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Last Updated: Tuesday, 4 November, 2003, 12:08 GMT
Congress passes Iraq budget
Police demonstrating in Basra about unpaid wages
Key staff like police get angry if there's no money for wages
The United States Senate has given final approval to President George W Bush's huge emergency funding package for Iraq and Afghanistan.

Of the $87.5bn total, about three-quarters will pay for military operations in Iraq, with a much smaller sum for US troops in Afghanistan.

It is America's most expensive and ambitious effort since the Marshall Plan to rehabilitate Europe after World War II.

On Monday, the US president gave his first reaction to the weekend attack on a helicopter near Falluja which killed 16 soldiers, saying it would not deter Washington's efforts in the country.

"The enemy in Iraq believes America will run. That's why they're willing to kill innocent civilians, relief workers, coalition troops. America will never run," President Bush said.

A BBC correspondent in Washington says Mr Bush's now familiar message of staying the course has taken on new urgency.

An opinion poll over the weekend shows that for the first time a slim majority of Americans now disapprove of the president's handling of the war.


Bowing to Mr Bush's demands, the lawmakers provided all of the nearly $20bn reconstruction money for Iraq as a no-strings grant.

Earlier a number of Republicans joined Democrats in advocating that at least half of the rebuilding money be in the form of loans.

Senators had defied the president by voting to convert half of a $20bn aid package to rebuild Iraq into a loan.

Total including social security: $2 trillion
Defence budget: $400bn
Foreign aid budget: $14bn
Main aid recipients:
Israel ($2.7bn) Egypt ($1.9bn) Colombia ($650m)

But the White House had threatened to veto the entire bill if it required any repayment, which it argued would undermine efforts to stabilise Iraq, prolong the US occupation and burden Iraq with more debt.

Money will go to funding clinics, improving utilities like power and water, training officials, extending Arabic-language broadcasts to Iraq, and providing rewards for the capture of Saddam Hussein and al-Qaeda chief Osama Bin Laden.

Funds are also earmarked for American allies in the war on terror, such as Pakistan.

However, Congress did cut the reconstruction aid by $1.7bn, removing from the budget funds for restoring drained marshland and redesignating telephone and postal codes, among other projects.

'Monumental failure'

Some senators have welcomed the approval of the reconstruction fund.

Anti-US graffiti in Iraq
The battle for hearts in Iraq is far from won
"Our men and women in uniform face life-threatening obstacles every day, and are counting on us to provide them with the resources they need to get the job done," said Ted Stevens, the Republican chairman of the Senate's appropriations committee.

However Senator Robert Byrd of West Virginia called the bill "a monument to failure" that contradicted the White House's assurances last spring that Iraq would finance most of its rebuilding.

In a voice vote, he was the only senator to shout "Nay" when the budget was passed.

The BBC's Caroline Hawley
"There are many here asking why it's taking the coalition so long"

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