Lawmakers clash over budget priorities in U.S. defense bill

By David Alexander WASHINGTON (Reuters) - Lawmakers in the U.S. House of Representatives clashed over spending priorities in the annual defense policy bill on Tuesday, with a top Republican saying the measure prevented "false short-term savings" and a key Democrat warning about "creative accounting." The legislation, which the full House began debating on Tuesday night, calls for a Pentagon base budget of $496 billion for the 2015 fiscal year beginning in October, about the same as this year. The National Defense Authorization Act also approves $17.6 billion for nuclear weapons spending and $79.4 billion for the Afghanistan war. But the House Armed Services Committee rejected the Pentagon's long-term plans for cutting costs to meet a congressional mandate to reduce spending by nearly $1 trillion over a decade. The Pentagon had sought reforms that hit military compensation and popular weapons systems, difficult for lawmakers to approve in an election year. The proposals included: - A lower-than-expected 1 percent increase in military pay for most uniformed personnel; - Retirement of the fleet of popular A-10 Warthog close air support aircraft; - Retirement of the U-2 spy plane; - Placement of 11 Navy cruisers in long-term, phased modernization; - Reduction of the subsidy for base commissaries where military personnel shop by $1 billion over three years. The House Armed Services Committee blocked those proposals and offered a 1.8 percent pay hike for most military personnel. The White House estimated the compensation changes alone cut $31 billion in planned savings over five years. "In this era of declining resources, the committee was faced with difficult choices," said Representative Buck McKeon, the Republican chairman of the Armed Services Committee. "The legislation guards against achieving false short-term savings at the expense of vital long-term strategic capabilities," he said, noting that it supported refueling an aircraft carrier the Pentagon considered decommissioning. But Representative Adam Smith, the panel's top Democrat, warned that "the problem with this bill is that it rejects every one of those proposals" to reduce long-term spending. "And how do we make the money work on that? Primarily by creative accounting," he said. Smith said the decisions by the House panel required about $1.8 billion in offsetting cuts to Pentagon accounts that support military readiness. Critics have said the House legislation upsets the Pentagon's attempt to improve readiness by increasing spending for training and maintenance, two areas hit hard by cuts last year. Instead, they said, the panel focused on restoring spending on hardware to help their voters back home. Gordon Adams, an American University professor who worked on defense budgets in the Clinton administration, said the House measure "in my judgment puts pork and hardware over readiness." "The administration had asked for the U-2 to be put to bed and to keep buying unmanned aerial vehicles in place of it. Committee said, 'No way.' The administration asked for a base closure round. Committee said, 'No way,'" Adams told reporters. "So this is kind of the 'no way' committee." (Reporting by David Alexander; Editing by Lisa Shumaker)