By Patricia Zengerle
WASHINGTON (Reuters) - After months of wrangling, U.S. lawmakers unveiled a compromise version of the annual $612 billion defense authorization bill on Tuesday, but the measure includes funding provisions that anger Democrats and could prompt a veto by President Barack Obama.
Only two Senate Democrats and one from the House of Representatives on the conference committee that negotiated the bill signed it. Democrats object to the use of $90 billion in special war funds to allow the Department of Defense to avoid mandatory "sequestration" budget cuts.
Obama and his fellow Democrats argue that Congress should scrap the cuts for domestic programs as well as defense, and call on Republicans to negotiate a broad budget agreement.
Republicans argue that Democrats are holding national security hostage to protect irresponsible spending.
The proposed 2016 National Defense Authorization Act tightens restrictions on transferring inmates from the Guantanamo Bay detention center in Cuba, even as Obama seeks to close the controversial facility before leaving office.
The bill preserves a ban on transfers to the United States, and adds a requirement that the defense secretary certify any transfer elsewhere is in the interest of U.S. security.
It also bans transfers to Yemen, Libya, Somalia and Syria and calls for Obama to send Congress a plan for the prison.
"If the administration complains about the provisions on Guantanamo, then it's their fault because they never came forward with a plan," said Senator John McCain, the Republican chairman of the Senate Armed Services Committee.
The bill includes another $600 million to train and equip Syrian rebels, but specifies that the administration must get special approval for each outlay of funds.
The legislation also includes a ban on torture, and authorizes the provision of defensive weapons to Ukraine as it faces aggression from Russia.
And it provides a small raise for U.S. troops and authorization for weapons, aircraft and other military equipment, as well as some cost cuts.
The compromise addresses 874 differences between the House and Senate versions of the bill.
Members of Congress pride themselves on having passed the National Defense Authorization Act for 53 straight years, but that streak could end this year if Obama uses his veto power.
Mac Thornberry, the Republican chairman of the House Armed Services Committee, said he did not know what would happen.
"He'd be foolish to veto it, but I can't promise you he's not going to be foolish," Thornberry said.
The first votes are expected later this week.