Thursday, February 25, 1999; 6:15 a.m. EST

WASHINGTON (AP) -- The chairman of the House Armed Services Committee says he sees ``smoke and mirrors'' when he looks at the Clinton administration's proposed fiscal 2000 defense budget and vows to add billions to the administration's $261 billion spending plan.

The remarks Wednesday by Rep. Floyd Spence, R-S.C., reflect, in part, Republican doubts about economic assumptions underlying the budget. The administration is counting on lower inflation and fuel costs to achieve about $3.8 billion of the proposed $12 billion increase in defense spending for the coming budget year. An additional $3.1 billion of the increase is derived from an accounting change for military construction.

``The president's budget is built on a troubling foundation of risky economic assumptions, cuts to other defense programs and gimmicks,'' Spence said at the outset of a committee hearing featuring testimony from the chiefs of the four armed services. He accused Clinton of playing a budgetary ``shell game.''

Defense Department spokesman Kenneth Bacon said in an interview later that the budget reflects actual savings from lower-than-expected inflation. ``These are legitimate savings,'' Bacon said. ``The fact that we have real savings means we have real money to spend on defense.''

Spence, however, accused the administration of overstating the actual spending increases it proposes.

``Even with the `smoke and mirrors,' the (Defense) department's own figures indicate that the fiscal year 2000 budget represents real spending decline,'' Spence said. He was referring to the proposed $261 billion spending total, which compares with $264 billion contained in the 1999 defense budget.

``We feel we need to do more than what is proposed by the administration,'' he said.

Spence asked each of the service chiefs how much more money he needs in 2000 beyond what the administration is proposing. Their responses added up to $8.7 billion.

© Copyright 1999 The Associated Press

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