The Reagan Administration notified Congress it will exempt the military from personnel cuts under defense spending reductions required under the revised Gramm-Rudman balanced budget law. In a letter to House Speaker Jim Wright (D-Tex.), Budget Director James C. Miller III said the decision "is considered to be in the national interest . . . to defend our nation and to maintain the force levels required for our national security." Under Gramm-Rudman, federal spending would have to be cut by about $23 billion in fiscal 1988. The law says half of that amount would have to be absorbed by the Defense Department. However, a provision of the law gives the President the option of exempting military personnel accounts from the sequestration of funds required under the automatic budget cuts.