WASHINGTON, Dec. 8 — The Senate approved a $318 billion defense bill early Saturday, boosting pay for U.S. troops and giving the Bush administration the full funding it sought for a national missile defense program. After a three-day battle on the Senate floor, Senate Democrats buckled to President Bush’s demands to limit anti-terrorism spending to $20 billion.

PASSAGE CAME after a long day in which Republican senators rallied behind Bush and voted to bring down a Democratic-written $35 billion response to the Sept. 11 attacks. Democrats came back hours later with a $20 billion alternative, a direct response to Bush’s repeated threats to veto anything exceeding that amount.

In a written statement all but claiming victory, Bush congratulated the Senate for approving a package he said “honors the agreement I reached with the Congress and resists unnecessary nondefense spending.”

Bush and Republicans contend that Congress agreed to not spend more than the $20 billion limit, which Democrats deny.

MORE FOR THE MILITARY

The measure would also dramatically increase spending for the military as it waged the war on terrorism, providing $27 billion more than the fiscal 2001 measure but still $1.9 billion below Bush’s budget request.

It would include an across-the-board 5 percent pay raise, the centerpiece of a broad effort to increase the quality of life in the armed forces.

Health care and retirement benefits also would get a boost, and selected pay grades and positions would receive pay raises higher than 5 percent. The measure also would reduce out-of-pocket housing costs for military personnel as part of a program to eliminate such expenses completely by 2005.

“We believe these increases will significantly aid our ability to recruit, and perhaps more importantly retain, much-needed military personnel,” said Sen. Daniel Inouye, D-Hawaii, chairman of the Appropriations Committee’s defense panel.

BOOST FOR BOEING

The defense bill would provide $61 billion for new weapons procurement, including eight additional Army UH-60 helicopters, nine MV-22 aircraft, 48 F-18 fighters, 13 F-22 fighters and 15 C-17 airlift planes.

Included is a provision to allow the Air Force to lease up to 100 Boeing 767s to replace an aging fleet of KC-135 air tankers that has been used heavily in the air campaign in Afghanistan.

The provision was pushed hard by Boeing, which has announced up to 30,000 job cuts since the attacks in New York, Washington and Pennsylvania and which recently lost a lucrative Pentagon contract for the Joint Strike Fighter to competitor Lockheed.

Sen. John McCain, R-Ariz., blasted the proposal as “corporate welfare” for Boeing but did not directly challenge it on the floor.

Senate Budget Committee Chairman Kent Conrad, D-N.D., said McCain’s claim that the lease arrangement was more expensive was “absolute, sheer nonsense.”

KEY COMPONENTS OF PLAN

One reason Democrats agreed to a smaller anti-terrorism package was that they were unwilling to indefinitely delay a wartime spending bill for the military.

In a bid for bipartisan support, Democrats wrote their new plan with the help of Ted Stevens of Alaska, top Republican on the Senate Appropriations Committee.

Sen. Russell Feingold, D-Wis., was the only lawmaker to cross party lines.

The new, smaller Democratic anti-terrorism plan contained:

• $8.5 billion for countering bioterrorism and other domestic security programs, $4.1 billion more than Bush sought.
• $9.5 billion for the New York and Washington metropolitan areas to recover from the attacks, $3.2 billion more than Bush requested.
• $2 billion for defense, $5.3 billion less than Bush requested.
• Nothing for unemployment and health insurance aid for jobless Americans, compared to Bush’s $2 billion. Democrats say aid for the unemployed should be included in a separate economic stimulus bill.

The Associated Press and Reuters contributed to this report.