WASHINGTON – A year after Democrats won control of Capitol Hill, Congress delivered its clearest victory yet over President Bush Thursday, resoundingly overturning his veto of a $23 billion water resources measure – the first veto override of Bush’s presidency.

The 79 to 14 vote in the Senate was followed Thursday night by final passage of a huge, $151 billion health, education and labor spending bill. House and Senate negotiators also reached agreement on a transportation and housing bill that increases spending on highway repair in the wake of the Minneapolis bridge collapse and boosts foreclosure assistance in the midst of a housing crisis.

Moreover, the House unveiled a four-month, $50 billion Iraq war-funding bill that would give the president 60 days to present a plan to complete U.S. troop withdrawals by Dec. 15, 2008. The measure would limit the troops’ mission to counterterrorism and the training of Iraqi forces and would extend a torture ban to the CIA.

In short, the long-awaited battle between Congress and Bush over federal spending and the size and reach of government is now on.

“I hope that the Congress feels good about what we’ve done,” said Senate Majority Leader Harry Reid, D-Nev. “I believe in the institution of the legislative branch of government. I think it should exist, and for seven years this man has ignored us.”

The day’s events highlighted the growing divide between Congress and the White House over the use of taxpayer resources, especially their differences over domestic programs and war spending.

The Senate Thursday night moved toward final congressional approval of a $459.3 billion defense funding bill that would increase military spending by $35.7 billion – or 9.5 percent – over the previous fiscal year. The president has said he will sign that legislation.

But Bush has vowed to veto the newly approved domestic spending bill, which includes $10 billion more than he requested for community health centers, rural health insurance, higher-education grants, education aid, job training and low-income heating assistance. Nor is he likely to accept the new transportation and housing bill.

Republican leaders vowed to round up enough votes to sustain Bush’s domestic-spending vetoes, though they acknowledged that many Republicans will probably break with the White House. The domestic-spending bill passed 274 to 141, with the support of 51 Republicans, just three votes short of a veto-proof tally.

The contrast was not lost on Democrats, who promised to highlight the White House’s willingness to spend billions of dollars on a war abroad every time Bush and Republicans object to any spending at home.

“He somehow has disassociated himself from the amounts he’s spending overseas,” said Sen. Barbara Boxer, D-Calif. “We cannot overlook the needs of our country. We are a generous and decent and good people. Our people need help as well.”

The Senate’s veto-override vote on the water bill included 34 Republicans who abandoned the president. Just 12 stood by him. The Senate vote followed one in the House, which rejected the veto on Tuesday, 361 to 54. Both tallies were more than the two-thirds majorities needed to overcome Bush’s disapproval.

“We have said today as a Congress to this president, “You can’t just keep rolling over us like this. You can’t make everything a fight, because we’ll see it through,’ ” said Boxer, chairman of the Senate Committee on Environment and Public Works and a primary architect of the legislation.

Thursday’s action was the 107th override of a presidential veto in the nation’s history. Congress overrode two of Bill Clinton’s 22 vetoes and just one of George H.W. Bush’s 44. At the other end of the spectrum, Gerald Ford, who vetoed 66 bills, and Harry Truman, who vetoed 250, each had 12 overridden, the most of any president besides Andrew Johnson.

Both parties sounded a discordant note on fiscal rectitude Thursday. House Democratic leaders – defending a tax measure, scheduled to come to a vote Friday, that contains offsetting tax increases, largely for Wall Street titans – contended that theirs is the party of fiscal responsibility, even as they were pushing through some of the largest domestic spending increases in years.

“We are making the hard decisions that Republicans refused to make, and continue to refuse to make,” said House Majority Leader Steny Hoyer, D-Md.

Republicans said theirs is the party of small government and austerity, even as they abandoned the White House in droves to push through a water bill that, if fully funded, would build more than 900 projects that would cost a total of $38 billion, according to the White House.

“Sadly, because the authors of this bill have rained a few earmarks to every member’s district, Congress didn’t have the courage to stop this reckless overspending,” said Sen. Jim DeMint, R-S.C., whose dissent on the measure was a lonely one.

The water bill authorizes billions of dollars in coastal restoration, river navigation and dredging projects; levee and port construction; and other Army Corps of Engineers public works efforts. Seven years in the making, the measure took on particular political resonance in the aftermath of Hurricane Katrina, as Gulf Coast lawmakers secured nearly $2 billion in restoration and levee construction projects for the region.

The bill also authorizes the continuation of projects such as the restoration of the Everglades and the dredging of the upper Mississippi River, while expanding oversight of the Army Corps.

The measure authorizes $30 million to reduce nitrogen flowing from the Washington area’s Blue Plains sewage-treatment plant into the Chesapeake Bay. It also authorizes $40 million for other Chesapeake Bay pollution-reduction projects.

An additional $192 million is authorized for the expansion of the bay’s Poplar Island project, which involves rebuilding the island with dredged material from the channels serving the Port of Baltimore. The measure includes a $30 million increase for Chesapeake oyster restoration and an additional $20 million for other environmental protection projects for the bay.

Steve Ellis, vice president of Taxpayers for Common Sense and a longtime critic of water measures, said in a statement that the legislation has “more pork than a Carolina BBQ joint, with millions going to water project slush funds nationwide, millions more for pumping sand on beaches to protect vacation homes and navigation boondoggles.”

But the law merely authorizes such projects. Lawmakers backing the projects must now secure funding through the House and Senate appropriations committees, with no guarantees. Senate Republicans repeatedly justified their votes Thursday by saying that the law does not actually spend a cent, but Boxer made it clear that the authorizations would speed the allocation of funds.

That was a point on which the White House agreed.

“Even though authorizations don’t actually spend money, they say something about priority setting, and making tough decisions, which is what all good budgeting is about,” said White House spokesman Tony Fratto. He added, however, that Republican lawmakers “have been very clear on appropriations, and I think they’ll hold strong.”