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In February 1995 Perry asked for $ 246 billion for the Department of Defense for FY 1996.
This proposal became entangled in the controversy during 1995 over the House Republicans ' Contract with America, their efforts to spend more on defense than the administration wanted, and the continuing need for deficit reduction.
Perry cautioned Congress in September of the possibility that President Clinton would veto the FY 1996 Defense budget bill because Congress had added $ 7 billion in overall spending, mainly for weapon systems that the Defense Department did not want, and because of restrictions on contingency operations Congress had put in the bill.
Three months later he recommended that the president veto the bill.
When Congress and the administration finally settled on a budget compromise midway through FY 1996, DoD received $ 254. 4 billion TOA, slightly more than in FY 1995, but in terms of real growth a 2 % cut.

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