THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, February 4, 1995             TAG: 9502040288
SECTION: FRONT                    PAGE: A6   EDITION: FINAL 
SOURCE: ASSOCIATED PRESS 
DATELINE: WASHINGTON                         LENGTH: Medium:   60 lines

ARMY WOULD GET BIGGEST PART OF EXTRA DEFENSE CASH THE NAVY WOULD ALSO GET FUNDING FOR A THIRD SEAWOLF SUBMARINE.

The Army would get most of an extra $2 billion for defense under President Clinton's spending plan, but $1.5 billion is also set aside for a third Seawolf submarine, congressional and military officials said Friday.

After reports of eroding Army readiness and a long-term Army budget shortfall, the main cash infusion in the budget goes into beefing up accounts for day-to-day operations, training and maintenance in the Army's 10 combat divisions.

Congressional and military officials said Defense Secretary William Perry initially rejected the Army's $61 billion request and proposed a $56 billion budget.

But after Clinton announced in December that he would add $25 billion to his defense budget over five years - with the first $2 billion coming in fiscal 1996 - Perry agreed to provide the Army with nearly $59 billion.

The Clinton defense plan is due to be released Monday. The final version of the administration's defense spending goals for the next six years, a copy of which was obtained by The Associated Press, indicates that defense spending will continue to decline for the next two years before beginning a gradual climb.

For the 1996 fiscal year, beginning Oct. 1, the Pentagon budget - excluding about $11 billion for nuclear weapons that comes from the Energy Department's budget - will be $246.7 billion, down about 3 percent from $253.7 billion this year. The defense budget will drop further, to $243.5 billion, in fiscal 1997 under the Clinton plan.

Some Senate Republicans are lobbying to add $12.5 billion to Clinton's 1996 defense budget. That would eliminate Clinton's spending reduction and add enough to offset the effects of inflation. But such proposals are running into resistance even among Republicans who have traditionally favored greater defense spending.

Officials also indicate that Clinton's budget would trim spending on environmental cleanup at bases slated for closure and for certain defense conversion accounts.

The reduction in environmental cleanup is a response to Perry's recent statements that this year's base-closure round would be less severe than expected. But it also bows to political reality: Republicans have said they want to cut about $13 billion in so-called non-defense items from the Pentagon budget.

The measure also includes:

$1.5 billion for a third Seawolf nuclear-powered attack submarine.

The first installment in a six-year, $2.7 billion investment in a ``quality of life'' initiative to improve housing, pay and recreational facilities for soldiers and sailors.

Provisions to fully fund existing levels of training across all the services.

KEYWORDS: MILITARY DEFENSE SPENDING BUDGET by CNB