Senate Votes Down Iraq Self-Funding

Handing a preliminary victory to the White House, the Senate on Tuesday rejected a Democratic proposal to require Iraq to finance its own reconstruction, rather than having U.S. taxpayers provide the $20 billion that President Bush has requested.

The 57-39 vote, defeating an amendment to an $87-billion bill to fund military operations and reconstruction in Iraq and Afghanistan, was the first test of the full Senate’s sentiment on a financing idea that the White House has vehemently fought.

Just before the vote, the administration called about two dozen senators to the White House, urging them to reject that amendment and other proposals to have Iraq pay for some of the reconstruction costs.

A key question remains, however, over whether dissident Republicans who back another approach to making Iraq repay the aid will press ahead with that amendment, which poses a stiffer challenge to the administration’s position.

There were signs that the administration was beginning to bring wayward Republicans into line. Sen. Lincoln Chafee (R-R.I.), who voted against going to war with Iraq a year ago, returned from an official trip to that country and announced that he would support the $87 billion and oppose turning any funding into a loan. And Sen. Larry E. Craig (R-Idaho), co-sponsor of an amendment to provide half the reconstruction aid as a loan, said he was reconsidering his support for that measure after returning from the Iraq trip.

“We have growing support,” said a key administration ally, Sen. Mitch McConnell (R-Ky.). “I am optimistic we are going to win on a bipartisan basis.”

The Democratic amendment, offered by Sen. Byron L. Dorgan (D-N.D.), would have deleted the $20 billion included for reconstruction of Iraq. In its place, Dorgan proposed establishing a financing authority that would use future Iraqi oil revenue as collateral to borrow money for rebuilding.

“It’s Iraqi people using Iraqi oil to reconstruct Iraq, not the American taxpayer,” Dorgan said.

Advocates said $87 billion was a high price for the United States to pay at a time when it is already running deep in deficits. The Congressional Budget Office has estimated the federal deficit at close to $500 billion for fiscal 2004, which began Oct. 1.

But opponents of the amendment argued that it did not make sense to put additional financial burdens on Iraq when it was already loaded with debt to other nations.

The administration also has argued that the plan would undercut the ability of the U.S., at an international conference later this month, to persuade other nations to contribute to Iraq’s reconstruction.

That argument carried little weight with lawmakers skeptical that any significant aid would be forthcoming from the countries attending the conference.

“I personally am pessimistic we’re going to have much luck there, regardless of how we structure our aid,” said Sen. Susan Collins (R-Maine).

Collins and a coterie of Republicans have introduced an alternative to Dorgan’s amendment that would provide half the reconstruction aid to Iraq in the form of a grant and half as a loan.