SENIOR PENTAGON OFFICIAL SAYS NO PAY CUT

But the details are fuzzy..."other compensation powers", "incentive and other measures".

Stay tuned...we'll try to follow this one all the way.

Undersecretary of Defense David Chu answered sharp criticism from Democratic presidential candidates over a press report that the Pentagon favored cutting the pay of combat troops in Iraq and Afghanistan because it supported letting the special increases expire.

"No one ever said we wanted to reduce pay in Iraq and Afghanistan," Chu, who is in charge of military personnel and readiness, told reporters.

"We prefer other compensation powers to ensure that we target benefits on the troops serving in Iraq and Afghanistan," he added, citing incentive and other packages that the Pentagon is authorized to use...

But Chu and Defense Department spokesman Lawrence Di Rita said the Pentagon planned all along to use incentive and other measures to keep paychecks in Afghanistan and Iraq at current levels, even if danger and family separation pay went down.

"There is no intention of allowing compensation for those serving in Iraq and Afghanistan to fall," Chu said.

"The premise that we would somehow disadvantage U.S. forces in combat is absurd," added Di Rita.

They said that the pay of troops serving in Kuwait near Iraq was also unlikely to change.

Meanwhile, a White House spokesman has this to say.

"We support extending the pay provisions," White House spokesman Jimmy Orr said late Thursday afternoon after a day in which Bush's political opponents bashed him for what they said was a callous attitude toward combat troops who are still suffering casualties.

"We intend to ensure they continue to receive this compensation at least at the current levels," the Defense Department said in a separate statement about members of the Army, Air Force, Navy and Marines.

The issue stems from congressional action April when the House and Senate increased the imminent danger pay for the first time in more than a decade to $225 a month from $150. The family allowance was raised from $100 to $250 monthly.

However, the increases, which were retroactive to last October, are set to expire on Sept. 30, the end of the current fiscal year, unless Congress and the president continue them.

Last month, the Pentagon sent Congress an interim budget report detailing requests for spending cuts. It said the Defense Department supported rolling back the increases, which it said would cost more than $25 million a month to continue. It said that in addition to supporting a pay rollback, Pentagon experts would launch a study of the entire issue of combat pay.