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WASHINGTON: US President Donald Trump has proposed in his annual budget to the Congress to convert US grant to Pakistan for purchase of military hardware into a loan, the White House said.
However, the Trump administration has left it for the State Department to take a final call on the proposal.
Unlike many parliamentary democracies like India and the UK, wherein the finance minister personally delivers speech on the floor of the parliament, in the US the White House sends hard copies of the President's budget proposals.
The maiden annual budget of the Trump administration would be submitted to the US Congress later today.
Responding to questions, Mick Mulvaney, Director of the Office of Management of Budget in the White House said the Trump administration has proposed to convert its Foreign Military Funding (FMF) programme to many countries, including Pakistan, from aid to financial loan.
"The Foreign Military Funding or FMF for Pakistan may be provided in the form of a loan," said Mulvaney.
"This is one of the options that the administration had explored in its internal deliberations, but the request itself does not make that determination," the White House later clarified, indicating that it might revert back to the original financial grant to Pakistan to sell military hardware if need be.
Whether the funding is provided through grants, or as a subsidy for a guaranteed loan, is an option the State Department can exercise to ensure our foreign assistance best supports US' national interests, the White House added.
The move is seen as part of the Trump administration's efforts to cut foreign aid budgets to help pay for increased US military spending.
However, for countries like Israel and Egypt, its military aid would continue to be in the form of grant, Mulvaney said.
The details of the FMF to Pakistan and other countries are expected to be released by the State Department later.
"We do maintain aid to Pakistan in the budget. I don't believe it's at the same levels as previous," he said in response to a question.
"We do change a couple of the foreign military programmes from direct grants to loans. Our argument was instead of giving somebody USD 100 million, we can give them a smaller number worth of loan guarantees and they can actually buy more stuff. We did not change it for Israel. We did not change it for Egypt," he said.
http://timesofindia.indiatimes.com/...after-concert-attack/articleshow/58799859.cms
Trump's budget proposes converting some military grants to loans
WASHINGTON The Trump administration's budget proposal would convert some of the United States' foreign military grants to loans, part of a larger effort to slash spending on diplomacy, aid and programs abroad by more than 29 percent, the White House said on Monday.
The cuts to programs under the State Department are in part meant to fund an increase in military spending.
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 fiscal year 2017.
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.
"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."
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.
Mulvaney said that aid to Pakistan would be reduced, though he did not give concrete details.
"(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," he said.
POTENTIAL STRAIN FOR SMALLER COUNTRIES
Todd Harrison, a defense budget analyst with the Center for Strategic and Budgetary Assessments, said the switch from grants to loans for military aid may mean that countries will not be able to afford U.S. military equipment, forcing them to go elsewhere for supplies.
"Countries can buy from China or Russia. They have other places to shop, and one of the ways that we build capacity with our partners is through these grants," Harrison said. "It's in our interest to have interoperability with our allies, and these military grants are a part of that."
Thomas Spoehr, who directs the Center for National Defense at the conservative Heritage Foundation, said the conversion from grants to loans will be a challenge especially for smaller military aid recipient countries like Macedonia and Tunisia.
But "it's a proposal whose time has come," Spoehr said, given U.S. budget deficits and high military spending overall.
"This is probably a prudent place to make some cuts given all the other investments we make in national defense," Spoehr said.
(Additional reporting by Idrees Ali; Editing by Yara Bayoumy and Cynthia Osterman)
Our Standards: The Thomson Reuters Trust Principles
https://www.reuters.com/article/us-usa-budget-foreign-idUSKBN18J05D
However, the Trump administration has left it for the State Department to take a final call on the proposal.
Unlike many parliamentary democracies like India and the UK, wherein the finance minister personally delivers speech on the floor of the parliament, in the US the White House sends hard copies of the President's budget proposals.
The maiden annual budget of the Trump administration would be submitted to the US Congress later today.
Responding to questions, Mick Mulvaney, Director of the Office of Management of Budget in the White House said the Trump administration has proposed to convert its Foreign Military Funding (FMF) programme to many countries, including Pakistan, from aid to financial loan.
"The Foreign Military Funding or FMF for Pakistan may be provided in the form of a loan," said Mulvaney.
"This is one of the options that the administration had explored in its internal deliberations, but the request itself does not make that determination," the White House later clarified, indicating that it might revert back to the original financial grant to Pakistan to sell military hardware if need be.
Whether the funding is provided through grants, or as a subsidy for a guaranteed loan, is an option the State Department can exercise to ensure our foreign assistance best supports US' national interests, the White House added.
The move is seen as part of the Trump administration's efforts to cut foreign aid budgets to help pay for increased US military spending.
However, for countries like Israel and Egypt, its military aid would continue to be in the form of grant, Mulvaney said.
The details of the FMF to Pakistan and other countries are expected to be released by the State Department later.
"We do maintain aid to Pakistan in the budget. I don't believe it's at the same levels as previous," he said in response to a question.
"We do change a couple of the foreign military programmes from direct grants to loans. Our argument was instead of giving somebody USD 100 million, we can give them a smaller number worth of loan guarantees and they can actually buy more stuff. We did not change it for Israel. We did not change it for Egypt," he said.
http://timesofindia.indiatimes.com/...after-concert-attack/articleshow/58799859.cms
Trump's budget proposes converting some military grants to loans
WASHINGTON The Trump administration's budget proposal would convert some of the United States' foreign military grants to loans, part of a larger effort to slash spending on diplomacy, aid and programs abroad by more than 29 percent, the White House said on Monday.
The cuts to programs under the State Department are in part meant to fund an increase in military spending.
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 fiscal year 2017.
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.
"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."
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.
Mulvaney said that aid to Pakistan would be reduced, though he did not give concrete details.
"(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," he said.
POTENTIAL STRAIN FOR SMALLER COUNTRIES
Todd Harrison, a defense budget analyst with the Center for Strategic and Budgetary Assessments, said the switch from grants to loans for military aid may mean that countries will not be able to afford U.S. military equipment, forcing them to go elsewhere for supplies.
"Countries can buy from China or Russia. They have other places to shop, and one of the ways that we build capacity with our partners is through these grants," Harrison said. "It's in our interest to have interoperability with our allies, and these military grants are a part of that."
Thomas Spoehr, who directs the Center for National Defense at the conservative Heritage Foundation, said the conversion from grants to loans will be a challenge especially for smaller military aid recipient countries like Macedonia and Tunisia.
But "it's a proposal whose time has come," Spoehr said, given U.S. budget deficits and high military spending overall.
"This is probably a prudent place to make some cuts given all the other investments we make in national defense," Spoehr said.
(Additional reporting by Idrees Ali; Editing by Yara Bayoumy and Cynthia Osterman)
Our Standards: The Thomson Reuters Trust Principles
https://www.reuters.com/article/us-usa-budget-foreign-idUSKBN18J05D
