Aspin to Offer Defense Cutback Cushion Plan : Congress: His House panel proposes $1 billion to help military suppliers find new markets for technology.

The House Armed Services Committee has prepared a detailed proposal for providing $1 billion or more in federal aid to help offset the economic impact of the current cutback in defense spending, and is moving to bring it to the House floor within a few weeks.

The plan, the outlines of which were obtained by The Times, would boost financing for a dozen or so existing programs designed to help defense suppliers exploit new technology to create, produce and market new products.

It also would provide GI-Bill-style scholarships to help retrain retiring military and defense industry personnel for jobs in other high-technology industries. And it would step up aid for communities hard hit by defense cutbacks, providing them with help in diversifying their economies and in developing new markets for what they produce.

Rep. Les Aspin (D-Wis.), chairman of the armed services panel, is expected to offer the plan next month as a floor amendment to the defense authorization bill.

Congress already has authorized $1 billion for use in offsetting the economic impact of defense cutbacks, but so far has not specified how the money should be spent. The Aspin plan is the first such “reinvestment” plan to surface in either house of Congress.

At the same time, House strategists say they may seek to channel up to $3 billion more--this time for increases in domestic programs--through the defense bill.

The maneuver would be achieved by labeling proposed increases in spending for education, health care, aid to cities and the like as part of the defense “reinvestment” amendment, effectively placing the appropriation under the jurisdiction of Aspin’s panel.

In order to go forward, however, a House-Senate conference committee considering the congressional budget resolution must agree to defense spending levels higher than those approved earlier by the House. The strategy now being discussed by Democratic congressional leaders is based on expectations that the committee will split the difference between the House defense spending outlays and higher levels approved by the Senate.

If the compromise emerges as anticipated, it would enable the House to boost its defense budget by as much as $3 billion and designate that money for defense “reinvestment” programs. Although the 1990 budget accord bars Congress from using defense savings for domestic programs, it does not block transfers the other way.

It’s not definite yet whether the House Democratic leadership ultimately will decide to use the defense authorization bill in this way. The ploy is likely to draw vigorous opposition from President Bush, who is seeking to limit major increases in social spending.

Top congressional leaders are expected to begin discussing the reinvestment issue later this week in an effort to hammer out a firm strategy. Meanwhile, in the Senate, a special leadership-appointed task force headed by Sen. David H. Pryor (D-Ark.) is to unveil a similar set of recommendations on Thursday, with hopes of getting them to the Senate floor sometime in July.

The question of how to help cushion the nation’s defense industry in the face of sharp reductions in Pentagon spending has become a major issue in the defense debate this year. Many lawmakers who previously were for steeper cuts recently have had second thoughts.

One difficulty faced in drafting all such proposals is that there is no consensus on what kinds of defense-conversion programs, as they are known, work. Some that have been tried on a smaller scale have been only marginally successful.

Aspin’s plan is not the only House proposal being crafted to address the problem. A special House task force headed by Rep. Martin Frost (D-Tex.) also is assembling a proposal and is expected to present a report in June.

However, the Armed Services Committee plan is expected to emerge as the most likely to pass intact.

Aspin has said he hopes to structure the reinvestment program so that it requires no massive new bureaucratic structure to put into effect, yet can be expanded in coming years as the defense budget is drawn down even further.

The House Armed Services Committee is scheduled to hold a hearing on the issue this morning.