House vote backs loans as Iraq bill confronts new woes

House Republicans downplayed the significance of Tuesday's 277-139 vote to instruct conferees on the $87 billion, fiscal 2004 Iraq supplemental to back a Senate-approved loan provision. But other items in the motion dealing with veterans' issues could prove more nettlesome as GOP leaders try to wrap up the conference next week.

"The hardest issues to resolve will not be Iraq-related," a GOP leadership aide said.

The motion to instruct, as written by House Appropriations ranking member David Obey, D-Wis., contains instructions to conferees to accept Senate provisions adding $1.3 billion for veterans' health care and extending reservist benefits-both of which are "strongly opposed" by the White House, as OMB Director Josh Bolten reiterated Tuesday in a letter to appropriators. The letter also contained a veto threat if the conferees accept the Senate loan provision, which would require $10 billion in Iraq reconstruction aid-almost half the total in the bill-to be a loan if other nations do not forgive Iraq's pre-war debt.

Sen. Lindsey Graham, R-S.C., one of eight Senate Republicans who voted for the loan provision, said Tuesday's vote sent a strong signal. "We all understand Iraqi reconstruction is necessary as soon as possible, but it's clear to me that both a majority of the House and Senate have serious concerns about a $20 billion grant," Graham said.

Senate Minority Leader Tom Daschle, D-S.D., said the veto threat could delay final passage and contradicts the administration's stated urgency to approve the supplemental "because our troops in the field greatly needed the resources."

While Tuesday's vote will not affect the supplemental conference outcome, House Minority Leader Nancy Pelosi, D-Calif., called the motion "a full-blown rebuff to the administration" that "reflects discontent and unease among Republicans."

Obey said it proves President Bush "needs to learn to work with others. Congress is not a tinker-toy advisory society." Daschle and other Senate Democrats also are urging conferees to back the veterans' provisions.

Obey's move to include Senate provisions favorable to veterans made it easier for the 84 Republicans who voted for the motion.

"This was not on the issue of loans. Mr. Obey included some very attractive issues involving the military and veterans, House Appropriations Chairman C.W. (Bill) Young said. "It was purely a symbolic vote, not binding whatsoever. I didn't want to put members on the spot."

Senate VA-HUD Appropriations Subcommittee Chairman Christopher (Kit) Bond, R-Mo., and ranking member Barbara Mikulski, D-Md., added the $1.3 billion to the supplemental to be funded out of unspent fiscal 2003 funds. They included another $1.7 billion increase for veterans' health care as "emergency spending" on the Senate's fiscal 2004, VA-HUD measure, which will head to conference next week as part of a six-bill omnibus spending package.

That provision has led to concerns about exceeding budget caps and is likely to come out in conference on the omnibus if the supplemental provision is accepted instead.

"The thing that put this over the top was VA health care," a spokesman for House Speaker Dennis Hastert, R-Ill., said of the motion to instruct, adding House GOP leaders did not whip against it. "A lot of our members felt they had to be on the right side of that issue. To say this is a snubbing of the White House is false. At the end of the day, the loan provision won't be in there."

But GOP leaders will be hard-pressed to strip the veterans' provisions in conference, particularly the $1.3 billion. Veterans groups argued they were betrayed on the House fiscal 2004, VA-HUD bill, after funding included in the budget resolution was dropped from the eventual spending bill. Some GOP aides are predicting the $1.3 billion, and possibly some extended benefits for reservists, will be included in the supplemental, although they note the VA-HUD funds are still in play.

"We think the House leadership will now see the light," said Dennis Cullinan, national legislative director for Veterans of Foreign Wars. "I find it inconceivable they backed out of their agreement on VA-HUD."

House Republican leaders said at the time of the VA-HUD debate that the budget resolution-allowing for a $3.3 billion increase in medical care-was unrealistic and instead allotted enough room for a $1.3 billion increase.

Veterans' groups, including Veterans of Foreign Wars, Disabled American Veterans, AMVETS and Paralyzed Veterans of America, wrote Tuesday to House members, urging support for the Senate-backed supplemental provisions.

"Veterans across the country have been disappointed in the actions of the House of Representatives so far, as they pertain to VA health care," the letter states. "The men and women who have served, and are currently serving, this nation look to the House to see if it will live up to its commitments."