Bush Hopes Gorbachev ‘Stays Strong’ : Administration: President at news conference also defends contacts with China and says budget due next week will begin restructuring of U.S. military.

WASHINGTON —  President Bush, speaking out on troubles in the world’s two Communist giants, said today he hopes Soviet President Mikhail S. Gorbachev “stays strong” in the face of domestic strife and defended White House overtures to China’s rulers.

At a news conference that touched on an array of other topics, Bush also said his fiscal 1991 budget, to be presented next week, will begin a restructuring of the U.S. military and announced he has decided to support elevation of the Environmental Protection Agency to Cabinet status.

Asked first if he is concerned about Gorbachev’s future because of the ethnic and nationalist unrest in the Soviet republic of Azerbaijan, Bush said, “I think the answer to your question unfolds every day. We don’t really know.”

“I can’t make predictions about that, but I know that I hope that he not only survives but stays strong because I think it is in our interest that perestroika succeed and go forward,” the President said.

At the same time, however, Bush echoed the stepped-up warnings of his Administration over the weekend that Gorbachev’s efforts to restore order must not go too far.

“Any time you have a use of force and a loss of life, we are concerned,” he told reporters. “But I don’t believe I can judge that question right now. . . . He’s faced with an ethnic problem here and an internal problem of enormous dimensions.”

At the same time, Bush defended his efforts to mend relations with China’s government while admitting that Congress appeared poised to override his recent veto of a bill to protect Chinese students in this country.

Insisting that relations with Beijing must be maintained despite the government’s bloody repression last spring of pro-democracy demonstrators, Bush repeated that the bill would anger Chinese leaders.

If lawmakers override his veto, Bush said, “the long-term consequences are potentially great. And Congress, in my view, will have only itself to blame.”