The U.S. Congress has approved President Bush's $87 billion spending request for Iraq and Afghanistan, after the Senate defied the Bush administration by voting to convert some Iraq reconstruction money to a loan.
The Republican-led House and Senate approved Mr. Bush's funding request by overwhelming margins Friday.
Senator John Warner, a Virginia Republican, who voted for the measure said, "It sends a strong signal to those nations watching, 'we are going to stay the course, finish this, liberate Iraq, and turn it over as soon as possible to the people to operate your own country."
But many Democrats voted against the legislation. Senator Bob Graham of Florida said the measure would undermine efforts to get other nations to help with the rebuilding of Iraq.
"I believe this $87 billion blank check appropriations removes whatever incentive this administration may have had to negotiate seriously a burden-sharing and a decision-making sharing with those countries which have the capability of providing real support in Iraq," he said.
The stage is now set for tough negotiations next week between negotiators from both chambers to work out differences between their respective versions of the legislation.
Republican Senator Ted Stevens, the chairman of the Senate Appropriations committee, stressed that "It will be a difficult conference in some ways."
The key issue to be resolved is whether half the $20 billion in Iraq reconstruction money should be a loan, a proposal backed by the Senate, or whether all the money should be a grant, a plan endorsed by the House.
Supporters of the loan idea say American taxpayers should not have to pay for all the reconstruction of a country that has the second largest oil reserves in the world.
Opponents, including the Bush administration, argue the United States should not be adding to Iraq's debt burden.
But in a move that reflected concerns about the cost of the overall package, the Senate, following the lead of the House, voted to delete nearly $2 billion from Iraq reconstruction funds for projects that some lawmakers said appeared frivolous, including creating postal codes.
Republican congressional leaders hope to send President Bush a final bill that he can sign before an international donors conference on Iraq opens in Madrid next week.