrial base" in determining whether to go ahead with a particular overseas sale. "In the past we had the luxury to ignore that because the domestic market (for weapons) was so large. Now we don't."

But the new policy, when it comes to financing, goes beyond anything embraced by Clinton's Republican predecessors. If approved, the new policy would make the sale of weapons systems - once they passed muster on national security grounds - eligible for the same subsidized government financing now available to commercial exports through the Export-Import Bank. Proponents of the plan talk of a financing fund as big as $1 billion.

That part of the new policy is really new, Johnson said. "It represents a 180-degree turn from the last Democratic administration." President Jimmy Carter barred any direct government support at all for weapons exports.

If the bars to government subsidy continue, Johnson and other advocates of the new policy warn, the United States risks losing out in a market already marked by fierce competition.

Arms sales worldwide are falling fast, as governments everywhere face the same budget pressures Pentagon planners face in Washington. Adjusted for inflation, the dollar value of military exports worldwide dropped 54 percent between 1988 and 1993, according to data compiled by the Stockholm International Peace Research Institute, and is projected to drop even further.

But within that shrinking pie, the U.S. slice gets bigger by the year. Data compiled for last year show that the U.S. share of major weapons systems sold as exports was 48 percent. …