Harvard will allow students to participate in the Reserve Officers Training Corps (ROTC) through 1995, although the University will continue to discuss if it should support the program, which discriminates against gays, President Neil L. Rudenstine said at a faculty meeting yesterday.

After more than 20 years of debate on the issue without nearing any resolution, the University will temporarily extend participation in ROTC so admits to the Class of 1998 can include ROTC scholarships in their decisions to matriculate, Rudenstine said.

"We have reached the point where early-action students offered admission to Harvard for this fall will soon need to know whether or not they will be able to use ROTC scholarships if they come here," Rudenstine said.

The extension, however, does not mean that the University will permanently keep its ROTC ties.

"We have been working toward a resolution that would both affirm our policy of nondiscrimination and maintain ROTC as an option for students attending Harvard," Rudenstine said. "While the outcome is not at all certain--and I want to stress that--the discussions have been serious, substantive and constructive."

ROTC first became a campus issue in the 1960s, when students and faculty called the program "anti-democratic and anti-civil-libertarian." Faculty resolutions abolished Harvard's ROTC programs in 1969. The University tempered its stance in 1979, however, and established its cur- rent policy which allows students to takenon-credit classes at MIT.

A Shrinking Budget Deficit

After the meeting's discussion of ROTC, Dean ofthe Faculty Jeremy R. Knowles said FAS has reducedits budget deficit by more than $3 million.

"We are driving towards a balanced budgetwithin a year or two," Knowles wrote in a letterto the Faculty on Feb. 9.

The budget deficit is the smallest since 1989and, as a percentage of the total unrestrictedbudget, is the lowest in seven years.

"I continue to view our present position withcautious optimism," Knowles wrote. "The optimismderives from the downward trajectory of the annualdeficit."

But Knowles cited three potentially majorobstacles to a balanced budget: the rising cost offaculty and staff benefits, the end of mandatoryretirement and the possibility of "campaignindiscipline" in the University's upcoming capitalcampaign.

And the University has already begun toconfront these obstacles.

The Benefits Review Task Force, chaired byProvost Jerry R. Green, is already examining thebenefits issue and a faculty committee hasestablished a set of guidelines designed to makeemeritus status more attractive. Knowles said thefaculty must work to raise funds for existingprograms and look to attract unrestricted funds inthe capital campaign.

Rudenstine said the absence of obviousfinancial "black holes" gives cause for optimism.

"As president, I feel very, very fortunate,"Rudenstine said. "I don't feel like there are noproblems, but there's no cliff we're about to falloff. That really is a blessing these days.