Iraq Grant Is Victory for Bush

In a crucial victory for President Bush, House and Senate negotiators agreed Wednesday to provide more than $18 billion in aid to Iraq as a direct grant, beating back bipartisan demands that some of the money to rebuild the country eventually be repaid.

Bush has been adamant that the reconstruction aid be provided with no strings attached, and he labored for weeks to bring wayward Republicans in line.

His victory came as a House-Senate conference committee approved the final version of a bill providing most of the $87 billion Bush requested for operations in Iraq and Afghanistan, including the more than $18 billion in reconstruction money. Negotiators voted to drop a Senate proposal that could have required Iraq to repay up to half the reconstruction aid.

But Bush’s win came at a price: He had to give ground in other areas that reflected lawmakers’ sensitivity to growing anxiety on the home front about the war’s toll.

Over the administration’s opposition, the compromise requires the Pentagon to expand access to health-care coverage for National Guard and Reserve troops when they return home.

It also trimmed about $1.7 billion from $20 billion of reconstruction aid -- dropping proposals for funds to modernize Iraq’s postal system, as well as other projects that lawmakers found hard to defend to constituents facing cuts in government services at home.

Although Republicans voted to stick with Bush on the issue that mattered most to him, they were not without complaints about what lawmakers called the administration’s “arrogant” way of dealing with Congress. In an unusual public display of frustration, Rep. Frank R. Wolf (R-Va.) complained bitterly that the administration had been too uncooperative in sharing information about Iraq.

“You bump up to a degree of arrogance,” Wolf said. “Pride goeth before the fall. From this point on, that changes.”

A final vote on the bill is expected in the House -- and possibly the Senate -- this week.

Administration officials argued against making Iraq repay any of the reconstruction aid because they said it was unwise to pile more debt onto a country already heavily indebted to other nations.

But support for the repayment idea came from members of both parties who found it difficult to explain to constituents why the United States was spending billions to rebuild a country sitting on the world’s second-largest oil reserves.

“It is a myth that Iraq cannot at some time in the future pay off those loans,” said Rep. David R. Obey (D-Wis.). “We’re asking the U.S. taxpayer to be Uncle Sucker rather than Uncle Sam.”

The Senate -- hoping to ease the burden on U.S. taxpayers while encouraging other nations to help -- had approved an amendment that would make half the reconstruction aid a loan, but allow it to be converted to a grant if other nations forgave most of the debt Iraq incurred under Saddam Hussein.

In the House, GOP leaders beat back a similar amendment. But in a sign of the political appeal of the option, the House later cast a symbolic, nonbinding vote in favor of the loan idea.

The decision by the committee came when Senate conferees voted 16 to 13, mostly along party lines, to drop the loan proposal. The victory was secured after GOP leaders persuaded two Republicans who had previously voted for the loan proposal -- Sens. Sam Brownback of Kansas and Ben Nighthorse Campbell of Colorado -- to vote against it in conference.

Conferees defied the administration when they agreed to include a Senate proposal to expand the military’s health-care system -- which now covers only personnel on active duty -- to include unemployed or uninsured National Guard and Reserve troops who choose to buy into its relatively low-cost coverage. The expansion is expected to cost about $400 million, but the bill applies only for one year.

Still, it was opposed by Pentagon officials, who said most reservists had alternative sources of health-care coverage when they were not on duty.

“We think that that’s probably not the best way to address the issue of how to compensate reserves,” Pentagon Comptroller Dov Zakheim said Wednesday.

But proponents of the expanded coverage, including many Republicans, said it was unfair to set different standards for military health-care benefits. “When you’re getting shot in Iraq, you don’t get asked whether you’re full-time military or in the Guard or Reserve,” said Sen. Patrick J. Leahy (D-Vt.).

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Times staff writer Nick Anderson contributed to this report.