The Senate Appropriations Committee had included the funds for Israel's system in a bill that would have given Obama $2.7 billion to deal with an influx of tens of thousands of undocumented Central American children across the border with Mexico.
But the funding bill stalled until at least September when it failed to clear a procedural hurdle by a vote of 50-44, 10 short of the 60 needed. Republicans objected to the cost of the measure.
Democratic and Republican members of Congress scrambled Tuesday to seal a $225 million boost to Iron Dome before they broke this week for a month-long recess.
As the Gaza war escalates, Israel is proving to be among the few subjects uniting lawmakers. Members of both parties have introduced legislation backing the Jewish state, condemning the Palestinian militant group Hamas and seeking a tougher Iran policy. Iron Dome is the priority, but the House and Senate were at odds over the process.
Republicans and Democrats were clashing over whether to approve the funds in a larger spending bill or separately, though no one publicly opposes the payments. Senate appropriators already have approved doubling next year's money for the system.
Whereas the Obama administration and lawmakers agree on Iron Dome, other actions in Congress are more contentious.
Until Monday, Sen. Ted Cruz was hindering the appointment of several US ambassadors to key allies by vowing to block all State Department nominees awaiting confirmation.
The Texas Republican said he was releasing his holds after the Federal Aviation Administration answered his questions about its 36-hour ban last week on US airline flights to Israel. Cruz had claimed the prohibition was an "economic boycott" of Israel to pressure it into a cease-fire with the Palestinian terrorists group Hamas.
In a letter last week to Obama, Democratic Sens. Chuck Schumer and Ben Cardin, and Republican Sen. Lindsey Graham, said a cease-fire must eliminate Hamas' ability to fire rockets into Israel and place no restrictions on the Jewish state.
"Israel must be allowed to take any actions necessary to remove those threats," the senators wrote - a position that presaged by two days the Israeli government's unanimous rejection of Secretary of State John Kerry's cease-fire proposal last Friday.
Reuters and AP contributed to this report