Trump wants US grant to Pakistan to be converted into loan

WASHINGTON – The US President Donald Trump administration’s budget 2017-18 proposal would reportedly convert the United States’ foreign military grants for Pakistan to loans. The proposal also includes a number of US allies including Pakistan. The administration has left it for the State Department to take a final call on the issue. “We do change a couple of the foreign military programs from direct grants to loans,” said Mick Mulvaney, the director of the White House Office of Management and Budget, in a briefing with reporters on Monday.

“Our argument was instead of … giving somebody $100 million, we could give them a smaller number worth of loan guarantees and they could actually buy more stuff.” Mulvaney said that aid to Pakistan would be reduced, though he did not give concrete details.

Under President Donald Trump’s proposal, the United States would spend 29.1 percent less on the State Department and “other international programs” in the 2018 fiscal year compared to 2017, a decrease of $11.5 billion.

That decrease includes a re-shaping of the way some countries receive military aid from the United States. Foreign military financing gives countries loans or grants to buy U.S. military equipment.

The State Department decides which countries are given the financing while the Pentagon executes the decisions. Under the Trump proposal, many current grants would instead be converted to loans.

The White House budget documents showed total defense spending for the 2018 fiscal year at $603 billion, about 3 percent higher than President Barack Obama’s proposed 2018 fiscal year defense budget.

The $603 billion includes funding for nuclear weapons programs at the Department of Energy and other national defense programs as well as the Department of Defense. The Pentagon’s specific defense request is for $574.5 billion, an increase of 4.6 percent compared to the fiscal year 2017.

Military aid to Israel and Egypt, two close U.S. allies in the Middle East and the biggest recipients of U.S. military assistance, will remain unchanged, Mulvaney said.

The Wall Street Journal, which first reported the proposal, said the foreign military grants could affect Pakistan, Tunisia, Lebanon, Ukraine, Colombia, the Philippines and Vietnam. U.S. military assistance 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 grants through the Foreign Military Financing (FMF) program go to Israel, Egypt, Jordan, Pakistan and Iraq.

Congress ultimately controls the government purse strings and may reject some or many of the Trump administration’s proposals.

Republicans and Democrats in Congress have criticized the size of the cuts to the State Department and U.S. Agency for International Development.

“(The) State (Department) still has some flexibility to come up with a final plan on that, but I do know that writ large we have proposed to move several countries from a direct grant program to a loan guarantee program,” Mick said.


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