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Middle East

Congress nixes loans to Iraq, Afghanistan

| Thursday, Oct. 30, 2003

WASHINGTON (AP) -- In a victory for the White House, congressional negotiators agreed Wednesday not to include loans in an $87 billion package for Iraq and Afghanistan.

House-Senate conferees were close to finalizing details of a package that will resemble President Bush's proposal to pay for military operations and rebuilding costs in the two countries next year.

But both Republicans and Democrats expressed frustration over what they described as the White House's disdainful treatment of Congress on Iraq.

"You bump up to a degree of arrogance over and over," said Rep. Frank Wolf, a Virginia Republican.

Rep. David Obey of Wisconsin, the top Democrat on the House Appropriations Committee, said, "It is an act of considerable statesmanship for a lot of people in this place to continue to support what the president is trying to do in Iraq given the smidgen of information we're getting in return."

But Republicans, including Wolf, rejected a Democratic proposal that would have required Senate confirmation for Bush's civilian administrator in Iraq, the position held by L. Paul Bremer. Sen. Pete Domenici, a New Mexico Republican, rejected Democratic claims that this would make the administration more accountable.

"I'm not at all sure that the American people equate accountability with confirmation by the United States Senate," he said.

The loan issue was the most divisive item as the House and Senate tried to resolve differences between their versions of the bill. A Senate amendment, passed with bipartisan support, would have required Iraq to pay back about half of the $18.4 billion in the bill for reconstruction and Iraqi security forces.

Loan supporters said U.S. taxpayers are already spending plenty on Iraq and that the country's vast oil reserves should enable it to pay back some of the money eventually. Under the Senate bill, Iraq would not have had to repay the loan if other countries forgave 90 percent of the debt Iraq ran up under toppled leader Saddam Hussein.

Yesterday, World Bank President James Wolfensohn called on the United States and other rich nations to forgive at least two-thirds of Iraq's foreign debt.

Bush threatened to veto the bill if the loan provisions were included. He and congressional Republican leaders argued that Iraq was already too deeply in debt to borrow more money and that there was no Iraqi government with the authority to take on new loans.

Domenici said the grants are needed to quickly improve conditions in Iraq and get U.S. troops home.

"America will be recompensed 50 times over if this thing gets ended and they have a strong country," he said. "This money we're arguing about will be a pittance when they become our friends in the international markets of oil."

But Obey noted that much of the new aid pledged by other nations at an international donor's conference last week was made as loans.

"It seems to me that we're asking the U.S. taxpayers to be Uncle Sucker instead of Uncle Sam," he said.

Senate conferees voted 16-13 not to insist on their loan amendment with their House counterparts. All Republicans voted no. Most were absent and their no votes were cast by proxy, including those of Sen. Sam Brownback of Kansas and Ben Nighthorse Campbell of Colorado, who had supported the loans. One Democrat, Sen. Daniel Inouye of Hawaii, also opposed the loans.

On other issues, the conferees agreed to provide $500 million to the Federal Emergency Management Agency to help it deal with recent disasters, including the California wildfires and Hurricane Isabel.

They also agreed to a pilot program to expand the military health insurance system known as Tricare to include members of the National Guard and Reserves who are unemployed or lack health insurance coverage. Activated reservists and Guard members will also be eligible for coverage for a longer period. This change will be in effect only until the budget year ends on Sept. 30, 2004.

The Pentagon had opposed the change.

"We think that's probably not the best way to compensate the reserves," its chief financial officer, Dov Zakheim said at a Pentagon news conference.

All members of the National Guard and Reserves are given military health care while on active duty, and the "overwhelming proportion" have health insurance when they're not on active duty, Zakheim said.

Senate Democratic Leader Tom Daschle of South Dakota said the expansion of Tricare "is "a very productive start," but that more needs to be done to help the National Guard and Reserves.

Conferees also agreed to provide $60 million for programs to strengthen women's rights in Afghanistan and provided $200 million for Liberia, $100 million for Jordan and $20 million for Sudan.

After the final version is ironed out, the bill will have to be considered by both the House and Senate before going to Bush for his signature.

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