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Mikhail S. Gorbachev acknowledged Tuesday that the Kremlin spends $118 billion a year for defense - nearly four times the previous official claim - and promised that defense cuts would improve people's lives.

The Soviet president disclosed the figure in a speech to the new Congress in which he also promised to root out bureaucrats who are holding back reforms and pledged an attack on the special privileges of Soviet officials.He said the savings from a military budget trimmed by more than 13 percent would be channeled into raising the standard of living of a nation plagued by chronic shortages and shoddy goods.

Meanwhile, in Paris, Soviet Foreign Minister Eduard Shevardnadze called U.S. President Bush's four-point plan calling for a 20 percent cut in U.S. combat forces stationed in Europe a step in the right direction. In a speech to NATO leaders in Brussels Monday Bush also called for cuts in combat aircraft and military helicopters on both sides.

Shevardnadze, in an address to the first day of an East-West conference on human rights, said the Soviet delegation at Vienna talks on conventional disarmament would be ready to discuss the ideas in detail.

In Bonn, a West German magazine released a poll showing a vast majority of Soviet citizens favor a withdrawal of U.S. and Soviet troops from Europe.

The weekly magazine, Stern, said almost 90 percent of the respondents expressed sympathy for Soviet leader Gorbachev and 70 percent felt his reform policy would have positive effects on East-West relations.

And in Moscow, Soviet military experts say they are carefully analyzing Bush's proposals.

But Gorbachev made no direct response to Bush's proposals in his 95-minute speech.

NATO summit

Bush left Brussels Tuesday clearly the hero of the NATO summit for arranging a compromise that saves face for Western leaders over the thorny issue of short-range nuclear missiles based in West Germany.

As for Moscow's reaction, Bush said, at least "they didn't slam the door."

The 16 heads of government in NATO agreed to accept Bush's conventional arms proposal for negotiation with the Soviets and assured the West Germans that a decision on modernization or replacement of U.S. Lance missiles, which Germany opposes, will be delayed until 1992.

But the United States won agreement to continue research and development of an updated Lance.

Bush said there has not been a more successful summit in years.

Gorbachev's speech

During his lengthy speech, Gorbachev told the Congress that military spending would be reduced by $15.3 billion by the end of 1991, prompting delegates to burst into applause.

The traditionally secretive Soviet government has long concealed its true military expenditures, complicating East-West arms talks. In October, the official budget for 1989 allocated $32 billion for the military.

"This is certainly coming closer to the truth," said a Western diplomat.