WASHINGTON (Reuters) – The Trump administration’s budget proposal would convert some of the United States’ foreign military grants into loans, as part of a larger effort to cut diplomatic spending by more than 29% , aid and programs abroad, the White House said on Monday.

FILE PHOTO – President Donald Trump’s Fiscal 2018 budget is printed at the Government Publishing Office in Washington, United States on May 19, 2017. REUTERS / Yuri Gripas / File Photo

Cuts to State Department programs are in part intended to fund increased military spending.

White House budget documents showed total defense spending for fiscal 2018 was $ 603 billion, about 3% more than President Barack Obama’s proposed defense budget for the fiscal year. 2018.

The $ 603 billion includes funding for the Department of Energy’s nuclear weapons programs and other national defense programs as well as the Department of Defense.

The Pentagon’s specific defense request stands at $ 574.5 billion, an increase of 4.6% over fiscal year 2017.

According to President Donald Trump’s proposal, the United States would spend 29.1% less on the State Department and “other international programs” in fiscal 2018 compared to 2017, a decrease of 11, $ 5 billion.

This decrease includes an overhaul of the way some countries receive military aid from the United States. Foreign military funding provides countries with loans or grants to purchase US military equipment.

The State Department decides which countries receive the funding while the Pentagon executes the decisions. Under the Trump proposal, many current grants would instead be converted into loans.

“We are changing some foreign military programs from direct grants to loans,” Mick Mulvaney, director of the White House’s Office of Management and Budget, said in a briefing with reporters Monday. “Our argument was that instead of… giving someone $ 100 million, we could give them a smaller number of loan guarantees and they could actually buy more stuff.”

Military aid to Israel and Egypt, two close US allies in the Middle East and the largest recipients of US military aid, will remain unchanged, Mulvaney said.

The Wall Street Journal, which first reported on the proposal, said foreign military subsidies could affect Pakistan, Tunisia, Lebanon, Ukraine, Colombia, the Philippines and Vietnam.

U.S. military aid to partners and allies reached $ 13.5 billion in 2015, or 28 percent of all U.S. foreign aid spending that year, according to the Congressional Research Service. Most of the Foreign Military Funding Program (FMF) grants go to Israel, Egypt, Jordan, Pakistan, and Iraq.

Congress ultimately controls the government’s purse strings and may reject some or more of the Trump administration’s proposals. Republicans and Democrats in Congress have criticized the scale of the cuts to the State Department and the US Agency for International Development.

Mulvaney said aid to Pakistan would be cut, but did not give concrete details.

“(The) state (department) still has some flexibility to come up with a final plan on this, but I know that overall we have proposed moving several countries from a direct grant program to one. loan guarantee program, ”he said. .

POTENTIAL STRAIN FOR SMALL COUNTRIES

Todd Harrison, defense budget analyst at the Center for Strategic and Budgetary Assessments, said the shift from grants to loans for military aid could mean countries will not be able to afford to purchase U.S. military hardware. forcing them to go elsewhere to stock up.

“Countries can buy from China or Russia. They have other places to shop, and one of the ways we’re building capacity with our partners is through these grants, ”said Harrison. “It’s in our best interests to have interoperability with our allies, and these military grants are part of that.”

Thomas Spoehr, who heads the Center for National Defense of the Conservative Heritage Foundation, said converting grants into loans will be a challenge, especially for small countries receiving military aid like Macedonia and Tunisia.

But “this is a proposal whose time has come,” Spoehr said, given US budget deficits and high military spending overall.

“It’s probably a prudent place to make cuts considering all the other investments we’re making in national defense,” Spoehr said.

Additional reports from Idrees Ali; Editing by Yara Bayoumy and Cynthia Osterman



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