Story Highlights• $124 billion spending bill mandates U.S. troops leave Iraq in 2008
• Small U.S. contingent would stay in Iraq to battle al Qaeda terrorists, bill says
• Bush threatens to veto bill; says bill will make U.S. defeat more likely
• House Speaker Nancy Pelosi tells Bush to stop threatening Congress
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WASHINGTON (CNN) -- President Bush and his Democratic opponents in Congress are squaring off in a high-decibel, high-stakes game of chicken over a bill to fund military operations in Iraq and Afghanistan.
Both sides are insisting the other needs to relent in order to get troops the supplies and equipment they need.
The House of Representatives and the Senate have added language to a $124 billion war spending bill that would require U.S. combat troops to leave Iraq sometime in 2008 -- by March in the Senate version and August for the House.
A smaller American contingent would remain to train Iraqi security forces and battle al Qaeda terrorists, who make up a small but deadly element of the insurgency that has plagued the country since the U.S.-led invasion in 2003.
The House version passed narrowly Friday, and Senate Democrats on Tuesday beat back a Republican attempt to strip the withdrawal language from the bill.
But Bush said his decision to commit nearly 30,000 additional U.S. troops to the four-year-old war was showing "some early signs that are encouraging." (Watch Bush vow to veto the withdrawal bill )
For example, he said, restrictions on American troop movements have been lifted, checkpoints have been set up on the edges of the city and U.S. and Iraqi troops are manning new joint security stations.
The Iraqis are contributing $10 billion toward reconstruction, he added. "If the House bill becomes law, our enemies in Iraq would simply have to mark their calendars. They'd spend the months ahead plotting how to use their new safe havens once we were to leave," Bush said.
"Some [lawmakers] believe that by delaying funding for our troops, they can force me to accept restrictions on our commanders that I believe would make withdrawal and defeat more likely," the president said. "That's not going to happen."
"If Congress fails to pass a bill to fund our troops on the front lines, the American people will know who to hold responsible."
Pelosi to Bush: Calm down
Less than an hour after Bush made that comment, House Speaker Nancy Pelosi stood in front of the cameras to offer "a hand of friendship" and urge the president to "calm down with the threats." (Watch Pelosi tell Bush 'There's a new Congress in town' )
"There's a new Congress in town. We respect your constitutional role. We want you to respect ours," she said.
The remarks from her counterpart in the Senate, Majority Leader Harry Reid, were a little more pointed.
"Why doesn't [Bush] get real with what's going on in the world?" Reid said. "His arrogance is getting real out of touch with what's going on with reality."
Emboldened by majority votes in the House and Senate to set a deadline for U.S. forces to leave Iraq, Democratic leaders insist the president is going to have to compromise in order to get funding to continue the war.
"This president is not getting any more blank checks from the Congress," Pelosi said. "We will have legislation that will give him every dollar he asks for for our troops and more -- but with accountability."
But as Bush noted in a speech Wednesday to the National Cattlemen's Beef Association, Democrats have nowhere near the two-thirds majority they need in both houses to override his promised veto.
"Yet Congress continues to pursue these bills, and as they do, the clock is ticking for our troops in the field," he said.
Democratic sources told CNN that party leaders have not yet decided what strategy to pursue if Bush goes through with his threat to veto the spending bill. At that point, they will be faced with the question of how far to take this political standoff, with combat troops in the field.
Bush and congressional Democrats can't even agree on how long action on the bill can be delayed before the U.S. military begins having financial problems.
The president said Wednesday that "funding for our forces in Iraq will begin to run out in mid-April."
Democrats immediately pushed back, saying the military won't have any real financial issues until at least mid-May -- and noting that last year, Bush didn't sign the military funding bill until June 15.
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