Iraq loan repayment plan rejected

US congressional negotiators have rejected a plan which would have required Iraq to repay half of a proposed aid package.

    Congress is expected to approve Iraq grants on Wednesday

    The decision on Wednesday came as a boost for President George

    Bush, as Congress prepared a final $87 billion bill for Iraq and


    The White House had threatened to veto the entire bill if

    Congress did not agree to give Iraq nearly $20 billion in

    reconstruction funds.

    The US Senate had earlier passed a plan

    that would have turned half of that amount into loans.

    Republicans from the Senate Appropriations Committee


    against including loans in the final bill, as House of

    Representatives and Senate members met to resolve differences



    The measure was not in the House bill, so the loan

    provision was eliminated from the final bill.

    US lawmakers want Iraq to use
    its oil wealth to repay loans

    With that key hurdle passed, negotiators from the

    Appropriations Committees of each chamber hoped to agree on a

    bill later in the day.

    Both the House and Senate are expected to approve the final

    Iraqi aid package easily, despite broad support among lawmakers

    to make Iraq use its potential oil wealth to repay

    reconstruction money.

    The negotiators had approved with little debate the nearly

    $67 billion to keep US troops in Iraq and Afghanistan.

    White House pressure 

    Bush had argued that seeking repayment would burden Iraq

    with more debt, slow efforts to stabilise the country and

    prolong the US occupation.

    Under intense White House pressure, two Senate Republicans

    who said they would push for loans - Sam Brownback of Kansas

    and Ben Nighthorse Campbell of Colorado - backed down to give

    Bush the win.

    One Democrat, Senator Daniel Inouye of Hawaii, also

    voted against loans.

    Republicans who backed loans said they would support the

    final package, even if the repayment measure was eliminated.

    SOURCE: Reuters


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