Senate postpones consideration of spy bill

WASHINGTON (Reuters) - Senate Democratic leader Harry Reid, facing stiff opposition, on Monday abruptly postponed until next month consideration of a measure to give immunity to telephone companies that participated in President George W. Bush's warrantless domestic spying program.

"Everyone feels it would be to the best interest of the Senate that we take a look at this when we come back after the first of the year," Reid, facing a pile of unfinished work, said on the Senate floor.

Sen. Chris Dodd, a Connecticut Democrat, interrupted his long-shot presidential campaign to return to Washington to lead the charge against immunity.

"I thank all my colleagues who joined me in fighting and winning a stay in the rush to grant retroactive immunity to the telecommunications companies," said Dodd, who took the floor for nearly 10 hours to denounce the bill and oppose any effort to swiftly consider any action.

White House spokesman Tony Fratto said the delay in finishing work on the measure was disappointing.

"There will be very little time to accomplish this when Congress returns in January. Each day of delay brings us closer to reopening a dangerous intelligence gap that we closed last summer," Fratto said.

In August, Congress bowed to Bush's demands and expanded U.S. government's power to conduct surveillance without a court order. The measure expires in February.

CIVIL LIBERTIES

Reid said the Senate remained committed to improving U.S. intelligence laws to fight terrorism while protecting Americans' civil liberties.

"We need to take the time necessary to debate a bill that does just that, rather than rushing one through the legislative process," he said in a statement.

Reid's surprise announcement came hours after Bush's demand for immunity for the companies won an initial victory. The Senate voted 76-10 to clear a procedural hurdle and move toward consideration of the bill.

The legislation would also bolster judicial oversight of federal surveillance of suspected terrorists. But Senate leaders were unable to agree on a schedule to vote on possible amendments as well as passage of the bill before Congress wraps up it work for the year, likely on Friday.

The Senate is expected to take up a massive, catchall spending bill on Tuesday to keep the government running and provide additional funds for the Iraq war.

The Senate also aims to complete a number of other bills before calling it quits for the year. Reid said the Senate would return to the surveillance bill when the 2008 session of Congress begins in mid-January.

Bush has demanded retroactive immunity for any telecommunication company that participated in the warrantless spying program begun shortly after the September 11 attacks.

Nearly 40 lawsuits have been filed accusing AT&T, Verizon and Sprint Nextel Corp of violating U.S. privacy rights.

Backers of immunity contend companies should be thanked, not punished, for helping defend the United States.

But critics argue the courts should determine if any company violated privacy rights of law-abiding Americans.

"For the last six years, our largest telecommunication companies have been spying on their own American customers," Dodd said.

"That decision betrayed million of customers' trust," Dodd added. "But was it illegal? I don't know. And if this bill passes in its current form, we will never know."

(Editing by Mohammad Zargham)