Ok, lets look at his from a purely political perspective. Put aside what is the right thing to do (for now). Put aside what the Democratic base wants. Lets look at the Iraq funding issue purely from the perspective of what will get Democrats re-elected.
The country is conflicted over Iraq. Clearly the mood is that we never should have invaded and to bring the troops home. But at the same time, the country does not want to admit defeat and is afraid of how much worse Iraq will be if we leave. And all of these are understandable emotions.
So politically congress needs to pass an Iraq funding bill. Doing nothing will not fly. Forcing an immediate withdrawal would be a political death sentence for many many many in congress (remember, this discussion is political expediency only).
But giving Bush a blank check is not popular either. It's not a political death sentence (at least for Democrats). But it won't be popular either. Especially when you have to measure it's effect not today but in the fall of 2008. At the speed that the Iraq war is becoming a larger and larger disaster in people's minds, a blank check vote now is bad news.
So here's the interesting question. What if congress keeps passing bills with timetables, benchmarks, etc and keeps sending them to Bush. And he keeps vetoing them. How does he sell that the problem is congress if they keep giving him bills with "reasonable" restrictions and he keeps vetoing them?
It will be impossible for him to lay blame on congress if they keep giving him bills and he keeps vetoing them. Congress can turn the argument around that they have passed the funding and Bush refuses to accept it and deliver it to the troops. It will put the Republicans in an almost impossible political position if Bush continues to veto bills. To the point that either you get a veto override or Bush accepts one.
What is key to this is that Congress must do two things. First, as the deadline approaches they must continuously hammering out new bills and passing them. If it gets real close or goes past the point where the military has to start cutting back, they can go into 24/7 session - no adjournment until they pass a bill that is accepted or the veto overridden. Think of the picture of Congress in session at 3:00 am trying to work out a good compromise while Bush complains - he loses that battle.
Second, each bill must be substantially different and must have real restrictions in it. The substantially different gives Congress the argument that they are trying and compromising. The real restrictions put Bush in a bind and are what the country wants to see happen. That will give the Democrats something to proudly run on in '08. (One suggestion to add - include taxes to pay for the funding.)
Too many people have bought Bush's argument that an acceptable bill must be passed in time. That not doing so will be a political loser. I think there is a much stronger argument that Congress continuing to clearly work for a good compromise, and offering bill after bill, is a much better political tactic for the Democrats.
It also is the right thing to do. But that's not part of this discussion...