The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Saturday, January 20, 1996             TAG: 9601200273
SECTION: FRONT                    PAGE: A1   EDITION: FINAL 
SOURCE: BY DALE EISMAN, STAFF WRITER 
DATELINE: WASHINGTON                         LENGTH: Medium:   96 lines

DEFENSE SPENDING PLAN EMERGES: CONGRESSIONAL LEADERS SAVE DEAL DIVIDING SUB CONTRACTS

Congressional leaders agreed Friday on a 1996 defense spending plan, preserving a delicate deal to divide new Navy submarine construction between Newport News Shipbuilding and a competing shipyard in Connecticut.

But the new bill abandons a variety of controversial GOP defense initiatives, including provisions that would require deployment of a national missile defense system by 2003 and restrict the president's power to place American troops under United Nations control for peacekeeping missions.

Those provisions, along with a demand that the Pentagon seek specific congressional approval for funds to cover any troop deployment expected to cost more than $100 million, prompted President Clinton to veto the original version of the legislation last month.

Unable to override Clinton's veto, Republicans decided to strip the missile defense, troop assignment and deployment funding provisions from the new bill. That apparently won over the most prominent Democratic congressional opponent, Sen. Sam Nunn of Georgia, and Republicans expressed hope that Clinton will be satisfied.

``I'm confident now that this bill will become law,'' said Virginia Sen. John W. Warner, a key figure in forging the sub compromise.

``Talking with Defense Secretary (William) Perry, he thought he could recommend to the president that he sign the bill,'' said Rep. Floyd Spence, R-S.C., chairman of the House National Security Committee.

Republicans said they will draft a separate bill on missile defenses. In place of their original insistence that Clinton ask Congress for funding of future overseas deployments, they will send him a non-binding ``sense of Congress'' resolution urging him to adopt that policy.

The conferees made what were described as only minor and technical changes to a plan to direct sub contracts to Electric Boat of Groton, Conn., in 1998 and 2000 and to Newport News in 1999 and 2001. After that, the yards are to compete for the Navy's sub business.

The sub provisions are the product of months of tough bargaining by lawmakers from Virginia and New England, and expensive, high-profile lobbying campaigns by the two shipyards.

But they are a relatively non-controversial part of the $265 billion defense authorization bill. The legislation is a companion to a defense appropriations measure already in effect; the appropriations bill provided funds to the Pentagon while the authorization bill will set policies on how that money is spent. When Clinton approves an authorization bill, the Pentagon will be free to spend the money that already has been appropriated.

Other than the submarine provisions, which could protect thousands of jobs at Newport News Shipbuilding, the bill's most telling impact on Hampton Roads probably is a 2.4 percent raise in military pay and a 5.2 percent increase in housing allowances.

The House of Representatives is expected to vote on the new bill Wednesday; no vote has been scheduled in the Senate but Warner predicted action there soon after the House vote.

Warner and Rep. Herbert H. Bateman, a Newport News Republican who is a key ally of the Peninsula shipyard, said the bill's passage and approval by Clinton should help head off suggestions that the Defense Department push back the timetable for new sub procurement.

Perry raised that possibility in a conversation with Warner last week, saying 1999 is shaping up as a ``crunch year'' for the defense budget and suggesting that the sub work slated to begin at Newport News then might be delayed a year.

The Navy hopes to build about 30 subs in a new generation of attack subs that will begin with the 1998 contract to Electric Boat. The subs, expected to cost about $1.5 billion each, will be successors to the Los Angeles class subs now in service and the three Seawolf subs now being built by Electric Boat.

Congress is ending the Seawolf program after only three subs because of its high cost. Each of the Seawolfs will cost more than $2.5 billion. MEMO: OTHER HIGHLIGHTS OF DEFENSE BILL

2.4 percent pay increase for military members.

gfb]5.2 percent increase in military housing allowances.

Provides $493 million for possible future purchase of more B-2

bombers.

Bans most abortions at military hospitals overseas. Military women

stationed abroad had been able to obtain abortions, at their personal

expense, at U.S. military hospitals.

Establishes programs designed to stimulate private financing for the

construction and rehabilitation of military family housing.

Provides for construction of three new Arleigh Burke class

destroyers, one more than sought by the Navy for this year.

Provides $1.3 billion for a seventh and final helicopter-dock landing

ship. The Pentagon was not scheduled to seek funds for this ship until

2001.

Orders a 25 percent cut, over five years, in the staff of the

secretary of defense.

Provides for the discharge of military members infected with the AIDS

virus but allows them to continue to receive medical care at military

facilities.

KEYWORDS: MILITARY BUDGET by CNB