- The Washington Times - Thursday, October 16, 2003

The Senate yesterday rejected a central element of President Bush’s Iraq-reconstruction policy, voting to make part of the $20.3 billion in rebuilding funds to Iraq a loan, rather than give it to the nation outright.

“All we’re asking for is that once the country gets up and going — we’re going to build schools and hospitals, we’re going to do great things for the Iraqi people — but once your oil refineries get fixed after we pay the money, consider helping us, because we’re deep in debt,” said Sen. Lindsey Graham, South Carolina Republican.

A bipartisan group of senators pushed the amendment, which designates half of the reconstruction money as loans, while the other half remains an immediate grant.

The amendment passed 51-47, with eight Republicans and the Senate’s one independent joining all but four Democrats in supporting it.

The House, though, rejected a similar Democrat-sponsored loan proposal yesterday. Final votes on the overall bills are expected today, and the loans-or-grants issue must be sorted out in a conference committee between the chambers.

Passage of the $87 billion Iraq spending bill, which replenishes military supplies, funds the global war on terror and spends about $20 billion to rebuild Iraq, is assured. Both Republican and Democrat leaders expect a sizable vote in both the Senate and House in favor of the bill.

Instead, the question facing members is the form the bill will take — particularly the $20 billion designated for rebuilding Iraq.

Mr. Bush and top administration officials made a full-court press to try to defeat the loans proposal.

They argued in a statement of administration policy yesterday that it would “raise questions about our commitment to building a democratic and self-governing Iraq, and impair our ability to encourage other nations to provide badly needed assistance.”

The administration also said it would be counterproductive to add to the billions of dollars of loans Iraq already carries. But loan-backers rejected those arguments.

“Some of the largest holders of that debt are Saudi Arabia, France, Germany and Russia,” said Sen. Susan Collins, Maine Republican. “The American people will be justifiably outraged if one dime of their money is sent to France while the American people are pouring millions of their hard-earned tax dollars into rebuilding Iraq.”

Still, the administration’s supporters said loans are unworkable because no Iraqi government exists to accept a loan. And they feared the message the vote would send to those in the Middle East.

“The headline would be, for those who are against us, ‘We’re winning,’” said Sen. John W. Warner, Virginia Republican and chairman of the Armed Services Committee. “It will endanger the safety of our people.”

The House, meanwhile, voted 226-200 to reject a Democrat-sponsored loan proposal, with 18 Republicans voting for loans and 18 Democrats voting against them.

The administration has not said whether it will veto a bill that includes loans. With the House voting against loans, Republican leaders expect the administration to get its way in the conference committee.

Before the loan votes yesterday, both chambers rejected efforts to force the administration to change policy and embrace international control of rebuilding.

The Senate, on a 57-42 vote, defeated an amendment that would have required the president to meet benchmarks for international cooperation and come back to Congress with reports on progress before receiving half of the rebuilding funds that the administration has requested. A similar attempt in the House fell on parliamentary-procedure grounds.

That left many Democrats saying they would vote against the overall bill, arguing that they can support the troops while opposing the president’s request.

But House Majority Leader Tom DeLay, Texas Republican, said that “isn’t going to cut it this time.”

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