Clinton Accepts Defense Spending Bill With Misgivings : Budget: President will allow measure to become law because of its funds for Bosnia mission. He objected to other outlays in the legislation.

President Clinton backed down late Thursday from a veto threat and accepted a Republican-crafted defense appropriations measure because the bill provides funding for deployment of U.S. troops in Bosnia.

Traveling in Europe, Clinton decided not to risk a major fight with congressional Republicans over funding for the Bosnia peacekeeping mission. He has promised that 20,000 American troops will join in a 60,000-strong North Atlantic Treaty Organization force, a pledge that many congressional Republicans have opposed.

The defense bill was the latest card in the marathon budget contest that has played out in Washington since late summer. Typical of that struggle, the measure was caught up in such larger issues as U.S. foreign policy and a long-term plan to balance the federal budget.

The defense measure will fund Pentagon operations for fiscal 1996. Clinton had opposed the bill because it allocated more money for weapons programs than the White House believed was necessary.

But in a statement issued by the White House late Thursday, Clinton said that he decided to allow the bill to become law without signing it because the Administration had reached agreement with Republican leaders in Congress that money in the bill could be used to pay for deployment of U.S. troops in Bosnia. The statement was issued just before the deadline for Clinton to act on the bill--or let it become law without his signature.

“The pressing demands of peace and of our military servicemen and women compel my approval of this measure,” Clinton said.

Clinton had hoped to use his support of the defense bill to extract concessions from Republicans on other budget issues but GOP leaders rejected those efforts earlier Thursday. The White House had wanted to shift several billion dollars from defense to some of Clinton’s domestic priorities.

In turning down the White House proposal, Republican leaders said that Clinton would have to agree first to their broader plan to balance the budget in seven years.

“You can’t divorce the two” issues of fiscal 1996 spending and the long-term budget plan, House Speaker Newt Gingrich (R-Ga.) said. “It’s all the budget.”

Clinton said in his statement Thursday night that the Administration would continue discussions over the six remaining 1996 appropriations bills. “We should promptly complete this task, so there is no unnecessary shutdown of the government,” he said.

The $243-billion defense appropriations measure includes about $7 billion more than Clinton had wanted for the Pentagon. It contains $493 million to start production of two additional B-2 Stealth bombers, part of a down-payment for what Northrop Grumman hopes will eventually be a $15-billion program to produce an additional 20 aircraft.

“I have expressed my strong concerns that this legislation contains excessive spending for projects that are not currently needed for our defense,” Clinton said. “I will forward to Congress rescission legislation that would eliminate funding for those projects, and I urge Congress to act on it. We should spend no more than we need to at a time when we are determined to balance the budget.”

As of Thursday, seven of the 13 appropriations bills needed to finance the government in the current budget year, which began Oct. 1, had been signed into law. Much of the government is being funded under a stopgap measure that expires Dec. 15.

Administration officials had negotiated with appropriations committee leaders earlier this week in an attempt to wrest concessions from them on the fiscal 1996 budget in exchange for Clinton’s support of the defense measure.

The Administration had sought assurances of GOP support for the troop deployment and asked for an additional $8 billion for programs in other stalled appropriations bills, including Clinton’s signature domestic policy initiatives: his national service program, education reform, technology development and his program to put additional police officers on the country’s streets.

Republicans offered to restore $4 billion of the $8 billion but the Administration turned that proposal down.

The GOP is divided on whether to compromise on the remaining six appropriations bills. Many House Republicans have argued that reaching agreement on the appropriations bills would undercut what little leverage they have to win Administration agreement on balancing the budget in seven years.

But other Republicans were eager to reach agreement on appropriations bills--even in the absence of a broader budget agreement--to nail down the substantial spending cuts included in those bills.

White House and congressional negotiators have been meeting in the Capitol all week on the seven-year budget-balancing plan. The talks broke up acrimoniously Thursday and likely will not reconvene until Monday.

Republicans complained that the Administration had not offered a solid alternative to the GOP budget plan.

“We’re going nowhere fast,” said House Budget Committee Chairman John R. Kasich (R-Ohio).

Administration officials countered that it was Republicans who were stalling because they refused to discuss policy issues that had been on the agenda.

“These guys aren’t ready to negotiate,” said a senior Administration official. “They had a strategy to come in today and blow it up.”

“It understates it to suggest that this is off to a rocky start,” said Sen. Byron Dorgan (D-N.D.).

The current long-term budget plan approved by Congress faces a certain veto by Clinton after he returns from Europe on Sunday.

Times staff writers Paul Richter, Elizabeth Shogren and Ralph Vartabedian contributed to this story.