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Congress Hammering Out Iraq $ Deal

Congressional Republican leaders seem likely to deliver a victory to President Bush by killing a Senate-passed provision making some Iraqi rebuilding aid a loan, supporters and opponents of the loan provision say.

The GOP-led House and Senate overwhelmingly approved similar bills Friday providing most of the $87 billion that Mr. Bush requested for U.S. military operations in Iraq and Afghanistan and for rebuilding the two countries. The House vote was 303-125, while the Senate roll call was 87-12.

As Mr. Bush flew to the Philippines from Japan, White House spokesman Scott McClellan underscored the administration's demand for the removal of the loan provision in Senate bill.

"The president has made it very clear that it sends the wrong message," McClellan told reporters on Air Force One. Mr. Bush will try to persuade congressional negotiators in a conference committee to remove that provision, McClellan said.

He refused to say whether Mr. Bush would veto the bill if the loan provision remained.

Leaders of the two chambers hope to send compromise legislation to Mr. Bush for his signature next week, when U.S. allies will meet in Madrid to discuss potential financial aid for Iraq.

But with both bills providing nearly $66 billion for U.S. troops in the field - a widely popular expenditure - lawmakers agree that even staunch loan supporters would be hard-pressed to vote "no" on final passage if the loan provision was dropped.

"The leadership is saying there isn't a very good chance" that the loan language will be left in the final bill, said Sen. Saxby Chambliss, R-Ga., a sponsor of the loan provision.

Asked what leverage loan supporters had to keep that language alive, he conceded, "I don't know that there is much of that."

His sentiments were reflected by others. One administration official, speaking on condition of anonymity, said the chances of a loan provision surviving Senate-House bargaining were "slim to nil."

And Senate Appropriations Committee Chairman Ted Stevens, R-Alaska, a loan foe who will be a leader in the upcoming bargaining, said: "If I have the votes, it does a disappearing act."

Under the Senate provision, the U.S. loans would become grants if Iraq's foreign debtors forgive most of the money they are owed.

The House had voted against requiring Iraq to repay some of the aid. But many Democrats and conservative Republicans still prefer loans and may try exerting pressure on bargainers to structure some of the assistance as a loan.

Though the House and Senate bills would deliver most of what Mr. Bush wants, they did challenge his plans for Iraqi reconstruction.

Both chambers chopped nearly $2 billion off the $20.3 billion he requested for retooling Iraq's oil industry, its court system and the rest of its economy and government.

"The seriousness of the effort we are engaged in is starting to take hold," Sen. Chuck Hagel, R-Neb., told reporters, referring to the likelihood of a long-term U.S. involvement in Iraq. "There's a great unease about this reflected in Congress and across the land."

Mr. Bush used his weekly radio address Saturday to offer the latest in a series of progress reports on Iraq, this one focusing on American efforts to revive schools there.

"All of our efforts to improve Iraqi education ultimately serve the cause of security and peace," he said. "We want young Iraqis to learn skills and to grow and hope, instead of being fed a steady diet of propaganda and hatred."

Since Mr. Bush unveiled his proposal on Sept. 7, its political soft spot was its aid for Iraq, and that persisted until the end.

Minutes before final passage, the Senate voted by voice to strip nearly $1.9 billion from that part of the bill, erasing money for ZIP codes, sanitation trucks and other items that some lawmakers had derided as frivolous. The House had already killed most of those same items.

Senators also voted to add $1.3 billion for veterans' health care programs.

The bills also contained rebuilding aid for Afghanistan; assistance for Pakistan, Jordan, and other U.S. allies; and cash for rewards for the capture of Saddam Hussein and Osama bin Laden.

Throughout, the debate mixed concerns about the U.S. role in the fight against terrorism with the political reality that the next presidential and congressional elections are barely a year away.

"I believe in this president. I believe in this military," Stevens said during the closing minutes of Senate debate. "Those who vote against this bill will be voting against supporting our men and women in the field. They're still in harm's way."

Standing just a few feet away, the appropriations committee's top Democrat, Robert Byrd of West Virginia, fired back.

"I defy that statement and I hurl it back into the teeth of the senator from Alaska," Byrd said.

Byrd said opponents supported U.S. troops but opposed Mr. Bush's justification of the war with Iraq - that it was a terrorist state against which pre-emptive action had to be taken.

"Fie on that doctrine of pre-emption," Byrd said. "That's a dangerous doctrine. Those who vote against this bill are voting against that doctrine."