Bush's budget fight with Democrats deepens

WASHINGTON (Reuters) - Democratic congressional leaders pushed on Tuesday to finish bills to pay for military, veterans health care and domestic programs, while possibly injecting more Iraq war funds into the pipeline, as President George W. Bush again threatened to wield his veto pen.

Bush's objection is over the Democrats' desire to spend about $9 billion more than he wants for various domestic social programs, from cancer research and early childhood education to helping the poor heat their homes this winter.

Democrats were considering coupling the domestic funding bill with money for the Pentagon and veterans that Bush wants, but final decisions had not yet been made, according to congressional aides.

"If the reports of this strategy are true, I will veto such a three-bill pileup," Bush warned.

His remarks were another in a string of veto threats as the Republican president tries to burnish his credentials as a fiscal conservative despite six years of deficit-spending and debt accumulation.

In blocking enactment of various fiscal 2008 spending bills, Republicans also are trying to paint the Democratic-controlled Congress as incompetent big spenders in the run-up to next year's national elections.

Rep. Rahm Emanuel of Illinois, a member of the House Democratic leadership, shot back: "Congressional Republicans remain ready and willing to rubber stamp the Bush agenda: No to children's health care; No to a new direction in Iraq; And no to investing in America's future."

While Bush wants Congress to reduce some of its domestic spending priorities that they insist will not add to the debt, he is asking lawmakers to approve $196 billion in new funds for the wars in Iraq and Afghanistan that would use borrowed funds.

Like the previous $600 billion in war funds he has spent, none of the $196 billion would be paid for with spending cuts elsewhere or tax increases.

IRAQ 'BRIDGE FUND'

House Democrats want to hold off until early next year approving the full $196 billion for war, with the aim of attaching new conditions for ending the fighting in Iraq.

But in the meantime, congressional leaders are thinking of passing some of that money, a "bridge fund," to keep war operations running.

Rep. James McGovern, a Massachusetts Democrat and an outspoken critic of the Iraq war, told Reuters on Monday that he would support a bridge fund, but that he was "looking for assurances of doing something dramatically different" next year when the rest of the Iraq combat funds are debated.

Earlier this year, Bush vetoed war-funding bills that sought to set timetables for withdrawing U.S. troops from Iraq.

Besides Iraq war funding, lawmakers also must decide whether they will pare back Pentagon funds for controversial missile interceptor and radar sites the administration wants to place in eastern Europe.

The budget fight, which could stretch into January, comes as Bush and Democrats are in a politically charged dispute over expanding health insurance for children from low-income families.

Following a Bush veto of a bill this month, Democrats and some Republicans have crafted a new version. But Bush on Tuesday chastised that effort, saying: "Despite knowing it does not have a chance of becoming law, the Senate will now take up the second ... bill the House passed last week. I believe the Senate is wasting valuable time."