Defense Secretary Robert Gates says Congress must pass legislation within days to pay for the Iraq war, or he will direct the US Army and Marine Corps to begin developing plans to lay off employees and terminate contracts early next year. Gates met with members of Congress on Wednesday and said Thursday he does not have the money or the flexibility to move funding around to cover adequately the costs of continuing operations in Iraq and Afghanistan. "There is a misperception that this department can continue funding our troops in the field for an indefinite period of time through accounting maneuvers; that we can shuffle money around the department. This is a serious misconception," Gates told reporters at the Pentagon. As a result, he said he is faced with the undesirable task of preparing to cease operations at Army bases by mid-February and lay off about 100,000 defense department employees and an equal number of civilian contractors. A month later, he said, similar moves would have to be made by the Marines. Some members of Congress believe the Pentagon can switch enough money to cover the war accounts, Gates said. But he said he only has the flexibility to transfer about $3.7 billion, which covers the expenses of the war for just one week. Lawmakers, he said, may not understand how complicated and restrictive the situation is. On a 218-203 vote, the House of Representatives passed a $50 billion bill Wednesday that would pay for the wars but require that troops start to leave Iraq in 30 days. It sets a goal of ending combat by December 2008, as well as establishing interrogations standards that would make illegal the practice of waterboarding, which makes the person being interrogated have the sensation of drowning. The Senate planned to vote as early as Friday on the measure. The bill was expected to fall short of the 60 votes needed to advance there. The White House says President George W. Bush would veto the war spending bill. House Speaker Nancy Pelosi, a Democrat, and Senate Majority Leader Harry Reid said Thursday that if Congress is unable to pass legislation that sets a timetable on the war, which is a likely scenario, it probably will drop the issue until early next year. Until then, Democrats say the Pentagon can eat into its $471 billion annual budget without needing to take the drastic steps. "The days of a free lunch are over," said Democratic Sen. Chuck Schumer. The war bill is part of a deepening conflict between the Democratic-controlled Congress and Bush on the war and this year's spending priorities. Democrats say defense dollars should be used to bring troops home and repair the readiness of the armed forces, and more money should be directed to domestic projects. The Army's chief of staff, Gen. George Casey, said Thursday that a steady stream of money is key to ensuring that units are ready for combat. The steady deployments to Iraq and Afghanistan have left nearly half the Army's combat brigades without the proper personnel, equipment or training, he said. "Today's Army is out of balance," Casey told the Senate Armed Services Committee. "Overall, we are consuming our readiness as fast as we can build it." Testifying alongside Casey, Army Secretary Pete Geren urged lawmakers to approve the war funds. "A large organization such as ours cannot turn on a dime. ... It would have a dramatic effect," Geren said. The burden would "fall heavily on home-based troops and their families," he later added. Bush already is on track to meet the House bill's requirement that troops start coming home, as he plans in coming weeks to slowly reverse this year's troop buildup of 30,000. But the White House says setting any timetable would be detrimental to the war effort. The bill "would only partially fund our troops in Iraq and Afghanistan, but fully embolden our enemies," White House spokeswoman Dana Perino said in a statement on Wednesday.