House leaders reach deal on war funding bill

WASHINGTON (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.

Bowing to Republican pressure, Democrats dropped their provision that would have given a total of 26 weeks of extra benefits to workers who have not been able to find jobs in states with the highest unemployment rates.

The aide also said Republicans won a provision requiring those who get the additional jobless benefits to have worked for a minimum of 20 weeks before losing their jobs.

Democrats had argued the tougher requirement would leave many workers uncovered in an economy that has been limping along with a 5.5 percent unemployment rate in May and worsening home mortgage foreclosures.

With the compromise bill, Democrats also won a significant expansion of college education benefits for veterans of the Iraq and Afghanistan war. But fiscal conservatives lost their battle to have the huge cost -- more than $50 billion over 10 years -- paid for through tax increases or spending cuts.

Last month, the House approved language that would have imposed a tax increase on the wealthy to pay for the new veterans' benefits, a move that Republicans opposed.

Reacting to devastating floods that have hit Midwestern states, the government will replenish federal disaster relief funds with $2.65 billion in new money, Nussle said.

He also said the total funding for the bill would be $108 billion for this year and $70 billion for the fiscal year starting on October 1.

(Additional reporting by Joanne Allen; Editing by John O'Callaghan)