Thu, Oct 23, 2003 - Page 7 News List

US wants Iraq to `borrow' aid money

AFP , WASHINGTON

Defying a White House veto threat, the US House of Representatives voted overwhelmingly to seek conversion of part of a US$20.3 billion Iraqi reconstruction package into a loan, setting off a wild scramble among top Republicans to salvage the measure.

By a vote of 277 to 139, the House passed a non-binding resolution on Tuesday that calls on House conferees negotiating a final version of the bill with members of the Senate to turn a US$10 billion portion of the package into a loan, as it was done last week by the upper chamber.

Albeit largely symbolic, the measure marked a de facto political reversal by the Republican-controlled House, which last week complied with President George W. Bush's request to give Iraq a grant rather than a loan.

Significantly, the vote came just hours after White House budget director Joshua Bolten specifically warned lawmakers that Bush was likely to veto the whole US$85 billion war and reconstruction package for Iraq and Afghanistan if the loan provision remained in the bill.

In a letter sent to Capitol Hill, Bolten said the loan proposal "raises questions about our commitment to building a democratic and self-governing Iraq."

"If this provision is not removed, the president's senior advisers would recommend that he veto the bill," the budget director said.

Tuesday's vote appears to reflect strong apprehension among rank-and-file Americans about allocating huge amounts of money for Iraq's reconstruction at a time when the US budget deficit is spinning out of control.

A CBS News poll conducted last month showed that 66 percent of respondents believed the US should not pay for Iraq's reconstruction at all.

But popular feelings notwithstanding, Republican House leaders were not amused late on Tuesday and rushed to whip dissenting members into line.

"I and a majority of the House conferees will vigorously oppose any attempt to provide the reconstruction funds as a loan," declared House Appropriations Committee Chairman Bill Young.

"The House will hold firm in support of the president and in the end I expect the conference report will drop the loan provision," he added.

John Feehery, spokesman for House Speaker Dennis Hastert, sought to downplay the importance of the vote, saying such motions were normally ignored not only by the White House "but by us, too."

House-Senate negotiators also found themselves under pressure from the Senate side, when a bipartisan group of senators wrote a letter asking them to keep the loan provision intact.

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