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PRESIDENT Clinton has reluctantly signed a $268 billion (£167 billion) defence spending Bill that gives US military personnel their biggest pay rise for 18 years as he heads towards a final showdown with Congress over the budget.
Although clearly unhappy with what he called "budgetary gimmicks" in the Pentagon Bill, Mr Clinton said he was signing it because such crucial elements as the 4.8 per cent wage rise should not be allowed to fall victim to partisan wrangling.
At the same time, Mr Clinton vetoed a $37.7 billion spending Bill for the State, Justice and Commerce Departments because he said it contained the "wrong choices" and failed "to fund the 50,000 community police we need to keep crime going down".
The passage of the military spending Bill reduces the chances of budget deadlock, but the President is still at loggerheads with the Republican-controlled Congress over five of the 13 annual spending Bills. With Mr Clinton threatening further vetoes, another stopgap funding measure is expected this week to keep the federal Government operating.Temporary legislation, passed on October 1, to keep the Government running during the first weeks of the new federal fiscal year will expire on Friday.
The budget struggle is narrowing down to a set of key battlegrounds - education, the environment, police recruitment and foreign aid. Already Mr Clinton has vetoed a foreign aid Bill that failed to provide money for implementing the Wye peace accords in the Middle East.
Yesterday Republicans were considering a 1.4 per cent across-the-board spending cut, which would allow them to frame a budget without raiding social security reserves. Mr Clinton has attacked the broad-brush cut as a "terrible" idea that would lead to military job losses while damaging environmental and educational programmes.
One of the most sensitive issues is the $900 million debt owed by the US to the United Nations which could mean the loss of the US vote at the UN unless a compromise is reached. Republicans have stalled payment to bring pressure for anti-abortion requirements to be attached to US aid for family planning programmes overseas.
Attacking the State, Justice and Commerce Bill, Mr Clinton said that "by failing to provide for our obligations, including the UN dues and arrears, it imperils not only our vote in the United Nations but the ability . . . to maintain our national security".
The military spending Bill, $1 billion more than the 1999 budget, will curtail production of the F22 fighter, but it provides money for weapons purchases and for equipment depleted during the Kosovo conflict. As the President pointed out acidly, it also contains "pork barrel" measures benefiting the home districts of key members of Congress, most notably $375 million to build a helicopter carrier in Mississippi, home state of the Senate majority leader, Trent Lott.
The White House had spoken of vetoing the defence appropriations Bill, but it was unclear whether the President could have delivered the necessary Democratic votes to sustain a veto of a popular Bill. Rather than risk a split and leave Democrats open to charges of weakness on defence in the run-up to an election year, Mr Clinton agreed to sign. Not surprisingly, Republican leaders proclaimed the passing of the Pentagon Bill as a demonstration of the party's clout.