Push is made for Iraq to repay funds

Senate panel backs $87 billion request

By Susan Milligan, Globe Staff, 10/1/2003

WASHINGTON -- A growing number of lawmakers from both parties, responding to voter concerns about the swelling costs of the US mission in Iraq, is demanding that Iraq pay back the $20.3 billion the Bush administration wants to offer the dilapidated nation in grants to rebuild and modernize.

A Senate committee yesterday unanimously approved $87 billion in new spending for postwar activities in Iraq and Afghanistan, an amount that includes the $20.3 billion in grants for construction. But Democrats and a handful of Republicans, in a rebuke to the Bush administration, said they will seek to change the grants to loans when the full Senate debates the issue this week.

The lawmakers said they are responding to increasing complaints from constituents who are resentful that scarce federal dollars are being spent abroad instead of on domestic priorities.

"I don't see why we can't structure a long-term loan to Iraq," said Senator Susan Collins, Republican of Maine, who is offering an amendment to do so despite what she called considerable pressure from the White House to drop her proposal. "At this point, it is reasonable to me to ask the Iraqis" to pay back the money.

The Bush administration remains opposed to the loan approach, arguing that it would merely add to Iraq's already huge foreign debt and might delay the construction efforts. Coalition officials are eager to restore basic services, such as water and electricity, in order to placate frustrated Iraqis.

Given the uncertain political situation in Iraq, "there is no entity that can assure repayment right now," said Senate Appropriations Committee chairman Ted Stevens, Republican of Alaska. Other nations may be reluctant to donate cash if the United States doesn't set an example, Deputy Secretary of State Richard Armitage told a House panel yesterday.

"If we went to loans, then that would probably encourage other countries to follow suit," Armitage said.

But as the mission in Iraq shifts from being a decisive military victory to a financial burden, many lawmakers in both parties are now reluctant to approve new spending that is unpopular with the public and would add to the US deficit.

"We're not dealing with an impoverished country here," Senator Byron Dorgan, Democrat of North Dakota, told colleagues at yesterday's Appropriations Committee session. "We don't need to create ZIP codes with the American people's money," he said, referring to $9 million in the bill to create a new postal system.

Supporters of the loan idea said they didn't know whether they had the votes in the full Senate to change Bush's budget request. The idea failed in the Appropriations Committee yesterday on a 15-to-14, party-line vote, but two Republican senators, Arlen Specter of Pennsylvania and Robert Bennett of Utah, said they would consider such a plan when the full Senate takes up the bill.

Senator Olympia Snowe, Republican of Maine and a leading deficit hawk in Congress, said the White House was counting votes and would probably "regroup" if it was clear a majority of lawmakers wanted loans instead of grants.

"Of course it should be a loan. We shouldn't ask the Iraqi people to pay a penny for the occupation of their country. Neither should we ask the American taxpayers to pay for the reconstruction," said Grover T. Norquist, the president of Americans for Tax Reform. "It's not like they're a poor country. They've got assets." Democrats, including those who voted last October to authorize force against Iraq, have been using the supplemental spending request to buttress their complaint that Bush is ignoring domestic needs and that he underestimated the cost of reconstruction in Iraq.

According to an analysis by the Senate Democratic Policy Committee, the administration request includes $3.6 million for 600 radios and phones -- translating into a per-unit cost of $6,000. An additional $400 million would be spent on two prisons, with the cost averaging $50,000 per bed. American high-security prisons cost $26,134 per bed, the group said.

"I think we've gotten over-fixated on the amount of money," said Senator Trent Lott, Republican of Mississippi. Lott said he would vote for the president's request this time, but "I'm not buying into another one."