House Democratic leaders met Thursday afternoon to discuss a way forward on the war supplemental, but for now, they are keeping mum on whether any deal has been struck with Blue Dog Democrats on offsetting the costs of expanded GI benefits in the bill.

Speaker Nancy Pelosi (D-Calif.), House Majority Leader Steny Hoyer (D-Md.) and House Appropriations Chairman David Obey (D-Wis.) met behind closed doors Thursday afternoon to discuss how to advance the supplemental, aides said.

In addition, Pelosi and Hoyer “had talks with Blue Dogs” on the House floor over the course of the day, including with Blue Dog co-Chairman Allen Boyd (D-Fla.), said a senior Democratic aide.

A Hoyer aide declined to say whether House leaders have agreed to a proposal by fiscally conservative members of their caucus: include offsets for the $52 billion cost of expanded GI benefits in exchange for Blue Dogs voting for the supplemental.

From there, the House could then punt the issue to the Senate, which would be left in the uncomfortable position of having to vote against expanded veterans benefits because of their opposition to the offsets attached to them.

In a sign that there is no deal, a Blue Dog spokeswoman said she was unaware that party leaders had even met in the afternoon.

Earlier Thursday, Hoyer said he is “reasonably confident” that the supplemental will be on the floor next week.

Hoyer said he hoped it would be “earlier rather than later” in the week, but that it remains up in the air for now as Obey continues working with the Senate and White House on pay-as-you-go budget issues.

While the House must abide by revenue-neutral, PAYGO rules, the Senate lacks the votes to offset the costs of domestic spending in the bill. Meanwhile, Bush has vowed to veto anything other than a clean war spending bill.

“We are currently trying to figure out what to do on that issue,” the Majority Leader said.