updated 6/7/2006 10:30:13 PM ET 2006-06-08T02:30:13

Despite mounting pressure, House and Senate negotiators Wednesday failed to clear the final hurdles to agreement on a $94.5 billion measure to finance the war in Iraq and provide more hurricane relief to Gulf Coast states.

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One of the last remaining obstacles was a bid by the Senate to use the bill as a vehicle to add $7 billion to President Bush’s budget for health and education programs when passing subsequent spending bills for the budget year beginning Oct. 1.

The House and the administration were holding firm against breaking Bush’s budget, but two Senate GOP moderates sided with Democratic negotiators to insist on the money.

A Pentagon money crunch is worsening almost daily, but there won’t be a crisis if Congress fails to clear the legislation by the end of the week.

The bill, almost four months in the making, was cut substantially Tuesday night when top negotiators reduced its cost by more than $14 billion from a version that passed the Senate last month.

The GOP-driven negotiation hewed to a White House demand that the emergency bill be kept to Bush’s original $92.2 billion request for Iraq and Afghanistan and hurricanes with an additional $2.3 billion to combat bird flu.

House, Senate lock horns on Gulf Coast grants
The House and Senate are still in disagreement over how to allocate $5.2 billion in flexible federal grants to Gulf Coast states. Bush requested $4.2 billion in such community development block grants for Louisiana housing aid, but Mississippi Gov. Haley Barbour, a Republican, lobbied House Speaker Dennis Hastert, R-Ill., by phone Wednesday to try to make sure his heavily damaged state wins a big chunk of the rest.

Agreement remained elusive on how to distribute the grant money among Mississippi, Louisiana, Texas and Alabama.

The bid to use the Iraq funding bill to press for future increases in education and health funding was led by venerable Senate Democrat Robert C. Byrd of West Virginia. GOP moderates Arlen Specter of Pennsylvania and Mike DeWine of Ohio sided with Democrats, and top Senate negotiator Thad Cochran, R-Miss., was sympathetic as well.


At the same time, $4 billion in Senate-passed farm disaster aid remained officially open to negotiation. It was an open secret that the House and the administration would succeed in killing the funds, save for about $500 million for farmers in hurricane-ravaged Gulf Coast states.

The conservative-dominated House back in March passed a bill sticking with Bush’s request. The free-spending Senate added billions for farm disasters, fisheries aid, veterans medical care and port security and to compensate Texas for taking on evacuees of Katrina.

Most of that money was dropped, as was $289 million to create a fund to compensate people if they were to be injured by a pandemic flu vaccine. That drew criticism from fund sponsor Sen. Edward M. Kennedy, D-Mass., who said paramedics and other first responders likely to be the first to receive avian flu shots would refuse to do so without a compensation program.

The tentative agreement cut the White House request for the Federal Emergency Management Agency’s chief disaster fund to $6 billion. The move freed up more than $1 billion for congressional initiatives such as $235 million for Texas to provide schooling for students displaced by Hurricane Katrina and additional grants to Gulf Coast states.

Another $65 billion for Iraq, Afghanistan
The underlying bill contains $65.7 billion in Pentagon funds for Iraq and Afghanistan, including funding for military operations and maintenance, weapons procurement, personnel and an initiative to locate and disarm roadside bombs.

The military mission in Iraq is costing more and more each month. With the passage of this bill, total spending for the Iraq war would hit $318 billion, under figures provided by the Congressional Research Service.

The bill also contains $2.3 billion in foreign aid for Iraq, to combat famine in Africa and Afghanistan and support U.N. peacekeeping missions in Sudan, among other purposes.

The bill’s $19.2 billion total for hurricane relief and reconstruction, includes $3.7 billion for new and rebuilt flood control projects for Louisiana, chiefly around New Orleans.

More for the borders
The compromise bill also provides $1.9 billion for Bush’s border security initiative to provide 1,000 more Border Patrol agents along the Mexican border, deploy about 6,000 National Guard troops and build detention space for 4,000 illegal immigrants.

For his part, Cochran abandoned a bid to devote $700 million to purchase CSX Transportation’s recently rebuilt Gulf Coast freight line for a new East-West coast road. He also dropped a much-criticized provision to give Northrop Grumman Corp., owner of the Ingalls Shipyard in Pascagoula, Miss., perhaps $140 million to $200 million in compensation for business disruption caused by Katrina.

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