WASHINGTON (Reuters) - Despite White House objections, the U.S. Congress approved more than $3 billion in aid for airlines still reeling since the Sept. 11 attacks and facing more losses due to war in Iraq.

A $3.2 billion plan in the House of Representatives and a $3.5 billion proposal in the Senate cleared the respective chambers easily late Thursday as components of separate legislation for Iraq war spending.

The Bush administration called the price tag of each plan excessive, and was expected to push its views on negotiators from each house who now will decide the scope of assistance.

"We'll work together to arrive at a good solution in conference," White House spokesman Ari Fleischer said. Those negotiations will begin next week.

Key Bush administration officials say struggling airlines should cut more costs and further restructure their operations, rather than seek government help.

The nation's major airlines have appealed to the government for a second round of blockbuster assistance since the 2001 hijack attacks transformed an industry slowdown into the worst-ever downturn.

Congress granted airlines $5 billion in direct aid and up to $10 billion in loan guarantees to offset losses caused by the attacks.

Last month, the biggest carriers sought relief from taxes and fees as well as help with meeting insurance premiums and security costs. They said without help, war in Iraq could drive 2003 losses to nearly $11 billion.

But the White House said claims of a financial catastrophe due to war have not materialized. The industry countered that assessment with figures showing a sharp drop in traffic last week and dire projections for April.

Despite intense lobbying from politically powerful airlines, the White House had some allies on Capitol Hill.

"We are creating, unless we change this process, an Amtrak in the air," warned Arizona Republican Rep. Jeff Flake, referring to the money-losing passenger railroad that depends on government funding for its survival.

But Flake withdrew a proposal to pare the House package by more than $2 billion after extracting a promise from the Republican leadership to promptly take a closer look at the industry's systematic financial problems.

Kentucky Republican Rep. Anne Northup said administration officials indicated to her that they favored spending roughly $900 million in airline aid now. But the congressional leadership wanted to do more.

House Speaker Dennis Hastert told reporters the White House could "second guess" the plan he helped draft, but noted the administration never made an aid proposal in the first place.

"It's just getting them through this tough time, that we don't have a whole industry collapse at a time when maybe we need it most," Hastert said.

Both chambers have made part or all of the aid conditional on limiting the pay of top airline executives. Some lawmakers were irate when it was disclosed that airline chief executives collected millions of dollars in compensation in 2002 while cutting thousands of jobs and flights.

But Delta Air Lines (DAL: Research, Estimates) CEO Leo Mullin, one of the best paid in the industry, said before the congressional votes Thursday that he would voluntarily cut his projected compensation for 2003 by roughly $9 million, according to an internal company memo obtained by Reuters. Earlier in the week Don Carty, CEO of American Airlines parent AMR Corp. (AMR: Research, Estimates), agreed to take a 33 percent pay cut and not accept a bonus for a third consecutive year, after getting tentative agreements on concession labor packages from the airline's union leadership.

While the two plans offered roughly the same amount in aid, they were structured differently and negotiators will have to sort out what type of help to give.

For instance, both plans would suspend certain fees for aviation security for six months, saving the carriers $900 million. But the House offers a retroactive fee reimbursement to significantly boost the amount of money each airline would receive.

Hastert represents Illinois, the home of bankrupt United Airlines, which desperately needs cash. The House plan would better suit that company's needs than the Senate proposal.

A big-ticket component of the Senate package would freeze premiums for high-end liability insurance, extend unemployment benefits for out-of-work airline employees, and reimburse airports for some security expenses.