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U.S. Senate defense funding bill rejects some Pentagon cost-cutting

By David Alexander

WASHINGTON (Reuters) - U.S. senators gave initial approval on Tuesday to a bill that would provide $549.3 billion in defense spending next year but reject many Pentagon cost-cutting plans, such as retiring a fleet of planes and delaying modernization of a nuclear aircraft carrier.

The defense subcommittee of the Senate Appropriations Committee approved legislation that would provide the Pentagon with a $489.6 billion base budget in the 2015 fiscal year beginning in October, plus $59.7 billion for conflicts abroad.

The bill, which will be considered by the full committee on Thursday, must be approved by the full Senate and reconciled with a similar bill in the U.S. House of Representatives before going to President Barack Obama to be signed into law.

The version passed by the subcommittee includes $848.7 million for modernization of the aircraft carrier George Washington, $338 million to maintain the fleet of A-10 Warthog close air support aircraft and $1.3 billion to purchase 12 EA-18G Growler electronic attack aircraft.

The Pentagon's budget had proposed eliminating the entire fleet of A-10s, a low-flying, tank-killer aircraft popular among ground forces that is now approaching the end of its life.

The department had delayed a decision on the midlife overhaul of the George Washington because a looming round of deep budget cuts in 2016 could force it to scrap the carrier.

Boeing Co has warned that it needs to produce at least two FA-18s or EA-18s a month to keep its production line operating economically. Senate lawmakers approved funding for only 12 of the planes but also included $100 million to support the production line.

The panel proposed a 1 percent pay hike for military and civilian defense personnel, as requested by the Pentagon. The department is seeking to slow the rate of growth of military compensation, which now makes up nearly half its budget. The Senate decision conflicts with the House, which included a 1.8 percent pay increase for troops.

The Senate panel also approved $200 million to maintain operations at the base commissaries where many military personnel purchase their food until a comprehensive decision next year on compensation reform. The Pentagon had proposed reducing the subsidy for commissaries.

The Defense Department has been struggling to cut proposed spending by nearly $1 trillion over a decade as directed by Congress and the president.

The Pentagon has cut the size of military forces in an effort to achieve spending reductions required by the smaller budgets. Under a bipartisan deal among lawmakers, some of the cuts were eased in 2014 and 2015 while the Pentagon budget remained essentially flat.

But deeper reductions are due to return in the 2016 fiscal year unless Congress reaches an agreement to eliminate them.

Senior officials have warned that if the deeper reductions return, it will force them to seek more cuts of the type Congress has so far refused to accept.

(Reporting by David Alexander; Editing by Jonathan Oatis)

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