UPDATE 1- Congress heads toward showdown over 2015 defense priorities

Thu May 22, 2014 8:06pm EDT

(Recasts with Senate panel finalizing its version of bill)

By David Alexander

WASHINGTON May 22 (Reuters) - Lawmakers in Congress headed toward a showdown over Pentagon spending on Thursday after the House and Senate advanced competing versions of the annual defense policy bill that differ on everything from spending priorities to closing Guantanamo.

The House of Representatives voted 325-98 to pass a 2015 National Defense Authorization Act that rejected the Pentagon's bid to cut long-term costs by reducing military pay raises and eliminating planes, ships and bases.

Hours later the Senate Armed Services Committee unveiled its version of the same legislation, approving a Pentagon proposal to offer smaller military pay hikes, lay up 11 Navy cruisers for long-term maintenance and reorganize the Army helicopter fleet.

The Senate and House plans differed on how to pay for proposed changes to the Pentagon budget, with the House reducing funds for keeping the military combat-ready while the Senate panel sought to avoid that.

"We didn't fund programs by cutting into readiness, as requested by the Department of Defense," Senator Carl Levin, the committee chairman, told a news conference.

The Senate measure included a ground-breaking provision authorizing the defense secretary to transfer Guantanamo detainees to the United States once the president provided Congress with a plan subject to stringent security and legal measures. The House rejected a similar Guantanamo effort.

Levin said the proposal would give Congress the opportunity to vote on and reject the president's plan. He said the Senate was offering a "path forward" toward closing Guantanamo, an issue that has long divided Americans.

The House and Senate bills agree on several issues. Both rejected the Pentagon's proposal to retire the entire fleet of A-10 Warthog close air support planes. The House paid for keeping the A-10 with several hundred million dollars from the $79.4 billion Afghanistan war funding account it approved.

The Senate did not authorize any funds for the Afghanistan war because of uncertainty over the future U.S. role there after the end of the year. Afghanistan has yet to approve a bilateral security deal that would allow U.S. troops to remain. The Senate found other funding to keep the A-10 flying for another year.

Both chambers also supported continued purchases of Boeing's EA-18G "Growler" electronic warfare plane. The House authorized five more planes than the Pentagon sought, but neither chamber found the funds for the full 21 needed to keep the assembly line running.

The Senate and House measures both authorize a Pentagon base budget of $496 billion plus another $17.6 billion for nuclear weapons work in the Department of Energy, figures in line with the president's proposed 2015 budget.

Once the Senate passes a final version of its bill, the two competing measures will have to be reconciled and approved by both houses before being sent to the president for his signature.

(Editing by Gunna Dickson and Tom Brown)