Credit for Cruise Missiles? Pentagon Offers Partners Loans to Buy from US

US

The Trump administration is trying once more to fund a program for providing its allies with loans to buy US military equipment. The lion’s share would go to three major buyers of US weapons: Egypt, Jordan and Israel.

US President Donald Trump’s proposed 2020 budget includes $5.4 billion for the Foreign Military Financing (FMF) grant assistance program; however, a US State Department official told Defense One Tuesday that the Trump administration really wants $8 billion for the fund.

Jointly managed by the Defense and State Departments, the FMF program provides US defense partners with loans to buy US equipment: funding that averages annually around $10.5 billion by DOD and $8.1 billion by the State Department, according to a February 2018 report on the FY 2019 budget by the Congressional Research Service.

However, Trump’s proposal revives a plan torpedoed in 2017 to fund grants, too, “so that America can still be the defense supplier of choice for partner countries for which loans are not the best option.”

“This expanded set of FMF tools would help support increased US defense sales and increase opportunities for allies and partners to build their militaries around US innovation and quality,” the budget proposal, submitted Monday, states.

The proposal also seeks “interest rate flexibility for the FMF direct loan program to make US defense equipment a more competitive and more affordable option…

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