Congress Doles Out Cash for Defense Conversion

The approved defense budget for 1995 contains a $3.5 billion prescription for the post-Cold War blues

The slide in high-tech defense spending will be slowed only slightly by defense conversion programs being approved this year by Congress.

The 1995 defense budget will likely reach the administration's proposed level of $252 billion, which includes $3.5 billion to help compensate companies and communities for the defense cuts. The defense budget now being assembled in Congress also includes a variety of non-defense technology programs, including $183 million for high-performance computers and $298 million for environmental technology.

But the billions allocated to the defense conversion effort are still far outweighed by cutbacks in the Pentagon technology budget, said Carol Lessure, an analyst at the Washington-based Defense Budget Project. President Clinton's 1995 budget request asked for $79 billion for procurement, research and development, down from $120 billion allocated in 1990.

Although defense conversion funds will provide some government help for defense-technology companies, "it is really up to the defense industry to figure out its future," she said.

Versions of the 1995 spending plan have been marked up by the Senate and House Armed Services Committees and the House Appropriations Committee. The Senate Appropriations Committee is slated to mark up its defense spending plan late this month. The final shape of the defense spending plan will emerge once delegates from the Senate and the House meet to merge their committee proposals into a final defense authorization bill, which sets upper limits on how much can be spent on each defense program. Congress must also create a merged defense spending bill that allocates funds to each defense program.

Because the defense budget is large and complex, it is difficult to calculate the precise amount of money being allocated to defense conversion, Lessure said. At least $3.4 billion is allocated to the formal defense conversion account, but technology companies stand to gain from some of the funds allocated to environmental clean-up, medical sciences and sundry civil technology programs, she said. Such extra programs may add up to more than $1.3 billion in 1995, she said.

The administration asked for $3.4 billion for the formal defense conversion account, an increase of $100 million compared to 1994. The request incorporates $2.1 billion for dual-use technology efforts, which include the Technology Reinvestment Project. The balance of the $3.4 billion is allocated to train soldiers and civilians for commercial work, and also to offset economic losses suffered by communities when local military bases are closed.

In its 1994 defense authorization report, the Senate Armed Services Committee approved a request of $625 million for the Technology Reinvestment Project. The TRP is run by the Advanced Research Projects Agency, based in Arlington, Va., and is intended to help companies find commercial uses for defense technology. The committee's report was released June 14.

But the House Armed Services Committee's rival report allocated $771 million to the TRP program. The increase boosted the committee's overall defense conversion effort to $3.65 billion, which "helps ensure that the economic component of national defense stays strong," according to the committee's May 10 report.

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