US Democrats to fund Iraq war with no pullout date

WASHINGTON, May 23 (Reuters) President George W Bush won a battle over nearly 100 billion dollar to fund the Iraq war as Democratic leaders in Congress on Tuesday abandoned efforts to withdraw troops for now but pledged to try again in July.

Instead of setting schedules for pulling US troops, it appeared the Democratic-run Congress and the Republican White House agreed for the first time to include conditions prodding Baghdad to make better progress toward quelling violence or risk losing around 1.3 billion dollar in US reconstruction aid.

Bush could waive the provision, however.

Congress wants to deliver by week's end the 100 billion dollar to fund the wars in Iraq and Afghanistan through September.

With the Iraq funding deal, Democrats said the first minimum wage increase in a decade, a high priority for them, would be included.

Congress already has approved tax breaks for small businesses to go along with the wage hike.

Democrats also will try to attach about 20 billion dollar in domestic initiatives -- from farm aid and better health care for veterans, to health insurance for poor children and money to continue rebuilding states hit by hurricanes in 2005.

Negotiations between the White House and Congress were continuing on details, however.

House liberals were disappointed by the emerging deal, and House of Representatives Speaker Nancy Pelosi, a California Democrat who signed off on the plan, said she opposed the Iraq portion of it.

VOTE LATER THIS WEEK Pelosi said she was ''not likely to vote for something that does not have a timetable'' for withdrawing troops from the war that has killed at least 3,420 U.S. soldiers and wounded more than 34,000.

But enough Republicans are expected to join some Democrats in backing the Iraq measure to ensure passage if it is put to a vote later this week, as planned by Pelosi.

House Appropriations Committee Chairman David Obey of Wisconsin said Democrats will move the troop withdrawal fight to another bill.

''The practical result of this would be we would transfer the debate on the Iraqi war'' from the current emergency funding bill to fiscal 2008 war spending bills moving through Congress starting in July, he said.

White House spokesman Tony Snow said the negotiated measure would provide ''the funding and flexibility the forces need. That's what we've wanted all along.'' Bush vetoed Congress' first version of this year's emergency war funds bill because it set an Oct. 1 deadline for starting to pull most of the 147,000 soldiers out of Iraq, a goal of anti-war Democrats.

In postponing their demand for timetables to withdraw combat troops, Democrats acknowledged the political realities.

''The president has made it very clear he's not going to sign timelines (for withdrawing troops). We can't pass timelines over his veto,'' House Majority Leader Steny Hoyer of Maryland told reporters.

Virginia Democratic Rep. James Moran, who pushed for withdrawing troops, said Democrats would get blamed for any further hang-ups in passing the war funds. ''The president has the bully pulpit,'' Moran said.

While disappointing to some Democrats who say they won control of Congress last November largely because voters wanted an end to the 4-year-old Iraq war, it was welcome news for Republicans who have argued Congress should not be ''micro-managing'' the war.

''Democrats have finally conceded defeat in their effort to include mandatory surrender dates in a funding bill for the troops,'' said House Minority Leader John Boehner of Ohio.

But some Democrats argued that even with a weaker bill, they have ended four years of ''rubber stamp'' war funding bills of the previous Republican-run Congress.

Bush and most Republicans have argued that setting dates for withdrawing US troops would rob military commanders of the flexibility they need to conduct the war.

Despite those charges, even some congressional Republicans, Boehner among them, have spoken of autumn as the timeframe for reassessing progress in Iraq and possibly producing ''Plan B.'' REUTERS KK PM0635