<font color=brown> I can't believe Cheney is insisting on grants? Is he looking for more work for HAL? <font color=black>
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washingtonpost.com
Senators Want Part of Iraq Aid Treated as Loan
Bipartisan Group Cites Country's Oil, Foreign Debt
By Jonathan Weisman
Washington Post Staff Writer
Thursday, October 16, 2003; Page A06
Several Republican and Democratic senators are drafting legislation that would convert half of President Bush's $20.3 billion reconstruction request for Iraq into a loan unless Saddam Hussein's international creditors forgive nearly all of Iraq's foreign debt.
The legislation, which the senators hope to attach to the president's $87 billion Iraq and Afghanistan spending bill as early as today, poses a serious challenge to the administration, which has fought fiercely to keep all the money a straightforward grant. For weeks, several senators from both parties have argued that at least some of the reconstruction funds should be considered loans, to be underwritten by Iraqi oil. Until yesterday, however, that sentiment was balkanized among competing approaches to the issue.
Now, as many as 10 Republicans and most of the Senate's 48 Democrats are rallying around a single approach, the amendment's drafters say.
"I just have a hard time going back to South Carolina and telling people who are losing their jobs that we need to give $20 billion of their money to the Iraqi people who are sitting on a sea of oil," said Sen. Lindsey O. Graham (R-S.C.), who has not been swayed by intense White House lobbying.
The issue could be settled today. The House is set to pass virtually all of the Bush request tonight, with no loan provision, but the Senate still hangs in the balance.
"These are going to be close votes," said Mitch McConnell (R-Ky.), the Senate's Republican whip.
McConnell said the White House has shown no inclination to compromise on the issue. Vice President Cheney and Secretary of State Colin L. Powell had lunch with Republican senators yesterday, handing out laminated talking points in favor of their $87 billion request -- none of it in loans -- and pressing balking senators to step in line. On Tuesday, Bush summoned a bipartisan group of senators to the White House to argue that the loan proposals would undermine his efforts to persuade other countries to pledge aid to Iraq.
After that lobbying, two early loan proponents, Sens. Arlen Specter (R-Pa.) and Kay Bailey Hutchison (R-Tex.), are now wavering. Specter, alluding to the 2001 terrorist attacks in New York and on the Pentagon, said Bush displayed "a note of intensity that I haven't seen since two days after 9/11, when he said he wouldn't send a million-dollar missile into an empty tent."
Countering that pressure is stiff opposition from many Americans, much of it orchestrated by the antiwar groups Win Without War and MoveOn.org, but some of it fueled by resentment of foreign aid in general, senators said. By noon yesterday, Sen. Bob Graham (D-Fla.) said calls to his office totaled 10 in favor of the Bush request and 560 against. MoveOn has been running TV ads, asking, "If there's money for Iraq, why isn't there money for America? The truth is, we're not being led. We're being misled."
Constituents have been delivering a message, said Sen. Saxby Chambliss (R-Ga.), who backs the loan amendment. "It's a no-brainer back home," he said.
The amendment -- crafted largely by Chambliss, Lindsey Graham, Susan Collins (R-Maine), Olympia J. Snowe (R-Maine), John Ensign (R-Nev.), Ben Nelson (D-Neb.) and Evan Bayh (D-Ind.) -- would declare $10 billion in reconstruction funds a loan, to be forgiven if 90 percent of Iraq's prewar debt is forgiven.
Iraq's foreign debt held by governments is estimated at $100 billion to $130 billion. Saudi Arabia holds most of it, but other creditors include Russia, France and Germany. Bayh said the amendment would not apply to the $200 billion owed to Kuwait and Saudi Arabia as reparations for the damage done by the 1990 Iraq invasion of Kuwait, which triggered the Persian Gulf War, but that the amendment would include language encouraging the forgiveness of that debt as well.
House and Senate members fear that U.S. grants to Iraq would indirectly be used to repay the debt incurred by the ousted government of Hussein, by freeing up money that would otherwise have been used for the country's reconstruction.
The Senate approved by voice vote yesterday an Ensign amendment that would reduce U.S. aid by a dollar for every dollar of Iraq's foreign debt that is paid off by Iraqi authorities.
If the United States joins the group of creditor nations, it would gain more access to negotiations over the dispensation of Iraq's debt, loan proponents say. And if Iraqis understand that the money will have to be repaid, they will have more incentive to spend it wisely, Chambliss noted. "The Iraqi people ought to have some ownership in the investment in their country," he said.
© 2003 The Washington Post Company
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