Washington — House and Senate negotiators have agreed on a $612 billion defense policy bill that maintains restrictions on transferring terror suspects from Guantanamo Bay, Cuba, and challenges the administration on the budget, drawing a veto threat from President Barack Obama.

The bill gives Obama the increase in funding he requested, but he's unhappy with the way lawmakers did it. The legislation authorizes an increase in defense spending by padding a war-fighting account that's not subject to limits Congress has imposed on military and domestic spending.

The measure would retain current restrictions on transferring detainees out of the U.S. military prison at Guantanamo Bay, Cuba, that have been in place since at least 2009 and presses the White House to send Congress a plan on how it plans to continue housing detainees now and in the future.

Closing the prison is one of Obama's top goals, yet he has not yet sent Congress a plan on how to shut it down.

"There is still no plan on what to do and how to do it with the detainees at Guantanamo Bay," said Sen. John McCain, R-Ariz., chairman of the Senate Armed Services Committee. "If the administration complains about the provisions concerning Guantanamo, then it's their fault because they never came forward with a plan."

Among other things, the massive bill offers a 1.3 percent pay increase to service members and authorizes funds for ships, aircraft and weapon systems. It calls for government matching funds to new 401(k)-type plans, replacing a system that doesn't leave retiring troops with anything unless they serve 20 years. It authorizes money to provide weapons for Ukraine forces fighting Russian-backed rebels.

The bill extends the ban on torture to the CIA, a provision that pleased McCain, a prisoner of war during the Vietnam War.

"I'm glad the United States of America will never again to be able to do things that they did before, which was such a terrible stain on our national honor," McCain said.

Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee, said the bill also instructs the Defense Department to come up with a policy that would give more flexibility to commanders at military installations on whether personnel can carry government-issued or personal weapons on site.

McCain and Thornberry both acknowledged that the legislation does not solve the spending problems. But McCain insisted that is a budget fight that should not be fought on his legislation.

"I don't think we can wait till December to pass a defense authorization bill," said Thornberry. "I'm hopeful that we can pass this bill and I'm hopeful that the president will agree to it."

He said the House would vote on the bill Thursday. The Senate is scheduled to vote Wednesday.

The defense policy bill is one of the few bipartisan measures that Congress has cleared and the president has signed into law for more than a half-century. But this year's bill faces a legitimate threat of a presidential veto.

Neither Washington state Rep. Adam Smith nor Rhode Island Sen. Jack Reed, the top Democrats on the defense committees, signed the conference report of the final bill.

"This bill will exacerbate budgetary dysfunction and hamper our military at a time when it desperately needs reliable support," Smith said. "Band-Aids and budget tricks will no longer work. We must address the root causes of the problem. We must eliminate sequestration and enact a long-term, comprehensive budget deal."

He said the bill falls far short on other issues.

"This bill perpetuates the existence of the detention facility at Guantanamo Bay, which continues to serve as propaganda for extremists and undermine our moral standing in the world. It is also unnecessary and excessively expensive, costing millions per detainee," Smith said.