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WHITE HOUSE CAUGHT IN BATTLE OVER $30 BILLION IN MILITARY RAISES

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The Clinton administration is embroiled in a debate over whether the government should invest nearly $30 billion in military pay raises over the next five years.

On one side is Defense Secretary William Perry, who not only wants the raise for purposes of morale and military readiness but insists that the extra cost should not come out of other portions of the Pentagon budget.Arrayed against Perry are White House staffers and budget officials who view the proposal as a raid on President Clinton's cherished domestic priorities.

Accepting Perry's proposal threatens Clinton's agenda of deficit reduction but offers the president an opportunity to shore up his reputation with the military.

"It is the single biggest-dollar issue we're going to face," said an administration official familiar with the debate.

Under Perry's plan, military and civilian Defense Department employees would get a raise pegged to the increase in the cost of living in each of the next five years. The proposal comes after two years in which Clinton proposed no raise or a raise below the cost-of-living increase, only to see Congress approve the full pay increases for the military.

"This is the dilemma," said the official, who spoke on condition of anonymity. "Since Congress is putting the raise in anyway, instead of getting a black eye from the military he ought to just put the pay raise in."

But unless Clinton slashes other programs, the military pay raise could make it difficult for him to submit a budget below previously established spending caps.