UPDATE 2-US House leaders reach deal on war funding bill

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By Richard Cowan and Tabassum Zakaria

WASHINGTON, June 18 (Reuters) - Leaders in the U.S. House of Representatives struck a deal on Wednesday on legislation to provide $162 billion in new funds for the wars in Iraq and Afghanistan, ending a long standoff with the White House.

Democratic and Republican leaders in the House hailed an agreement they said would avoid a veto that President George W. Bush had threatened over some provisions Democrats had been trying to add beyond the war funds.

House Majority Leader Steny Hoyer, a Maryland Democrat, said the compromise would address "important domestic needs" as well, including expanding job benefits for the long-term unemployed in the United States.

Hoyer added that the full House was expected to debate the deal on Thursday. If it passes the House, the Senate is likely to take it up in coming days.

The $162 billion for the wars in Iraq and Afghanistan ought to carry U.S. combat troops for a full year, according to congressional estimates.

The White House said Bush can back the emergency spending bill, which it says includes $2.65 billion for future disaster relief.

White House Budget Director Jim Nussle said many of the administration's concerns had been addressed, including that the legislation would not raise taxes.

"We believe this is something the president can support," he told Reuters.

The compromise abandons a drive by House Democrats to impose timetables for withdrawing U.S. troops from Iraq. Senate Republicans and the White House have been staunchly opposed to Congress including such language in war-funding bills.

That debate will now be reserved for the presidential campaign between Democrat Barack Obama and Republican John McCain now in full swing before November's election.

Obama, an opponent of the Iraq war, says he supports the start of troop withdrawals, while McCain has sometimes talked about a long-term U.S. troop presence in Iraq.

The outcome of the presidential election will have huge bearing on whether Congress moves ahead with Democrats' desire to set troop withdrawals next year, after a new president takes office in January.

GIVE AND TAKE

Democrats successfully attached an extension of unemployment benefits to the bill to help people who have been out of work for more than 26 weeks. Under the bill, according to a House aide who asked not to be identified, the long-term unemployed would get an additional 13 weeks of benefits.