President Bush led the ceremonial swearing-in of Defense Secretary Dick Cheney at the Pentagon and issued a warning against making unilateral cuts in U.S. or NATO forces based on Soviet reforms.

"Let me say clearly: Now is not the time for America and its allies to make unilateral reductions, to relax our defense efforts," Bush said Tuesday at the outside ceremony attended by dignitaries, politicians and Pentagon employees.Under cloudy skies and in a brisk wind, Bush watched as Cheney was sworn in as the nation's 17th defense secretary in the center courtyard of the Pentagon - an area jokingly called "ground zero" by those who work there.

Cheney, 48, the former assistant House Republican leader, was officially sworn in Friday but Tuesday's ceremony was intended to show that the Defense Department is ready to go to work after nearly two months without a leader.

Bush told thousands of Pentagon employees that while he is "positive" about the changing Soviet policy under Mikhail Gorbachev, there are "still more questions than answers."

"We should continue our successful policy of flexibility combined with strength and firm resolve," Bush said.

At a time of tight federal budgets, some members of Congress have proposed reducing U.S. troop levels in Western Europe. Gorbachev's low-key style has also led to suggestions in NATO countries of scaling back military forces.

Cheney, a conservative former six-term member of the House and former chief of staff to President Gerald Ford, followed Bush's lead after being sworn in by Judge Lawrence Silverman of the Circuit Court of Appeals, Washington, D.C.

In his first address as defense secretary, Cheney said that "caution is in order despite those who want to declare the Cold War ended.

"Until we see a significantly lessened military capability on the part of the Soviets, we cannot possibly justify major reductions on our own," Cheney said.

Bush called for a "steady, moderate and affordable increase" in U.S. defense spending after 1990. And Cheney, declaring he is "ready and eager to serve," vowed to make "the hard choices" as to which programs are to be cut or funded.

Cheney appeared ready to move quickly. He informally tabbed close associates from the House to be his advisers at the Pentagon and he promised to meet major fast-approaching deadlines on budget and weapons decisions.

Most pressing will be the budget cutting decisions due before Congress the week of April 9. Under Bush's orders, Cheney must find $6 billion to cut from President Reagan's $315 billion defense budget for 1990.

A full strategic review due May 9 will include the choice between the rail-garrison basing mode for the 10-warhead MX and the single-warhead Midgetman, the direction of the Strategic Defense Initiative, and the future of the $500 million B-2 Stealth bomber. A study of Pentagon management is due the same day.