By David Morgan

WASHINGTON (Reuters) -- Despite public outrage over deadly auto defects including faulty ignition switches and air bags inflators, the U.S. House of Representatives on Thursday voted to slash proposed spending increases for vehicle safety including defect investigations.

In a Republican amendment to the House transportation funding bill, lawmakers scaled back spending for the fiscally embattled National Highway Traffic Safety Administration by one-fifth to one-third from funding levels sought by the Obama administration and approved by the Senate last July.

The lawmakers voted by an overwhelming margin to adopt the measure, which will now be subject to negotiations between lawmakers from both chambers.

A House Republican aide said the lower spending targets would provide NHTSA with adequate resources to fulfill its regulatory mission.

The federal agency charged with investigating safety defects and ordering recalls, NHTSA has been widely criticized in recent years for being slow to act against defective products including General Motors Co ignition switches and Takata Corp air bag inflators. The ignition switches alone have been linked to 124 deaths and 275 injuries.

NHTSA has adopted a more aggressive enforcement posture this year under administrator Mark Rosekind, who took unprecedented action this week to accelerate the Takata recall. But lawmakers have been unwilling to provide more money for the agency to hire staff and modernize its computer systems, until NHTSA implements reforms.

Rosekind has pledged to complete the reforms by next June and said congressional failure to address his agency's resource and authority gaps amounts to a safety risk. Funding for safety defect investigations has been unchanged for several years.

Last summer, the Senate approved its own multi-year transportation bill, which would increase vehicle safety funding by $46.3 million or about one-third in 2016 and by $76.7 million or more than 50 percent by 2021.

U.S. Transportation Secretary Anthony Foxx proposed the same spending levels as necessary to ensure NHTSA's turnaround.

Thursday's House bill cuts those targets by $15 million a year and holds the overall increase for vehicle safety to 40 percent by 2021, under an amendment from Representative Michael Burgess, a Texas Republican who chairs the House Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade.

The Burgess panel is also considering draft legislation that would award automakers credits against fuel economy standards and give the auto industry greater control over the public disclosure of safety recalls.