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Senate Dems set to back down on more spending

WASHINGTON (CNN) -- Senate Democrats were expected to back down Friday from their quest for an additional $15 billion in spending for homeland defense and aid to New York, according to senior Democratic leadership aides.

If Democrats relent, that would amount to a win for President Bush, who had promised to veto the additional funding. Republican senators indicated they had the votes to back his veto threat.

Democrats, led by Sen. Robert Byrd, D-West Virginia, spent the week defying the president's threat. That set up a showdown with Republicans over immediate funding for initiatives such as border security, bioterrorism prevention, law enforcement and heightened security at ports, airports and nuclear facilities.

"We think there is danger now," Byrd, speaking on behalf of the extra expenditure, said on the Senate floor. "We ought not to wait, that's what we're saying."

The administration said $40 billion in emergency funding allocated after the September 11 attacks is sufficient for now. It promised to request additional money in the spring, once funding needs are clearer.

On Friday afternoon, Republicans won a motion that stripped Byrd's extra $15 billion from the defense spending bill. At that point, the Democratic leadership prepared to relent and come up with a proposal Bush would sign.

The battle between Senate Democrats and the White House over more antiterrorism money put in jeopardy the $318 billion defense bill, a political hot potato when U.S. troops are deployed in Afghanistan and the vast majority of Americans support the president.

Stimulus talks stall again

Meanwhile, talks aimed at crafting an economic stimulus package were abruptly canceled Friday after the lead House Republican negotiator accused Senate Democrats of negotiating in bad faith.

An angry Rep. Bill Thomas, R-California, who is chairing the talks aimed at boosting the economy in the wake of the September 11 terrorist attacks, left Washington Friday morning after reading press reports that Senate Democrats would only agree to a stimulus package if two-thirds of their members were on board.

"That's not acceptable in the context of good-faith negotiations," said Barbara Clay, a spokeswoman for Thomas.

The top Senate Democrat criticized Thomas' departure.

"They've walked out on the talks. They've walked out on unemployed workers, and they've walked out on America's economy and that is an outrage," said Senate Majority Leader Tom Daschle, D-South Dakota.

Democrats and Republicans disagree over the size and scope of any stimulus package, which officials consider key to help the economy recover from the recession. In recent weeks, amid gloomy economic reports, President Bush has repeatedly asked congressional leaders to settle their differences and reach an agreement soon.

On Friday, Bush released a statement criticizing what he called Democratic efforts to stall a stimulus bill. The rise in the nation's unemployment rate to 5.7 percent means the Senate should pass the measure, Bush said.

"Today's unemployment numbers are troubling, and they underscore that we must act to ensure America's economic security," the president said. "The Senate has not acted on the economic security package I proposed in October, and since then, over three-quarters of a million Americans have lost their jobs."

White House press secretary Ari Fleischer called on Senate Democrats to abandon call for two-thirds of their membership to approve the stimulus package.

"The Senate leadership needs to build a bridge that brings people together," Fleischer said. "They won't be able to get anything done for the country if they make it a one-way road. This two-thirds notion is a formula for partisanship, gridlock and inaction."

House Speaker Dennis Hastert, R-Illinois, concurred.

"We are troubled that Sen. Daschle wants to change the rules," Hastert said in a statement. "That is not negotiation. That is capitulation. This my-way-or-the-highway approach is completely unacceptable to Republicans."

Clay, speaking for Thomas, described the canceled meetings -- they were to take place Friday and Saturday -- as a "stumbling block." A decision won't be made before Monday as to when the House and Senate negotiators will sit down again, she said.

"I'm getting pessimistic. I'm getting worried. We have about a week left -- at the most two weeks -- and we aren't to first base," House Democratic Leader Richard Gephardt, of Missouri, said about the setback.

--CNN's Capitol Hill Producers Dana Bash and Ted Barrett, and White House Correspondent Major Garrett contributed to this report.


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