DATE: Saturday, September 20, 1997          TAG: 9709200315

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY DALE EISMAN, STAFF WRITER 

DATELINE: WASHINGTON                        LENGTH:   77 lines

HOUSE CLIPS CARRIER FUNDING SHIPYARD GETS JUST ENOUGH TO BEGIN - $50 MILLION NEWPORT NEWS ALSO WINS APPROVAL FOR JOINT SUBMARINE WORK.

Newport News Shipbuilding will be able to start work next year on the 10th and last aircraft carrier in the famed Nimitz class but it won't have enough cash to get very far into the job.

Congressional appropriators reached final agreement Friday on a 1998 defense budget bill that will provide only $50 million for the carrier, down from the $345 million the yard and Virginia's congressional delegation had hoped to secure.

Nevertheless, ``This is an important building block'' toward the $5 billion ship, said U.S. Sen. John W. Warner. He and other lawmakers said the action by House and Senate conferees, which probably will be ratified by both houses of Congress next week, is a strong signal that the massive ship will be built.

``This means that Congress has made a commitment to build CVN-77,'' agreed Jerri Fuller Dickseski, a shipyard spokeswoman. ``We are grateful for the support.''

The conferees also gave Newport News an important victory by approving a plan to permit the Peninsula yard to join forces with a rival firm in New England to build the first four ships in a new generation of attack submarines.

Newport News and Electric Boat, based in Groton, Conn., say they can save $700 million on the subs by dividing the work. Each yard will build different sections of each sub, joining them to complete the job.

The deal keeps Newport News, which earlier this year delivered its final Los Angeles class sub, the Cheyenne, in the sub business.

Despite the submarine victory, Warner could not hide his disappointment that more money couldn't be secured for the carrier. Largely at his urging, the Senate had agreed earlier in the summer to the full $345 million the yard requested.

The carrier project had less support in the House however, where influential Republicans made securing an appropriation to begin work on nine more B-2 bombers their top priority.

Sources suggested last week that the B-2s and the carrier had become coupled in the negotiations; in the end supporters of both had to settle for less than they wanted. The conferees reportedly added $157 million to the Clinton administration's budget request for the radar-evading bombers but refused to direct that it be spent on additional planes.

Clinton and the Air Force say the 20 B-2s now in service or on order will meet the nation's needs. The president had threatened to veto any defense bill that mandated additional B-2s; each of the bat-winged planes costs about $2 billion.

Warner and U.S. Sen. Charles S. Robb said word began circulating in the Senate Thursday night that the appropriations conferees had ``zeroed out'' the carrier, providing no money for the project.

``We went to general quarters,'' Robb said, with Republican Warner and Democrat Robb calling and buttonholing members of their respective party caucuses to revive the issue. Ultimately, Warner was granted a personal appearance before the conferees, who were meeting in closed session, and $50 million was restored to the bill.

U.S. Rep. Herbert H. Bateman, R-1st District, said the reduced carrier appropriation for 1998 probably means that lawmakers will have to spend a bit more when it comes time to make a final payment on the ship.

Though construction is not scheduled to begin in earnest until 2002, Newport News argued that a $345 million outlay next year would trim $600 million off the final cost of the carrier. The yard said the early money would allow it to avoid laying off some workers when their jobs on the carriers Harry S. Truman and Ronald Reagan are complete and would let it beat inflationary price increases on some components that will be needed later.

But if Congress provides more money in 1999, some of the ``smart buy'' savings the yard projected probably still can be realized, Bateman said.

Bateman added that he was optimistic about getting all the carrier money until mid-week, when it became apparent that there was a $5 billion gap between the cost of the programs the House wanted and those the Senate was willing to approve.

``In that context, we were lucky to have gotten even $50 million,'' he said. KEYWORDS: FUNDING

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