US fight over Iraq war funds to enter new phase

WASHINGTON, Apr 28 (Reuters) A fierce political battle over a Democratic plan to pull US troops from Iraq triggered a veto promise from President George W. Bush, but negotiations on a new bill have quietly begun.

The Democratic-led Congress plans to send Bush a bill on Tuesday that gives 124 billion dollars for the war in Iraq but requires a pullout to begin by Oct. 1. The White House has said Bush will waste no time in vetoing it and may do so the day he gets it.

Debate on the bill has been marked by escalating rhetoric, with Senate Democratic leader Harry Reid of Nevada saying Bush has already lost the war and Republicans labeling him a defeatist.

But behind the scenes, many from both sides expect an eventual compromise.

One effort toward a compromise will focus on so-called benchmarks -- goals for measuring Iraqi progress.

Yesterday, Bush made clear again he ''won't accept'' any bill containing withdrawal dates. But he also invited Democratic and Republican leaders to a White House meeting on Wednesday to discuss a second attempt at a war-funding bill. ''I believe we can work a way forward,'' he said.

While criticizing Bush's swagger, Reid also took a conciliatory tone in saying some of the president's remarks recently have been ''promising.'' Reid said he had met with Senate's Republican leader Mitch McConnell of Kentucky and planned to do so again on Monday.

White House budget director Rob Portman told Reuters this week he hoped that once the confrontation over current Iraq bill plays out, ''we'll get a more serious discussion'' on a new bill.

Senate Armed Services panel Chairman Carl Levin, a Michigan Democrat, has discussed language in a second bill that would measure the progress of the Iraqi government on achieving such goals as passing legislation to share revenues fairly among the country's Sunnis, Shi'ites and Kurds.

McConnell and other congressional Republicans have signaled openness to this approach. A senior White House official, who spoke on condition of anonymity, said such goals were a ''promising area'' for discussion and praised Levin's role.

Some Democrats are weighing language for a second bill that would remove pullout dates but would make the release of some types of aid to the Iraqi government contingent on whether it meets certain goals.

Yet the White House and many Republicans strongly oppose an approach that would punish the Iraq government with a loss of aid if it fails to meet goals, saying that would harm its ability to get up on its feet.

On a separate track, Democratic Rep. John Murtha of Pennsylvania, a vocal war critic, has talked of a bill that removes timetables but funds the war for just one or two months.

Labeling a short-term bill a means of ''kicking the can down the road,'' Portman said it would undermine the troops and the military's planning efforts and said the White House would strongly resist it.

Meanwhile, Democrats plan to highlight the unprecedented rebuke they are delivering to Bush when they send their bill to him on Tuesday. That day is the fourth anniversary of Bush's speech aboard an aircraft carrier declaring the end to major combat operations in Iraq. To remind Americans of the anniversary, antiwar groups are running television ads showing footage of Bush aboard the carrier that had been decorated with a ''Mission Accomplished'' banner.

If the past is any guide, Bush will not pass up the chance to use his veto to repeat his criticism that the Democratic bill would handcuff military leaders and undermine the troops.

REUTERS JS ND2208