14 March 2017

News Story: White House plan to gut foreign military financing would cost defense jobs, senators warn

US President Donald Trump
By: Joe Gould

WASHINGTON — The Trump administration is mulling plans to kill U.S. subsidies for foreign allies to buy American-made weapons outright and replace them with a loans program.  

The proposal is a bullet point in White House budget director Mick Mulvaney’s controversial plans to slash funding for diplomacy and development, first reported by the Washington Post and confirmed to Defense News by multiple sources. The idea is to replace all FMF grants with loans, save for the security aid committed to Israel— which makes up more than half of the $5.7 billion program. 

While it has uncertain prospects in Congress, it has frustrated key U.S. lawmakers, who say such a move would trash both a critical national security tool and a buttress for the domestic defense industry — just as President Trump says U.S. jobs are his top priority.  

Sen. Lindsey Graham, chairman of the Senate Appropriations Subcommittee on State and Foreign Operations, earlier this month said deep State Department cuts are “dead on arrival” in Congress. On Thursday, he defended FMF.

“Sometimes we have to subsidize the allies’ purchases, but they buy American equipment and they do pay,” Graham, R-S.C., said of the FMF program. “You have to show me where a loan is better for our national security … This part of the [federal] budget is a percent of a percent. 

A key argument for FMF is that if America ends arms subsidies, it lets strategic allies get weaker and cedes business and influence to Russia and China, its largest rivals strategically and for global defense markets.

“The last thing I want allies to do is go to the Russians and the Chinese because we are penny-wise and pound foolish,” Graham said. 

Read the full story at DefenseNews