*EPF513 07/16/2004
House Approves $19.4 Billion FY05 Foreign Aid Spending Bill
(Rejects amendment to cut military aid for Egypt) (840)

By Kathryn McConnell
Washington File Staff Writer

Washington -- The House of Representatives passed a $19.4 billion spending bill for foreign aid and export assistance for the fiscal year beginning October 1 (FY05) after rejecting an amendment that would have converted half of the bill's military aid for Egypt into economic assistance.

The measure, passed late July 15 by 365-41, continues a post-September 11, 2001, trend of increasing U.S. foreign aid spending. Although the bill would provide 9 percent less than the Bush administration requested, it includes 11 percent more than the amount approved for FY04.

Senate appropriators have not yet marked up their version of a foreign operations bill. Before the end of the session, the Senate will likely fold a foreign operations measure into an omnibus-spending package, the Republican Senate leader has indicated.

The House and Senate must negotiate agreement on a final bill before it can be sent to the president for signature or veto.

The House-passed bill would provide no funding for Iraq. Funding for reconstruction in Iraq was included in a $21.2 billion FY04 supplemental spending bill. Most of the FY05 funding increases are earmarked for international HIV/AIDS assistance and for U.S. allies in the war on terrorism.

The measure would provide $2.2 billion for programs to combat HIV/AIDS, the highest level ever. It also would provide $1.25 billion for the Millennium Challenge Account, the administration's supplemental aid program for developing countries that meet certain political and economic standards. That amount is 25 percent more than current spending but only half the Bush administration's request.

The bill would provide $2.6 billion in aid for Israel and $1.8 billion for Egypt. These amounts are slightly lower than current levels because of a planned gradual phasing-out of economic assistance to the two countries, according to news reports. However, the House Appropriations Committee asserts that the United States should sustain a military-improvement program for Israel over the next four years, reports said.

In introducing the amendment to convert $570 million of the bill's $1.3 billion in military aid for Egypt to economic assistance, Democratic Representative Tom Lantos argued that Egypt faces no major military threats, especially since neighboring Libya agreed to abandon efforts to develop weapons of mass destruction. The money would be better spent on "desperately needed economic and social programs," he said in House debate.

The Bush administration lobbied against the amendment, which was defeated 133-288. A letter sent from Secretary of State Colin Powell to Congress said that cutting Egyptian military aid would seriously damage U.S. foreign policy objectives in the Middle East.

The measure would continue funding approximately $75 million in development aid for Palestinians in the West Bank and Gaza. All aid to Palestinians would go to private voluntary organizations or contractors, all monitored by the U.S. Agency for International Development (USAID).

It would include $456 million for economic and military assistance to Jordan. This aid would help Jordan deal with border security and help modernize its information-technology sector, according to reports.

The bill would appropriate $3.5 billion for development assistance, $1.3 billion for international financial institutions, $776 million for migration and refuges assistance and $1 billion for Afghanistan, including $400 million to train and equip a new Afghan army.

It would include $300 million for Pakistan, viewed as vital to rooting out al Qaeda forces on the Pakistan-Afghanistan border, and $66 million for Poland, a major ally in Operation Iraqi Freedom

The measure would provide $311 million for humanitarian aid for Sudan and prohibit any funds from going to the Sudanese government unless the secretary of state certifies that government has ended all support for militias attacking civilians in the western region of Darfur.

The bill would also provide $500 million for the republics of the former Soviet Union and $375 million for Eastern Europe and the Baltic states.

The House also adopted an amendment 243-161 that would prohibit funds in the bill from being used to request the United Nations to assess the validity of U.S. elections.

In addition, the House approved 270-132 an amendment that would prohibit the Export-Import Bank from approving direct loans or loan guarantees to corporate entities incorporated or chartered in Bermuda, Barbados, the Cayman Islands, Antigua or Panama.

It also approved 241-166 an amendment that would prohibit Economic Support Fund (ESF) assistance to any country that is a party to the International Criminal Court (ICC) and has not signed an agreement not to surrender U.S. nationals to the ICC.

The House rejected 111-312 an amendment to cut $359 million in funding for the World Bank, an amount equal to the bank's loans to Iran.

Even with the recent increases in aid spending, overall foreign assistance for FY05 would remain less than 1 percent of overall government spending, according to news reports.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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