House approves supplemental, but fate of deal in Senate is unclear

Congress took a major step toward completing work on a war supplemental spending bill when the House approved a package Thursday evening that includes nearly $162 billion for the wars in Iraq and Afghanistan, an increase in veterans' education benefits and a 13-week extension of unemployment insurance benefits.

The spending package is the product of an agreement finalized Wednesday between House Democratic and Republican leaders and the White House, which had threatened to veto previous versions.

"The [Bush] administration supports House passage of [the package] because it is consistent with the principles laid out by the president for an acceptable bill," OMB said in a Statement of Administration Policy.

The legislation consists of two amendments, which were approved in separate votes -- a move designed by Democratic leaders to allow members who oppose the war to vote against the troop funding, but vote for domestic funding.

"We had to find a way to let each and every member vote their convictions in a way that would not keep the House tied up in knots for the next six months," said House Appropriations Chairman David Obey, D-Wis.

The first amendment, approved on a 268-155 vote, includes $165.4 billion for the wars, which will cover the rest of fiscal 2008, which ends Sept. 30, and through the first part of fiscal 2009. That figure is reduced to $161.8 billion in the second amendment to provide $3.6 billion for other needs.

The second amendment -- which focuses more on initiatives not directly related to military operations and was approved on a 416-12 vote -- includes a boost in veterans' education benefits that can be transferred to spouses and children, but would not be offset.

The Blue Dog Coalition had asked House Democratic leaders to offset the cost of the increased veterans' benefits -- estimated at $62.8 billion over 11 years.

But House leaders dropped a plan to offset the cost with a tax on individuals with incomes above $500,000 a year or couples making over $1 million due to opposition from the White House and Republicans.

Rep. Allen Boyd, D-Fla., a leader of the Blue Dogs, opposed the rule for the legislation over the issue.

"We ought to be willing to find a way to pay for the things that are so important ... but what we have chosen to do is borrow the money ... and send the bill to future generations," Boyd said, adding that it would be economically and morally wrong to burden them with the debt.

Obey said the provision should be paid for, but he does not want to delay education benefits to veterans if agreement on an offset cannot be reached.

The second amendment includes a 13-week extension of unemployment benefits that is expected to cost $8.2 billion over 11 years.

The legislation would retain a requirement under current law that beneficiaries work at least 20 weeks to be eligible for benefits, which was kept in at the behest of Republicans. Democrats had initially sought to remove the requirement. Democrats dropped a proposal to provide another 13 weeks of unemployment insurance that would have been provided to states with high unemployment rates.

The supplemental also includes language to block implementation of six of seven White House-proposed regulations for Medicaid designed to curb fraud and abuse. It also would provide $2.65 billion for flood-ravaged communities in the Midwest and other disaster recovery.

Israel would get $170 million in aid for fiscal 2009 under the measure if Congress does not finish work on their appropriations bills by the end of the fiscal year.

The White House had requested a $170 million increase in aid and the legislation ensures that the funding would be there in the event that Congress is not able to finish its appropriations work in regular order.

The package goes to the Senate, which is expected to take it up early next week.

The House package dropped much of the domestic spending included in a Senate-passed version of the supplemental last month. The move has raised concerns in the House that the Senate might seek to add that funding to the package.

Senate Majority Leader Harry Reid, D-Nev., Thursday did not say whether he could get the bill through the chamber unchanged -- preserving the deal with White House.

"I am not a dictator over here," Reid said. "We'll just have to wait and see."

Democratic leaders in the House and Senate Thursday said there is need for another supplemental or stimulus package given recent natural disasters and the economic downturn.