By David Alexander

WASHINGTON (Reuters) - The U.S. Congress approved an annual defense policy bill on Friday that authorizes American training for Iraqi and Syrian forces fighting Islamic State rebels and sets overall defense spending at $577 billion, including $64 billion for wars abroad.

The Senate passed the legislation 89-11 and sent it to President Barack Obama to sign into law. The House of Representatives last week endorsed the measure, which sets defense policy and authorizes spending levels for the 2015 fiscal year, which began on Oct. 1, but does not actually appropriate funding.

The bill approves a Pentagon base budget of $496 billion, in line with Obama's request, plus nearly $64 billion for conflicts abroad including the war in Afghanistan. It also authorizes $17.9 billion for Energy Department nuclear weapons work.

The measure formally endorses the Pentagon's plan to vet, train and equip a moderate Syrian opposition military force to fight Islamic State rebels, defend the Syrian people and promote conditions for a negotiated end to Syria's civil war.

The U.S. military program to train and assist Iraqi and Kurdish forces fighting Islamic State militants also was authorized.

The bill takes new steps to control personnel costs, which consume about half the Pentagon budget, essentially approving a year's worth of proposed long-term reforms but delaying further action until hearing in February from a congressionally appointed commission on military compensation.

The measure increases co-pays on most prescription drugs by $3, reduces the military housing allowance by 1 percentage point and remains silent on military pay hikes, thus allowing the Pentagon to implement a proposed 1 percent raise. In the past, Congress often approved pay raises above levels recommended by the Pentagon but did not do so this year.

The bill rejects a number of Pentagon efforts to retire or curtail weapons systems the department insists it can no longer afford to maintain because of budget cuts intended to trim projected defense spending by nearly $1 trillion over a decade.

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The measure bars retirement of the A-10 Warthog close air support plane, beloved by ground troops because of its ability to fly low and destroy enemy tanks. The Air Force wants to retire the fleet to cut costs and retrain maintenance personnel to work on the F-35 Joint Strike Fighter.

It also prohibits inactivation of the aircraft carrier USS George Washington, a step being studied for budgetary reasons, and authorizes funding to begin an overhaul and refueling of the ship.

(Editing by Will Dunham)