House, Senate conferees approve $355B Defense spending bill

Hitting spending levels not seen since the height of the Reagan military buildup in the mid-1980s, House and Senate conferees approved a $355.1 billion defense appropriations bill Wednesday for fiscal 2003.

The total is $37.5 billion above defense spending in fiscal 2002 but $1.6 billion below what President Bush wanted. The conference report does not include a $10 billion contingency fund that President Bush had requested.

Conference leaders struck the deal after defeating a Senate bid to add $300 million for the Coast Guard. "I would be very happy to give it to them, but I don't have it," said House Appropriations Committee Chairman Bill Young, R-Fla.

During a closed-door session Wednesday morning, House conferees quickly voted down another Senate provision barring awards of defense contracts to companies that move offshore to avoid U.S. taxes. The defeat of the provision outraged the House panel's ranking Democrat, Rep. David Obey of Wisconsin.

"I find it offensive as hell," Obey thundered after the measure went down in an 11-4 vote. "It's a $4 billion loss to the treasury." Obey said he drew his estimate of lost tax revenue was drawn from the Congressional Budget Office.

The conference adjourned just after noon with only one issue dividing negotiators: The plan by Sen. Ted Stevens, R-Alaska, to add $300 million for the Coast Guard. The conference resumed informally late in the day as the defense appropriations subcommittee chairmen and ranking members met, rejecting Stevens' plan and clearing the way for a deal on the spending bill (H.R. 5010). In the end, which House conferees moved toward the higher numbers in the Senate bill, adding nearly $600 million, Young said.

The deal splits the difference between House and Senate versions, funding 46 Navy F/A-18 E/F Hornet fighters at $3.2 billion. That's $120 million and two aircraft over the administration's request.

Conferees backed Defense Secretary Donald Rumsfeld's decision to terminate the Army's $11 billion Crusader howitzer program. But they funded ballistic missile defense at $7.4 billion, $43 million below the administration's request. The report provides about $9 billion for shipbuilding, a net increase of $842 million over the Bush request. This includes $2.3 billion for two DDG-51 Aegis destroyers.

The total Department of Defense procurement is set at $71.6 billion, $10.7 billion over fiscal year 2002; research, development, test and evaluation gets $58.6 billion, $9.9 billion over fiscal 2002. Operations and maintenance accounts, which fund flying and training as well as spare parts and maintenance, are funded at $114.8 billion, $9.7 billion over fiscal 2002. And the Pentagon receives $93.6 billion to spend on military personnel, supporting 1.4 million active-duty personnel and 864, 558 guard and reserve personnel.

Budget highlights:

• $270 million for 19 Army UH-60 Blackhawk helicopters, $116 million and seven aircraft more than the Bush request.
• $4 billion for 23 Air Force F-22 fighters, same as the Bush request.
• $3.5 billion for continued development of the multi-service Joint Strike Fighter.
• $3.3 billion for 15 C-17 transport aircraft, an addition of $586 million to the budget request, to fully fund the fiscal year 2003 acquisition costs instead of the incremental funding proposed by the Air Force.
• $7.4 billion for ballistic missile defense fully funds major programs such as the Ground-based Midcourse Segment/Pacific Test Bed, and the Airborne Laser.
• $672 million to Patriot PAC-3, a net addition of $50 million to the budget request, and $136 million to the Arrow, a joint U.S.-Israel missile defense program, $70 million more than the administration request.
• $9 billion for shipbuilding, including $1.5 billion for one Virginia-class attack submarine.
• $645 million for continued conversion of four Trident submarines from ballistic missile subs to cruise missile attack subs.
• $160 million over the administration request for the CVNX next generation aircraft carrier. The Bush budget would have delayed the construction start from 2006 to 2007; the additional funds are aimed at getting them built sooner.
• $1.3 billion to buy down costs associated with prior year shipbuilding, an addition of $635 million over the administration request. This includes $311 million for costs associated with the swap among shipyards of the DDG-51 destroyer and LPD-17 amphibious ship contracts.
• $1.25 billion for Army ammunition, $94 million above the budget request.
• $249 for Navy Tomahawk missiles.
• $770 million for Navy/Air Force Joint Direct Attack Munition precision-guided bomb kits.
• $14.8 billion for defense health programs.
• $1.49 billion for chemical demilitarization.