The new policy, contained in guidelines issued by the National Counter-Terrorism Center and the departments of State and Homeland Security, warns that using terms like "Jihadi" or "Islamic terrorist," might alienate moderate Muslims and inadvertently build support for terrorists.

But an amendment to the 2009 Intelligence Authorization Act passed last week bans the use of any government money to promote the guidance in U.S. intelligence agencies.

The amendment, authored by U.S. Rep. Peter Hoekstra, R-Mich., was approved by a 249-180 vote. Fellow Republican Michigan Reps. Joe Knollenberg and Thaddeus McCotter supported the amendment, The Detroit News reported Wednesday, and 55 Democrats joined them, despite the opposition of the party leadership.

"I am sympathetic to the argument that if used inappropriately, the words can be counterproductive but I find that the people who are criticizing this are very short on alternatives," Hoekstra said. "So how do they want us to describe al-Qaida and what they are involved with?"

Dawud Walid, executive director of the Council on American Islamic Relations-Michigan, said there were alternatives.

"CAIR supports using terminology such as 'criminals,' 'murderers' or 'terrorists' that help isolate extremists and remove the false cloak of religiosity they use to justify their barbaric actions," he told the newspaper.