WASHINGTON – Democrats failed to bring combat troops home from Iraq by December 2008 and place more restrictions on the administration's interrogation program through a $50 billion war-funding measure.
The Senate also blocked a Republican countermeasure, but FOX News has learned that Democratic leaders in the Senate have left the door open to reconsidering the measures before the year is out as military leaders are warning of dire budgetary consequences
Defense Secretary Robert Gates said Thursday he needed the money before February — when top Democrats believe — because otherwise he'll have to start making layoff plans and other drastic budget cuts.
The Senate voted 53-45 on the main Democratic measure — 7 votes short of the 60 needed to close debate on the measure, effectively killing the bill.
After the vote, Senate Majority Leader Harry Reid took action to allow him to take up the two bills again, keeping them alive and giving lawmakers some time over the two-week recess beginning Friday to develop another approach.
House Speaker Nancy Pelosi's office said it won't be developing any changes itself, but left the door open to taking up a Senate measure should one pass.
The Senate on Friday also defeated a Republican "clean" version of the war-spending bill, which would have given the Pentagon the money it says it needs, but without placing withdrawal restrictions on the Pentagon or rewriting interrogation rules.
The 45-53 vote on GOP plan — also far short of the 60 needed to end debate — preceded the vote on the Democrat-led measure.
The Democrats' plan had passed the House on Wednesday by a razor-thin 218-203 vote. It would have given $50 billion in stop-gap war funding for operations in Iraq and Afghanistan, but would have required the administration to bring all combat troops home by Dec. 15, 2008. It also would have placed further restrictions on the administration's interrogation program, banning waterboarding by the CIA and other agencies not covered by the Army Field Manual.
The $50 billion that would have been provided under the Democrats' plan is about one-fourth of the amount that President Bush has requested. The GOP's opposing measure would have provided $70 billion.
Leading up to the pair of votes Friday, Senate Majority Leader Harry Reid blasted Gates for remarks he made Thursday, taking particular aim at comments, Reid said, meant Gates would go after union members first.
"Does that speak of this administration, their despicable attitude toward men and women who work hard and by chance to improve their lot are union members, they're going to get laid off first?" Reid said.
On Thursday, Gates told reporters, "By law, we're required to notify certain union employees 60 days in advance, so appropriate notices would have to go out starting in mid-December."
Senate Democrats also said money for the Iraq war should be tied to troop withdrawals because the Baghdad government has not taken advantage of the security provided by U.S. forces.
"We have done our part," said Sen. Patty Murray, D-Wash. "The Iraqi government has not done its part."
"And in the meantime, while more than 150,000 of our troops have been policing a civil war in Iraq, we have become more vulnerable overseas," she said.
Democrats said this week that if Congress cannot pass legislation that ties war money to troop withdrawals, they would not send Bush a bill.
Instead, they would revisit the issue upon returning in January, pushing the Pentagon to the brink of an accounting nightmare and deepening Democrats' conflict with the White House on the war.
Reid, D-Nev., said Republicans will be responsible for not passing war money by Christmas.
"The president, refusing to be held accountable for his disastrous war policy, is threatening to reject both our reasonable approach and that money, leaving our military empty-handed," Reid said in a statement on Thursday.
In the meantime, Democrats say, the Pentagon can eat into its $471 billion annual budget without being forced to take drastic steps.
"The days of a free lunch are over," said Sen. Chuck Schumer, D-N.Y.
Gates said that unless Congress passes funding for the war within days, he will direct the Army and Marine Corps to begin developing plans to lay off employees and terminate contracts early next year.
Gates, who met with lawmakers on Wednesday, said he does not have the money or the flexibility to move funds around to adequately cover the costs of the continuing operations in Iraq and Afghanistan.
"There is a misperception that this department can continue funding our troops in the field for an indefinite period of time through accounting maneuvers, that we can shuffle money around the department. This is a serious misconception," Gates told reporters at the Pentagon.
As a result, he said he is faced with the undesirable task of preparing to cease operations at Army bases by mid-February, and lay off about 100,000 defense department employees and an equal number of civilian contractors. A month later, he said, similar moves would have to be made by the Marines.
What's at stake is what the army calls its Operations Maintenance Account, which one Army officer described as the "lifeblood of the Army."
Military officials say those who would be affected are non-mission-essential personnel, but those who would be most hurt would be the families of soldiers and troops coming back from overseas, saying that services like daycare would be cut.
Contractors, such as trainers at base rifle ranges, also could be furloughed. Officials say that has an effects soldiers heading back into the field.
But Some members of Congress believe the Pentagon can switch enough money to cover the war accounts, Gates said. But he added that he only has the flexibility to transfer about $3.7 billion, which is just one week's worth of war expenses. Lawmakers, he said, may not understand how complicated and restrictive the situation is.
Democratic aides have said this week that the Pentagon can last at least through January, which could be a politically favorable gamble, if it plays out as some Democrats might hope. It would bring up the war debate in the heat of the presidential primary season, with Democrats hoping to capitalize on a war that would be nearing the end of its fifth year
The Associated Press contributed to this report.