NIANTIC, Conn. — It was 6:59 a.m. and Arthur Cole, 17, was due in formation in front of his National Guard barracks at 0700 hours. The prospects were not good. Arthur couldn’t find his regulation shoes (he was wearing sandals) and he couldn’t find his Guard-issued pants (his bermudas were hanging so low his underwear was identifiable).

“Let’s go!” barked his platoon leader, Vincent Lafontan, a former marine who was inspecting bunks. “Suck it up! Tighten up your racks!”

Arthur, a former drug dealer from New Haven, was not accustomed to his new hours. Until recently, he would go to sleep at 6 a.m.

In front of the barracks, at attention, stood 120 teen-agers from all over the state. They have one thing in common: All are high school dropouts who have signed up voluntarily for a new national program, financed by the federal government and run by state National Guard units on military bases, that is aimed at getting troubled civilian youths high school equivalency diplomas. If these dropouts succeed in the five-month program, they will get a $2,200 stipend from the government as a financial reward.

The young people have been told the program is of great importance to President Clinton, and on this, the official opening day for the first of 10 National Guard Youth Corps camps throughout America, they have been warned, “Look sharp: the president’s men are coming to see us.”

Of course, like any new marriage, this wedding of the military and these dropouts still have a few rough spots. “Oh man, we got to wear these hats?” said Arthur, finally reaching his platoon. He did 10 pushups for being late, then fell into formation.

Arthur is an orphan and was eager to enroll here, because he hopes to earn a degree and find a decent job so he can get his younger brother, Tai, out of foster care.

What is beginning here may soon become widespread because its appeal cuts across the political spectrum while addressing two of the nation’s most pressing domestic questions: What to do with the military in the post-Cold War era? And how to expand social service programs in a time of budget constraints?

The National Guard’s Youth Corps Challenge program, which will operate in 10 states this year, is a case of guns as well as butter. It relies heavily on current and former military personnel to tutor, counsel and discipline the dropouts in preparation for their taking the test for a general equivalency diploma, or GED. This will not be an easy task. The average reading level of the Connecticut group is the sixth grade; 74 percent did not complete their junior year of high school; nearly a third were expelled from school.

Among the program’s supporters are Gov. Jim Edgar of Illinois, a Republican, who will open the project in that state on Sept. 1 at a recently closed military base, and Sen. Sam Nunn of Georgia, a Democrat who is chairman of the Armed Services Committee. In Connecticut, Gov. Lowell P. Weicker Jr., an independent, has enthusiastically endorsed the program.

It is also signals the new president’s priorities. Congress approved the program in 1992 but President George Bush did not propose any financing for it; Clinton signed a $44 million appropriation on June 11. Besides Connecticut and Illinois, youth corps camps will train a total of 2,500 dropouts the first year in Arizona, Arkansas, Georgia, Louisiana, Maryland, New York (Camp Smith in Peekskill), Oklahoma and West Virginia.

To supporters, the new youth corps is reminiscent of Franklin D. Roosevelt’s New Deal and the belief that government can be used creatively to put people back to work. Clinton aides say that while the program predates the president’s national service program, it fits well with that strategy. And it has caught the public’s imagination. In Illinois there were 1,000 calls to the National Guard’s toll-free number in the program’s first 24 hours.

The 10 pilot projects are being watched closely by military officials worried about budget cuts and ways to ease the transition of soldiers into a civilian economy.

“To put it undelicately, this is a way for the National Guard to create a role for itself in the 21st century,” said Beth Solomon, an aide to Nunn. “It’s a post-Cold War response.”

The corps is the brainchild of Dan Donohue, the National Guard public relations director in Washington. Press releases emphasize “a peacetime domestic return to the American people on their investment in defense.”

About half of the Connecticut staff is on active National Guard duty or has served in the military. Lafontan, the platoon leader, whose job is a mix of counselor and barracks supervisor, spent four years in the Marines and is now a civilian with two bachelor’s degrees. Tim Coon, who like all the classroom teachers is state certified, has taught in public high schools and is a lieutenant in the Army Reserve.

There are seven hours of classes a day, covering the academic areas tested for the GED, drug and alcohol counseling, and job-readiness skills.

Financing is generous — more typical of a military than a social welfare program — and there were large numbers of applicants for the 46 staff jobs here. Lafontan and Coon will each be paid more than $30,000 a year. The spending per student is $18,000.

“Anybody who’s anybody wanted this job,” says Sgt. Daniel Henderson, a platoon leader who was the state’s National Guard Soldier of the Year in 1991.

The dropouts are outfitted from head (red baseball caps) to toe (Adidas sneakers), get a $15 weekly allowance, books and briefcases. While they march in cadence and usually call superiors “sir,” they would never be mistaken for regular military.

Lamonte Brockenberry’s corn rows pop out of from the sides of his cap; Ramonita Arroyo’s ponytail hangs out of a hole in the back of hers. Donald Bunn, a squad leader who barks orders at his fellow dropouts, wears a hoop earring in his left ear and a red stud in his right. On his way to class, Bunn, as he is known to his friends, spotted a Guard officer and shouted, “How you doing, colonel?”