House and Senate leaders agreed yesterday on surveillance legislation that could shield telecommunications companies from privacy lawsuits, handing President Bush one of the last major legislative victories he is likely to achieve.

The agreement extends the government’s ability to eavesdrop on espionage and terrorism suspects while effectively providing a legal escape hatch for AT&T, Verizon Communications and other telecom firms. They face more than 40 lawsuits that allege they violated customers’ privacy rights by helping the government conduct a warrantless spying program after the Sept. 11, 2001, attacks.

The breakthrough on the legislation came hours after the White House agreed to Democratic demands for domestic spending additions to an emergency war funding bill. Taken together, the bills — two of the last major pieces of legislation to be approved by Congress this year — suggest that Bush still wields considerable clout on national security issues but now must acquiesce to Democratic demands on favored domestic priorities to secure victory.

The war spending bill, for example, includes $162 billion for the conflicts in Iraq and Afghanistan and an additional $95 billion worth of domestic spending on programs such as unemployment insurance and higher-education benefits for veterans. Bush, who had threatened for months to veto the legislation, said he will sign it.

Leading Democrats acknowledged that the surveillance legislation is not their preferred approach, but they said their refusal in February to pass a version supported by the Bush administration paved the way for victories on other legislation, such as the war funding bill.

“When they saw that we were unified in sending that bill rather than falling for their scare tactics, I think it sent them a message,” said House Speaker Nancy Pelosi (D-Calif.). “So our leverage was increased because of our Democratic unity in both cases…”

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