j Monday, January 27, 1986 A17  
Suppose you were told that the president would agree to a budget-balancing plan that exempts over half of total spending from cuts and requires that half the cuts come from defense. Further, suppose you were told that the plan would require cuts in affected areas of 10 to 15 percent over 4 consecutive years, while outlays in unaffected programs such as Social Security would rise steadily at about 7 percent a year.</br></br>Given these facts, you might suppose that a deficit reduction plan weighted against defense and in favor of Social Security might be justified by an imbalance between defense and social spending that had grown: up over past years.</br></br>But consider the facts: since 1967, the year before Lyndon JohnsonÛªs guns-and-butter budget proposed a record peacetime deficit of $25 billion, the share of GNP devoted to entitlementsÛÓincluding Social Security, Medicare and MedicaidÛÓhas risen from 5.9 percent to 11.3 percent in 1985. Meanwhile, the share of GNP devoted to national defense has fallen from 9.2 percent in 1967 to 6.5 percent in 1985. Nondefense discretionary spending that finances government operations, grants to state and local governments, and research and education programs aimed at the young has stayed between 4 and 5 percent of GNP.</br></br>A clear pattern has developed. Defense spending is cyclical. It rose during the Vietnam conflict and fell sharply thereafter until 1981 when it reached 5.5 percent of GNP. In contrast, the growth of spending on entitlements has followed a steady, upward trend. During the decade between 1957 and 1967, spending on entitlements rose from 3.9 percent of GNP to 5.9 percent. It rose much more rapidly during the eight years after 1967, reaching 10.6 percent of GNP by 1975 and rising to over 11 percent of GNP in the 1980s.</br></br>It is the growth of spending on entitlements and other social programs that has made the guns-and-butter budget option far more expensive. Even Lyndon JohnsonÛªs 1968 guns-and-butter budget set out- lays at 21 percent of GNP. In 1985 the guns-and-butter option, with defense at 6.5 percent of GNP instead of 1968Ûªs 9.8 percent, cost nearly 25 percent of GNP. The difference absent a tax increase has meant deficits running at about 5 percent of GNP.