In the face of stiff opposition from powerful fellow Democrats, House Speaker Nancy Pelosi (Calif.) has abandoned a proposal she supported less than 24 hours ago to eliminate lawmakers’ earmarks from the omnibus spending package.

The House Democrats’ tentative plan is to finalize the package for passage in the next day or so, said sources.

By leaving earmarks largely untouched and agreeing to Bush’s budget ceiling, Democrats have capitulated in their spending battle with Republicans. In the end, Democrats realized they would not be able to muster enough Republican votes to override Bush’s veto. The president vowed to reject any spending package that exceeded the $933 billion limit he set.

The good news for Democrats is that this move takes them significantly closer to enacting into law their spending priorities on a range of domestic issues.

“We are going to meet our national priorities long ignored by Republicans and the Bush administration,” said Pelosi spokesman Nadeam Elshami.       

As recently as Tuesday afternoon, Pelosi endorsed House Appropriations Committee Chairman David Obey’s (D-Wis.) proposal to yank all earmarks from the omnibus in order to save an estimated $9.5 billion. The money would have been used to minimize cuts to domestic programs important to Democrats.

When asked Tuesday afternoon if Obey’s plan was off the table, Pelosi replied: “Not from my standpoint.”

Walking into a meeting between the Democratic Senate and House leaderships, Pelosi said she thought Obey’s plan was “great.”  

A Democratic aide also said Tuesday that Pelosi supported the proposal to eliminate earmarks.

Pelosi, however, ran into stiff opposition from her Senate counterpart, Majority Leader Harry Reid (D-Nev.), who served as the senior Democrat on the Senate Appropriations Energy and Water Development Subcommittee before becoming Senate Democratic leader.

The Nevada senator declined to endorse Obey’s proposal when asked about it at a press conference Tuesday.

Reid said he would be happy to hear what Obey had to say but also defended his right as a lawmaker to earmark funds for his home state.

“Without getting into a lot of detail, I really am focused on the Congress. I think we have equal say as to what should be spent in our states. I think that I have as much right — in fact, far more, because I know more — than Jim Nussle has to determine what money should be spent in the state of Nevada,” he said, referring to the director of the White House Office of Management and Budget. “This should not all come from the White House.”

Pelosi also faced strong opposition from the Democratic chairmen of the House Appropriations subcommittees, who in some cases had been waiting through 12 years of Republican control to finally wield a gavel on spending decisions.

Pelosi assuaged their concerns Wednesday morning by informing them that earmarks would not be cut and spending would be pared to the president’s levels to smooth the way for the omnibus to pass. Many government programs have had to subsist on a year-long stopgap spending measure because Congress failed to pass a slew of spending bills in 2006 and many lawmakers want to avoid that from happening again.