But the plan calls for maintaining defense outlays at the $290 billion level for three years.

Mr. Bush's peace dividend - or savings on previously planned defense outlays - would total about $66 billion by 1997.

A close look at the quarter of all defense outlays that has gone into nuclear weapons suggests that a good portion was wasted.

By the end of the decade, defense outlays are projected to decline in real terms by more than one-third from the highs of the 1980's.

Tokyo's defense outlays have now risen to some $30 billion a year, ranking it among the world's top five spenders.

China's defense outlays increased an average of about 15 percent a year from 1990 to 2005, according to the Chinese military.

As defense outlays fall, the structure of defense spending will change.

For example, Japan counts road tolls not paid by members of the American military as part of their defense outlays.

Mr. Carlucci has proposed that after a small dip in 1989, real defense outlays should grow by about 2 percent a year for the next four or five years.

And for every one-dollar reduction in defense outlays, they added two dollars to domestic spending.