Say this to your DH. "DH at 8:00pm on the 3rd, I'd like to have a discussion about the kids". This will show him it's important to you and thought out. It'll also eat at him a little bit as wondering what your conversation will hold. Best to have conversations without emotions being involved. Don't ignore him up until then, act loving & then on the 3rd state your case like a professional.
Explain to him spanking isn't a form of punishment you agree with. Write down alternatives to spanking 1) taking a toy away, 2) timeouts, 3) not going to do a fun activity. 4) Counting has done wonders for my son.
Ask him if he has other forms of discipline that you both would consider. Tell him if the spanking needs to continue in his opinion, it's obviously not working & he will need to attend a parenting class to give him other avenues of punishment. Look one up(parenting class) & have the dates/time written down prior to the 3rd. I write everything down prior to a meeting like this so I don't & he won't go off track. Keep it strictly focused on the spanking topic only. Don't go off topic.
Now as you say you "baby" your daughter, do you parent out of guilt? That's not the best way to parent, but I have done it many times myself. Address(to yourself) why you feel bad for her. What do you feel guilty about? Remember you are preparing this little girl for the world. You want her to have personal boundaries & respect for herself. If she has no boundaries from you, she won't have them for herself. I know you love her because you're here asking for information about making her life better. I remember a few motherly sayings, "A Mother is not a person to Lean on but a person to make leaning unnecessary." Try & remember you can shape her for only a little while & then the world gets her. You're a good mom & she sounds like a lucky little girl. Just a few things to work on, just like the rest of us. Also, I think you're very gracious in allowing your daughter to love her Dad "very much". I've seen many times where a child doesn't feel comfortable loving the other parent. You're a very good Mom to encourage the love between your daughter and her Dad. She may be more defiant when coming home from Dads. The rules are probably not difficult to follow there & he sees her briefly so discipline isn't needed. Give her time to adjust after getting home & let her debrief.
Also, your DH may love your son more. If roles were reversed you would probably love your biological child more than a stepchild. That doesn't mean he should show it though. Rules are to be equal. Good luck & hang in there! Parenting is tough & even tougher with blended families.

While I do not think your husband should be able to spank your DD, YOU need to step up to the plate and make it clear to her that her poor behaviour is unacceptable. You are not doing her any favours letting her get away with bad behaviour because "you feel bad for her". Maybe she doesn't get as much time with her Dad as she'd like. That's sad, and it's unfair, but, life IS unfair and she needs to learn to deal with her disappointment in a more appropriate way. Is there any way she can spend more time with her Dad?

I would like to thank you ladies for your input on my delema. I have never really gone online and joined a blog before and I have to say it makes me feel better to talk about my problems and read some good advise. I do need to sit down with my husband and discuss how to disipline my daughter and son. My ex makes up excuses for not spending more time with my daughter. I need to stop hiding behind feeling sorry for her. She is lucky to have my husband, my son, and me in here life regardless if her Bio. father isn't. My husband does try really hard to be a good step dad. He plays with her, talks to her about her day, etc. It's just a little hard sometimes. Life is hard and me and my little family are there for each other. Again, thanks.

If the problems seem to get worse right after she gets back from her Dad, can you plan out some "decompression" time. Maybe a little time alone with you?

IMHO Spanking is never productive. It teaches children whomever is bigger and stronger wins.