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

DATE: Friday, November 3, 1995               TAG: 9511030502
SECTION: FRONT                    PAGE: A1   EDITION: FINAL 
SOURCE: BY DALE EISMAN, STAFF WRITER 
DATELINE: WASHINGTON                         LENGTH: Medium:   67 lines

CONFLICT BUILDS OVER BUDGET, TAXES HAGGLING MAY ENDANGER PACT ON BUILDING SUBS

A legislative compromise to finance future submarine construction, including provisions that would keep Newport News Shipbuilding in the sub business, could collapse in the budget struggle between President Clinton and Republican lawmakers, U.S. Sen. Charles S. Robb warned Thursday.

The Virginia Democrat said the sub program will ``loom on the horizon as a potential target'' if Clinton makes good on hints that he will veto the overall defense spending package Republicans are expected to present next week. The GOP bill would add $7 billion to the defense program Clinton proposed for 1996.

The White House has termed the bill excessive, and the usually solid Republican majority in the House is far from united behind it. When the bill first came to the House floor last month, it was voted down by an unlikely coalition of GOP ``deficit hawks,'' abortion opponents and liberal Democrats.

The abortion opponents want the bill to prohibit abortion at U.S. military hospitals overseas; the new version expected on the floor next week is understood to address their concerns, but its ability to command a majority is far from assured.

And even if the bill passes, it surely will not command the two-thirds majority needed to override a Clinton veto.

Robb said he has ``not yet gotten a crisp answer'' from the administration on Clinton's intentions.

Robb argued that the $7 billion added by the GOP is warranted ``if we can get the priorities right'' on where the money is to be spent.

If the bill is vetoed, and the $7 billion must be cut, ``then the pressure becomes enormous'' to chop such ``big-ticket'' items as the sub program, Robb said. The bill provides about $1.5 billion for subs in 1996; that's actually $700 million less than the administration wanted to spend.

The sub compromise was devised last spring by a bipartisan group of senators led by Robb's Virginia colleague, Republican John W. Warner. It defused a bitter fight between Electric Boat of Groton, Conn., and Newport News, the nation's only nuclear sub builders.

The deal calls for Electric Boat to finish the third and last boat in the Seawolf class of subs and then build the first ship in a cheaper class beginning in 1998. Newport News, which builds aircraft carriers as well as subs, would be guaranteed the second sub in the new class, beginning in 1999, and the two yards would compete for contracts after that.

Loss of the Seawolf or the first ship in the new class could force Electric Boat out of business, eliminating more than 6,000 jobs. Newport News does not depend on sub work to survive, but yard officials have said that without it they will have to trim their work force.

Splitting the work leaves both yards working at far less than their capacity and adds to the cost of each sub - perhaps by hundreds of millions of dollars. The Navy argues that the extra expense is warranted as a hedge against a natural disaster that could wipe out one yard or the emergence of a new threat that would require more sub building.

But Robb suggested that, if Congress is pushed to cut $7 billion from defense, it might find that maintaining two sub-building yards is a luxury the country shouldn't have to bear.

Robb said the sub program, and particularly the last Seawolf, has become ``linked spiritually'' to the Air Force's B-2 bomber. House Republican leaders are insistent that the final defense budget include funds for additional B-2s; senators are demanding completion of the last Seawolf. by CNB