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Congress set to pass $87 billion for Iraq; Senate may attach strings

WASHINGTON—Congress headed Thursday toward approval of spending $87 billion on Iraq and Afghanistan, but the Senate was expected to deny President Bush a complete victory by insisting that a portion of the aid to Iraq be given as a loan.

Final congressional passage of the controversial $87 billion spending measure was certain and expected to come Friday. That will be a major political victory for President Bush, who also scored a big win for his Iraq policy Thursday at the United Nations.

Both triumphs are expected to smooth the way for Bush's efforts to press other nations to donate money and troops to help rebuild Iraq at a conference later this month in Madrid.

The loan dispute in the Senate was the only blemish on Bush's day of triumph on Iraq policy. The Senate was expected to vote late Thursday night to require that $10 billion—half the amount the bill would devote to reconstructing Iraq—be given as a loan to the oil-rich nation rather than as a grant, as Bush had insisted.

Most Democrats and more than a few Republicans felt such loan terms were essential to ease deep reservations held by Americans about spending $87 billion overseas at a time of economic weakness, rising deficits and tight budgets at home.

Nevertheless, under the Senate's loan terms, the United States would forgive the $10 billion debt if other foreign countries with debt to Iraq—such as Russia, Saudi Arabia, Germany and France—waive repayment of 90 percent of their outstanding loans.

That means U.S. taxpayers could still end up footing the entire $87 billion bill. Most of the money—$67 billion—would support U.S. military efforts.

Bush's request for so much money for Iraq galvanized Democrats, who saw it as an opportunity to link slow progress in post-war Iraq with the slow domestic economic recovery.

"What we are considering today is not a final package, it is a down payment of more to come," said House Democratic Leader Nancy Pelosi of California. "We want an accounting, a justification of the $87 billion you are asking for now, and we want an accounting for this failed policy."

The House of Representatives was expected to give unqualified final approval to Bush's entire $87 billion package either late Thursday night or Friday.

Sen. Edward Kennedy, D-Mass., delivered a blistering critique of the administration's Iraq policy on the Senate floor Thursday, accusing the administration of lying about the reasons for war.

"Iraq was not a breeding ground for terrorism," Kennedy said. "Our invasion has made it one."

The spending bill presented a quandary for four Democratic lawmakers now running for president. All four—Sens. John Kerry of Massachusetts, Joseph Lieberman of Connecticut, John Edwards of North Carolina and Rep. Richard Gephardt of Missouri—voted for the resolution last October that authorized the use of force in Iraq.

That vote has haunted them throughout the early campaign season as former Vermont Gov. Howard Dean jumped to the front of the pack on the strength of his anti-war stance.

Edwards has said he would vote against the spending bill and Kerry, in an Internet announcement on Thursday, said he would join him.

Gephardt and Lieberman said they would vote for the bill.

Rep. Dennis Kucinich, D-Ohio, who is also running for president but winning comparatively little support, opposed both the war-authorization vote and the $87 billion spending measure.

Republican leaders, ridiculing Democrats who vowed to vote against the bill, said the money was crucial to secure peace in Iraq and assure the prompt return of U.S. troops.

"This isn't about your patriotism, it's about your judgment," Majority Leader Tom DeLay, R-Texas, said. "This bill doesn't just fund the war, it funds the overall strategy of the war on terror. The reconstruction money is defense spending, it is war spending and it is homeland security spending. They serve the same strategy and combat the same enemy."

The authors of the loan were two centrist Democrats, Evan Bayh of Indiana and Ben Nelson of Nebraska, and five moderate and conservative Republicans—Susan Collins and Olympia Snowe of Maine, John Ensign of Nevada, Saxby Chambliss of Georgia and Lindsey Graham of South Carolina.

Two other Republicans who had backed loan plans—Kay Bailey Hutchison of Texas and Arlen Specter of Pennsylvania—withdrew their support in deference to Bush. Specter was among a handful of senators on the receiving end of a firm and intense lecture from Bush on Tuesday at the White House.

"I have not seen the president with such fervor and such determination and such intensity since I saw him two days after 9-11," Specter said.

The Congressional Research Service places Iraq's outstanding debt between $93 billion and $153 billion. Top creditors include Kuwait, Saudi Arabia, Russia, France and Germany. Bush has said the United States should not add to that debt burden.

But advocates of the loan package argued it could help reduce Iraq's debt and set the right tone for the upcoming donors' conference in Madrid.

"This is a very generous proposal," Collins said. "This will encourage other countries to forgive at least a portion of their debts."

Lawmakers who flinched at the size of the package targeted the $20.3 billion in reconstruction money sought initially by Bush. Earlier this month, House Republicans cut out $400 million to build two prisons, $153 million for a fleet of garbage trucks, and $9 million to develop a postal ZIP code system.

The Bush administration had defended those items, saying they are crucial to restore security, sanitation and a more modern communication system.


(c) 2003, Knight Ridder/Tribune Information Services.