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CAPE CANAVERAL, Fla., Dec. 3--The Navy's mighty Vanguard rocket was reportedly ready tonight for a predawn shot that may hurl the first American "moon" into space.

"There were a few bugs in the rocket," said a high level source from the Office of Naval Research, "but I think we've ironed them out. It looks like we will be ready to blast off at 5 a.m."

If the firing is successful, the United States will have met Nikita Khrushchev's challenge to the free world to join Russia in forming a "commonwealth of Sputniks."

The 22,000-pound Vanguard contains a six-inch satellite with a radio voice which the Navy hopes to put into orbit at a speed of 18,000 miles an hour.

Defense Budget Increased

WASHINGTON, Dec. 3--The Eisenhower administration is planning to spend an extra 21/2 billion dollars next year on defense and foreign aid to meet the challenge of Russia's military-scientific advances, it was reported today.

Plans for a bigger Defense Department budget and increased spending by mutual security agencies were laid before 31 congressional leaders from both parties at a five-hour White House briefing.

French Battle Inflation

PARIS, Dec. 3--The French government opened its battle against inflation today, ordering broad price increases and setting up a powerful economic watchdog committee of three.

The price order is intended to adjust certain artificial prices after last August's partial devaluation of the franc. The new policy is being called "Operation Truth."

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