While many Republicans are sticking with President Bush on Iraq, more and more are deserting him on domestic issues sure to figure in 2008 contests.

Loyalty on Iraq may even be making it easier for GOP lawmakers — especially those in tight races — to break with Bush in other areas. It helps let them off the hook. GOP defections are sure to intensify in the coming months.

Bush does not have to face voters again, but a third of the Senate and all of the House will be on the ballot in just over a year — and their votes on issues such as Bush's veto of a bill expanding children's health care could come back to haunt or help them.

This comes as polls show Bush's approval rating in the low 30s and Congress' approval rating even lower. A new AP-Ipsos poll put public approval of Bush at 31 percent and Congress at 22 percent.

Earlier, a majority of Republicans broke with Bush on immigration legislation. Also, they didn't go along with his calls to overhaul Social Security, even when they controlled both houses of Congress.

Now, Bush is trying to reach out to the party's base and re-establish his credentials as a fiscal conservative, beginning with his veto of a bill that would boost federal spending for the State Children's Health Insurance Program (SCHIP) by $35 billion over five years. Bush called the legislation part of an effort to "federalize health care."

Bush also has threatened to veto nine of the 12 appropriations bills that make up the federal budget.

"One of the big lessons from the 2006 election loss was that Republicans have let spending get out of control," said GOP consultant Scott Reed. "I think the White House is focused on a Bush legacy that includes getting spending back under control."

Still, said Reed, "In some states, especially in the Senate races, running against the president on specific issues like this will help the Republican candidate."

Economic and libertarian-minded Republican conservatives suggest Bush's overtures are too little too late to help a despondent Republican party bracing for the possibility that the White House will end up in Democratic hands.

Bush's veto of the SCHIP expansion and other veto threats ring hollow because of Bush's past support for expensive programs like the Medicare prescription drug benefit and his failure to wield his veto pen, said Bruce Bartlett, an economist who was an adviser to Ronald Reagan and a Treasury official during the elder George Bush's presidency.

"Because he was so lax earlier in his term, he has no choice but to overcompensate," said Bartlett. "At the White House, they understand belatedly that they have destroyed the Republican party's reputation for fiscal responsibility. And they are trying to play catch-up."

The Republican party has seldom been so fragmented, as a rift expands between traditional economic conservatives and increasingly influential social conservatives.

Some of the harshest criticism of the administration's spending practices has come from former Fed Chairman Alan Greenspan, who wrote in his new book that his fellow Republicans deserved to lose their congressional majorities in 2006 because of runaway spending.

New York Mayor Michael Bloomberg, a one-time Democrat who left the Republican party three months ago, complained that U.S. conservatives preach fiscal discipline but "want to run up enormous deficits." He called it "alchemy at best, or if you like, lunacy."

More defections on domestic policy seem likely, especially if Democrats can follow through as they have pledged to do, by sending Bush appropriations measures as individual bills. That shifts the focus from overall spending levels to specific items — such as enhanced port security, boosting funds for medical treatment of returning Iraq veterans and a variety of homeland-security measures.

Bush has claimed the veto-threatened appropriations would amount to about $22 billion more in red ink than he can tolerate.

"Congress has completed the fiscal year without completing work on a single appropriations bill," said White House press secretary Dana Perino. She said Bush would continue to prod Congress to "send the bills to him in regular order, on time, and without busting the budget and without raising taxes."

On the SCHIP bill veto, the division in the party is underscored by the fact that among the bill's most ardent supporters are conservative Republican Sens. Charles Grassley of Iowa and Orrin Hatch of Utah and Georgia's Republican Gov. Sonny Perdue.

Grassley has called Bush's veto of the children's health care bill "irresponsible" and says he agrees with criticism of runaway spending during the six years when Bush was president and Republicans controlled Congress.

Open dissension among Republicans is stronger in the Senate than the House.

Right now, the House has proportionately more conservatives from safe districts. Also, there is a stronger sense of the importance of hanging together against a Democratic onslaught.

As of now, sponsors of the bipartisan SCHIP bill lack the votes needed in the House to override Bush's veto. The House votes on Oct. 18. But that is only the first of what could be a series of veto fights.

As Republicans get worn down by bad-news polls and disgruntled constituents, "there will be more Republican defections. And Congress may even be able to override a veto," said Norman Ornstein, an analyst who studies Congress at the American Enterprise Institute.