WASHINGTON — When Congress approved up to $2 billion in Taiwan military aid per year via the fiscal 2023 National Defense Authorization Act, appropriators balked. They instead opted to fund that assistance as U.S.-backed loans, fearful that providing such a large amount of security aid via grants would take too much out of the budget for the State Department, which administers the program.

But this year they’ve changed their tune. House Republicans have allocated $500 million in Taiwan Foreign Military Financing – a program that allows other countries to purchase U.S. military equipment using grants or loans – in their FY24 State Department spending bill.

The House foreign aid funding panel released the draft text of its appropriations bill on Thursday and is expected to vote on it Friday. The proposed Taiwan military aid aims to deter China from attacking the island. Beijing views Taiwan as a rogue province and has threatened to retake the island by force if necessary.

Appropriators from both parties argued last year that allocating Foreign Military Financing, or FMF, for Taiwan would force a limited State Department budget to compete with other security assistance programs or possibly humanitarian priorities.

Sen. Lindsey Graham of South Carolina, the top Republican on the Senate’s State Department funding panel, expressed those concerns to Defense News last year. But in April he indicated that he wants his panel to reverse course this year, stating that “we need to actually put money toward Taiwan’s defense needs.”

The State Department did not request Taiwan Foreign Military Financing, or FMF, in its FY24 budget request. Instead it asked for an additional $113 million worldwide FMF account, which could be used for Taiwan or other countries across the globe.

Providing FMF grant assistance to Taiwan was among the 10 bipartisan proposals the China Committee recommended to the House in May.

Even as the House bill adds $500 million to the security aid budget for Taiwan, it cuts the State Department budget to $52.5 billion, 24% below President Joe Biden’s budget request.

Democrats derided the State Department cut as harmful, with Appropriations Committee top Democrat Rep. Rosa DeLauro of Connecticut arguing that full funding is “critical to bolstering our national security.”

The bill also maintains traditional levels of security aid funding for other U.S.-friendly countries. That includes $3.3 billion in FMF for Israel, $1.3 billion for Egypt and $425 million for Jordan – the top three U.S. military aid recipients this year.

Taiwan’s $762 billion gross domestic product is significantly higher than all three of those countries, and Taiwanese lawmakers have approved an $18.3 billion defense budget for FY23 — a 13.9% increase over FY22.

Separately, Defense Secretary Lloyd Austin told the Senate in March that he plans to take advantage of another FY23 defense authorization to transfer U.S. weapons to Taiwan from U.S. stockpiles via presidential drawdown authority, the same mechanism Biden has used to send weapons to Ukraine.

“My team is working diligently to make sure that we have the right capabilities in that particular drawdown,” Austin said. “And of course we have that authority. We will need the appropriations as well.”

The FY23 National Defense Authorization Act stipulates that Taiwan must increase its defense budget every year to remain eligible for the FMF program.

Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.

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