Roll Call: House Nixes Loans for Iraq

On October 17, by a vote of 200 to 226, the House rejected a Democratic amendment that would have turned half of the U.S. reconstruction package in Iraq into a loan instead of a grant.

The amendment to the Iraq supplemental spending bill (H.R. 3289) was sponsored by Rep. David Obey (D.-Wis.).

It aimed to correct what the liberal congressman called "compulsive statesmanship, a tendency for people to want to do the right thing so badly that they sometimes lean overboard in taking into consideration the interests of other countries and in the process miss opportunities to take into account the interests of our own."

"I think it is absolutely legitimate to consider requiring 50% of the money that we spend in this reconstruction operation to be provided in the form of loans," he said. "It is misleading to assume that because the United States is a rich country and Iraq is a somewhat poorer country that we are in a better position to pay off foreign debts than they are. We are not. . . This country has run such large trade deficits for so long, and we are going to be running such huge trade deficits in the future, that our country has no realistic possibility anytime in the next decade to be paying off any significant portion of our own foreign debt. . . Because Iraq has a long-term prospect of multi-billion-dollar benefits from the oil they have in the ground, it in fact means that the United States has less of an ability to pay off foreign debt in the future than Iraq does."

Although he did not include any such language in his amendment, Obey said he hoped the President would negotiate a loan through the World Bank that would include matching funds from other countries. This caused some pro-loan conservatives, such as Rep. Mike Pence (R.-Ind.), to vote against the amendment.

Rep. Roger Wicker (R.-Miss.) argued against the amendment. "Iraq already has well over $100 billion in outstanding debt," said Wicker. "Obviously, we are working to get this debt restructured, but still, the nation will be left with enormous obligations for past borrowing."

Wicker argued that the United States would set a poor example for the world if it gives the money to Iraq as a loan. "Creating a new U.S. debt will dampen our efforts to get others to forgive debt," he said.

"Secretary Powell and others are going to Madrid to get donors to contribute to the reconstructing of Iraq," Weldon continued, referring to an upcoming conference in Spain. "Japan is talking about contributing a substantial amount of money, it may be $1.5 billion, in grants. We are hoping that it will more closely approach the figure of $5 billion in grants. If we were to enter into a policy of loans even for a portion of this, then the Madrid conference would be changed to a loaners conference rather than a donors conference, and we would lose a great opportunity."

The amendment was opposed mostly by Republicans, who wanted to be supportive of President Bush's request for grants, not loans. The amendment was generally supported by Democrats looking to embarrass the President over failures in Iraq, as well as a handful of conservatives who oppose spending taxpayer money to rebuild the oil-rich nation.

A "yes" vote was a vote for the Obey amendment, to turn half of the Iraq reconstruction funding into a loan package. A "no" vote was a vote against the amendment.

NOT VOTING: 9