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by Matthew Hay Brown

The battle over the 2008 budget ended today aboard Air Force One, where President Bush grudgingly signed the $555 billion omnibus spending bill passed last week by Congress – while suggesting that he was still looking for areas to cut.

“This legislation contains certain provisions similar to those found in prior appropriations bills passed by the Congress that might be construed to be inconsistent with my Constitutional responsibilities,” Bush said in a statement issued this afternoon by the White House. “To avoid such potential infirmities, the executive branch will interpret and construe such provisions in the same manner as I have previously stated in regard to similar provisions.”

Bush said he was “disappointed” by the nearly 9,800 lawmaker earmarks that added more than $10 billion to the federal budget. “These projects are not funded through a merit-based process and provide a vehicle for wasteful Government spending,” he said.

But he also said that the legislation would fund the federal government “within the reasonable and responsible spending levels I proposed – without raising taxes and without the most objectionable policy changes considered by Congress.”

The omnibus comprises the 11 outstanding spending bills plus some of the money Bush requested for the wars in Iraq and Afghanistan. Congressional Democrats had sought to condition war funding on the withdrawal of combat troops from Iraq, but were unable to muster the necessary votes.

Bush now gets the partial funding with no strings attached. He said Congress should “quickly take action next year to provide the remainder of the funding needed by our troops.”

The legislation ends a months-long dispute between the White House and congressional Democrats over spending levels and budget priorities. After Bush threatened to veto a congressional package that came in at $22 billion more than he requested, Democrats met his bottom line by shifting billions from defense, foreign aid and military base realignment to education, health care, heating assistance and local police.

Bush said there “is still more to be done to rein in Government spending.”

“In February I will submit my budget proposal for fiscal year 2009, which will once again restrain spending, keep taxes low, and continue us on a path towards a balanced budget,” he said. “I look forward to working with the Congress in the coming year to ensure taxpayer dollars are spent wisely.”

The omnibus bill was one of 15 signed by Bush as he traveled to his ranch in Crawford, Texas. Others included the one-year patch for the Alternative Minimum Tax, without the offsets that Democrats had wanted, and the reauthorization of the Terrorism Risk Insurance Program through 2014.