Several officials said the emerging compromise bill would cost about $120 billion, including as much as $8 billion, originally resisted by the White house, for Democratic domestic priorities such as disaster relief for Hurricane Katrina victims and farmers hurt by drought.
The deal would be considered a victory for President Bush because there are no deadlines for troop withdrawals, reports CBS News correspondent Sharyl Attkisson. But that victory may be fleeting, as more and more Democrats and Republicans are considering September as an unwritten deadline, Attkisson reports.
After a bruising veto struggle over war funding, congressional leaders in both political parties said they hoped the compromise would be cleared for President Bush's signature by Friday.
Despite the concession, Democratic Senate Majority Leader Harry Reid told reporters that the legislation would be the first war-funding bill sent to Mr. Bush since the U.S. invasion of Iraq "where he won't get a blank check."
Reid and other Democrats pointed to a provision that would set standards for the Iraqi government in developing a more democratic society. U.S. reconstruction aid would be conditioned on progress toward meeting the goals, but Mr. Bush would have authority to order the money to be spent regardless of how the government in Baghdad performed.
He said Democrats would look to a different defense bill later this summer to "continue our battle — and that's what it is — to represent the American people like they want us to represent them, to change the course of the war in Iraq."
Republicans said that after weeks of struggle, they had forced Democrats to give up their demand for a date to withdraw the troops.
"I'm optimistic that we will achieve the following: a full four-month funding bill without surrender dates. I think there's a good chance of that," said Senate Republican leader Mitch McConnell of Kentucky.
Rep. John Boehner of Ohio, the House Republican leader, added, "Democrats have finally conceded defeat in their effort to include mandatory surrender dates in a funding bill for the troops, so forward progress has been made for the first time in this four-month process."
Republicans paid a price, too, in terms of billions of dollars in domestic spending that Democrats wrung from them and the administration.
Officials said the final details of the measure remained in flux. They spoke on condition of anonymity, saying that Democratic House Speaker Nancy Pelosi intended to present the proposal to her rank and file at an evening meeting.
In all, officials said the measure included about $17 billion more than Mr. Bush initially requested. Of the $17 billion, about $9 billion would go for defense-related items and veterans' health care. The balance would be for other domestic programs.