WASHINGTON — A handful of Democratic and Republican senators defied President Bush and sought agreement Wednesday on an amendment to make part of a $20.3 billion Iraqi aid plan a loan.
The behind-the-scenes bipartisan effort came as the House and Senate debated similar $87 billion bills financing U.S. military action and reconstruction in Iraq and Afghanistan.
Bush has insisted that the $20.3 billion he wants to reconstruct Iraq’s electric system, postal service and other economic and government institutions must be in the form of grants rather than loans. Making the money a loan would feed suspicions that the United States wants to control Iraq’s huge oil reserves, the administration and its congressional allies said.
To try snuffing out the move toward loans, Bush sent Vice President Dick Cheney and Secretary of State Colin Powell to lobby GOP senators at their weekly lunch. Even so, with record federal deficits making lawmakers wince over the amount of Iraqi aid, Senate Majority Leader Bill Frist, R-Tenn., seemed less than certain that the White House effort would succeed.
"I’m not overly confident, but I think people will listen" to arguments about the need for grants, not loans, Frist said.
Though details were still being completed, the bipartisan group of senators discussed making about $10 billion of the package a loan, but converting the money to grants if Saudi Arabia, Russia, France and other countries forgive 90 percent of the money they are owed by Iraq. That debt has been estimated to be as much as $200 billion, including war reparations owed by Saddam Hussein’s government after its invasion of Kuwait in 1990.
The senators were also considering language turning the loans into grants for each dollar of aid pledged by donor countries meeting in Madrid next week.
Sen. Ben Nelson, D-Neb., said he and other pro-loan senators hoped to have their amendment ready by today.
Lawmakers and aides said the senators involved included Evan Bayh, D-Ind.; Saxby Chambliss, R-Ga.; Susan Collins, R-Maine; Lindsey Graham, R-S.C.; Kay Bailey Hutchison, R-Texas; John Ensign, R-Nev.; and Olympia Snowe, R-Maine.
It was unclear how the bipartisan loan amendment would fare in the Senate, where the White House was working for its defeat.
"Obviously the White House is not on board with us, so that makes it difficult," Chambliss said.
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