Crossing swords over defense budget. Congressional panel must close gap on several issues

Chemical weapons. Punishment of spies. Defense contractor overhead charges, and use of United States forces in Nicaragua. These and other controversial national-security issues will soon come to a head in Congress. Sometime this month, the House and Senate will get together and hammer out the final 1986 defense authorization bill, which outlines military programs.

The Senate finished its version of the authorization bill on June 5. At $302 billion, the Senate legislation would allow the Pentagon a budget increase equal to the projected inflation rate.

The House approved a defense bill late last week that essentially freezes military spending at current levels.

Overall, the House bill has a somewhat split personality. At $292 billion, it doesn't give the Pentagon a raise. But it does approve resumption of chemical weapons production, with certain restrictions. It contains a provision intended to bar United States military action in Nicaragua that is riddled with loopholes.

The House measure would allow the Pentagon to give more polygraph tests to its employees and would permit military courts to sentence peacetime spies to death. Without the revelations of the Walker spy case, several observers say, the Democratic-controlled House might not have approved such broad anti-espionage moves.

After Congress returns from its Independence Day recess, a conference committee will meet to iron out the differences between the House and Senate defense measures. Among the likely points of conflict:

Chemical weapons. The Reagan administration has been trying for years to get congressional approval for a modernization of US chemical munition stocks.

For 1986, the Senate, as in the past, is amenable to production of new ``binary'' chemical weapons, which don't become lethal until two substances are mixed. The House, for the first time, has also agreed to production of these weapons -- but only if NATO nations ask for them.

For domestic political reasons, Western Europe isn't about to make that request. But this restriction may well be stripped by the House-Senate conference.

Procurement reform. With defense contractor horror stories now a news staple, everyone in Congress is rushing to tinker with the Pentagon's procurement process. The House, however, wants to make more sweeping changes than the Senate.

The House, for instance, would levy criminal penalties on contractors who knowingly submit unallowable overhead costs to the US for reimbursement. The Senate feels such abuse is covered by existing law.

Under the House bill, Pentagon employees would have to wait two years, after leaving the government, before they could work for defense companies whose contracts they oversaw. The Senate provision on this ``revolving door'' problem is less strict.

Both chambers would prod the Pentagon to let more contracts competitively, and determine beforehand what new weapons systems should cost.

Nicaragua. The House provision on limiting use of US combat troops in Nicaragua would technically not really hamper the President, admitted the measure's sponsor, Rep. Tim Foley (D) of Washington, last week. The GOP-controlled Senate, however, rejected a similar measure last month.

Espionage. The tough House anti-espionage provisions have no real counterparts in the Senate authorization bill, which was passed before allegations of the Walker spy ring were fully revealed. But Senate leaders are now working on follow-up spy legislation.

Antisatellite weapons. The House would not permit planned US tests of antisatellite weapons in space, unless the USSR proceeds with such experiments first. The Senate, on the other hand, would permit three such tests.

Strategic Defense Initiative. The Reagan administration wanted $3.7 billion in fiscal 1986 for research on defense against strategic missiles. The Senate cut that request to $3 billion, and the House wants to slash it even further, to $2.5 billion.

MX missile. Debate over the MX has dragged on for so long that it now has a perfunctory quality, congressional observers say. This year, the Senate has voted to cap MX deployment at 50. The House, however, voted for 40 missiles.

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