Various Measures

Quorum being present, Committee on Foreign Affairs will come to order. I would ask that everybody rise, join me in reciting the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty. I'd ask everybody to remain standing for a moment. We are in national law enforcement week. Let's take a moment of silence to honor those law enforcement officers across the country uh that gave their lives on deployment across our communities. Please join me in a moment of silence. Thank you. Committee is meeting today for consideration of eleven measures. The chair announces that any requests for recorded votes may be rolled and may recess the committee at any point without objection so ordered pursuant to House rules, I request that members have the opportunity to submit views for any committee report that may be produced on any of today's measures, without objection so ordered. Thank you. Pursuant to notice, I now call up H R eight six four nine, the expanding the Defense Industrial Base Sales Act. The bill was circulated in advance and the clerk shall designate the bill.

H R eight six four nine, to amend the Arms Export Control Act to authorize the use of foreign military financing

Without objection, the first reading is dispensed with, and the bill is considered read and open to amendment at any point. Is there any discussion of the bill? Ranking member Meeks.

Thank you, Mister Chairman, and while I appreciate Representative Baumgartner's bill, I cannot support its risky implications regarding the potential misuse of taxpayer dollars. Foreign allies and partners can purchase U. S. origin defense articles via US government managed foreign military sales or directly from manufacturers via direct commercial sales. Certain complex systems can only be purchased via FMS contracts. In the United States, government often manages the largest and most consequential purchases. While the majority of foreign defense sales are paid for with the purchasing country's national funds, some countries receive US taxpayer-funded foreign military financing or FMF to use for weapons for US weapons purchases. Currently, only a small number of countries are authorized to also use US provided FMF for direct purchases which are not US government managed but contracted directly via manufacturers. This bill would enable any country to use taxpayer dollars provided FM F m f for any direct commercial weapons purchase. This is an unprecedented expansion of authority that drastically enlarges the universe of US taxpayer funding for weapons purchases without visibility of the United States government. Authorizing unbounded and unlimited use of f m f opens the door to greater opportunities for corruption, bribery, and pay-to-play schemes. Without the US government as a the risks for abuse and quid pro quo arrangements increase. The Trump administration has already shown itself to be a poor steward of taxpayer dollars. Dubious legal arrangements and multi-million dollar contracts between the Trump and Wyckoff families, Gulf countries, the Trump Pentagon, and drone manufacturer Powerus, which is partially owned by Eric and Donald Trump, Junior, illustrate the conflicts of interest this policy This isn't a hypothetical risk. Previous DOD audits warned of weak oversight in direct commercial contracts. And the Foreign Corrupt Practices Act exists precisely to deter corrupt arrangements between United States defense firms and foreign officials to meaningfully effect. For example, in twenty twenty four, Raytheon agreed to a nine hundred and fifty million dollar legal settlement in a federal case. involving a multi-year bribery scheme with high-level foreign military officials to secure defense contracts. The company had used sham contracts and shell accounts to funnel millions in bribes for projects and weapons cases, including air defense systems and a joint operations center. Amidst such risks, an unlimited immediate global authorization for taxpayer FMF to be used for any and all DCF

Ranking member yields back. Any other members seek recognition? Representative Baumgartner.

Well, thank you, uh, Mr. Chair. Um.

Baumgartner.

This bill is really about increasing the safety and security of America and the world, and about avoiding future wars.

OK.

Think about the situation in Ukraine, the situation in Taiwan, the situation in the Middle East. We know that we can't need to get key military equipment into the hands of our allies uh as quickly as possible, and we know that there's a problem with red tape in this process. Uh, Congressman Zinke and his uh, committee on, uh, military sales did a lot of important work looking in identifying some of this uh this red tape. And we also know that we need a defense industrial base uh here in America that can rapidly scale up should we have uh increased threats. And so we need to get important uh military equipment in the hands of our allies, and we need to strengthen our industrial base. What this bill would do would allow countries eligible for foreign military financing to use those funds for direct commercial contracts. In doing so, it would eliminate the hundred million dollar cap that is currently in place. As background, foreign military financing is a grant or a loan that the U S provides to a foreign partner to fund the purchase of American defense systems. Foreign military financing is typically required to be used for foreign military sales only which tends to be more expensive due to the role that the U S government plays in the acquisition of the defense system. In limited cases, foreign military financing may be used to enter in direct commercial contracts. This is a process that allows countries eligible for milit- for foreign military financing to use those funds to purchase defense articles directly from US companies, similar to the direct commercial sales process. However, direct commercial contracts is currently restricted to only certain partners and is limited in the application even for authorized countries. In this current environment where many of our close partners are in dire need of weapons systems delivered in a timely fa- Direct commercial contracts would ensure that foreign military financing recipients are able to purchase systems quickly and efficiently. This will ensure that FMF eligible countries are able to maximize and fully reap the benefits of this type of assistance. Allowing more countries to use the direct commercial contract process would speed up the arms sales process and expand industry's ability to work with certain partners on larger cases they cannot necessarily afford uh without their own filamentary financing. So, you know, I understand we are in a highly charged political environment and there's some, uh, you know, various perspectives will be expressed about the current administration. But let's just again think about that we're in a more complex set of security challenges across the globe than any time since World War Two. We know that we can avert future conflicts by getting more needed weapons in the hands of our allies at a quicker pace. And we also know that we can uh we need to re- uh re-industrialize our our defense base. And

Gentleman yields back. Any further discussion? Recognize myself for a moment. Under current law, foreign military financing funds, as has been spoken about, can typically only be used through the government to government foreign military sales system. This effectively forces allies into highly bureaucratic, to say the least, slow-moving process by default rather than allowing them to use FMS for direct This bill breaks that barrier by allowing FMF dollars to flow directly to American defense companies through commercial contracts. Competitors like China and many others routinely offer arms deals with faster timelines and far less paperwork, not better equipment, but better paperwork. By expanding FMF back direct commercial finance contracting, this bill removes one of the key issues that causes allies to look to other places. DCS is faster, it's more flexible, more profitable for American companies, and it also allows US defense companies to negotiate contracts directly with foreign buyers, move at a commercial speed, not a government speed, protect proprietary pricing, build lasting customer relationships. These are all very big positives. The bill would also encourage participation by nontraditional defense contractors, that have historically been locked out of foreign defense sales due to its complexity of the FMS system. So I wanna thank Representative Bumley.

I have an amendment at the desk.

Ranking member Meeks. Clerk shall distribute the amendment. Clerk shall report the amendment.

Amendment in the nature of a substitute to H R eight six four nine offered by Mister Meeks of New York. Strike all after the enacting clause.

Not objection for the reading of the amendments dispensed with. The representative is recognized.

Uh thank you, Mister Chairman.

Right, members recognized.

This amendment re- requires a strategy and implementation plan for expanding FMF use, globally requiring the State Department to formulate a number of detailed plans for addressing and avoiding conflicts of interest, create pro quo, and other corrupt arrangements. More specifically, this amendment requires state to better track, scrutinize, and audit any potential use of FMF for direct commercial contracts, as well as identify which countries and in what ways an expanded authority would be used. The amendment also requires the State Department to develop plans to better track and report brokerage fees, commissions, and other payments associated with such armed cases so as to identify potential slush funds, bribes, or shell payments. Finally, it requires a detailed plan for reviewing direct commercial purchases to ensure no sales are made by firms owned or controlled by the Donald J. Trump family members or current U. S. government officials. No sweeping global authority for U. S. taxpayer funds to be used willy-nilly for weapons purchases, directly from manufacturers should be initiated without proper scrutiny and accountability. The Trump administration has already shown that it he has shown us that in spades how irresponsible it is with US taxpayer dollars. And we should not enable the executive branch to spend potentially billions millions of more dollars without adequate plans for implementation and accountability in place first. We need to make sure that we continue to have some oversight. And with that, uh, I yield back.

Ranking member yields back. Any other members seek recognition? Representative Baumgartner.

Well, thank you, Mister Chair. I'm a a fan of uh ranking member Meek's, but not a fan of uh this particular amendment and I I would like to quote from the uh, Aerospace Industries Association, which is a fan uh, of the underlying bill, that uh, this this bill would provide flexibility and a pressure relief valve, allowing partners to access US capabilities more quickly, while reducing administrative burdens and reinforcing the competitiveness of the US industry. Uh, H six four, HR six, H six four nine is a timely solution that helps ensure the US remains the provider of choice around the globe. Uh, this is really not uh, uh, uh, an issue of uh, political sensationalism for the current elect uh, electoral uh, season. It really is an issue of how we get more weapons more quickly to our allies, like Ukraine, Taiwan, uh, partners in the Middle East, and do so in a way that strengthens our our industrial base. So that's what we're trying to solve here. And and so would respectfully ask that the uh, amendment be rejected.

Representative Yields back. Any other Recognize myself for a moment. I recommend no on this amendment. This amendment would undermine the purpose of this legislation, which is to expand defense sales, create American jobs, eliminate the expanded authorities that are intent of the underlying bill. It would also unnecessarily expand reporting requirements and require review of the entire DCS licensing system. Uh, in that, do any other members seek recognition? Seeing none. There being no further discussion, do any members wish to offer an amendment to the Meeks amendment in the nature of a substitute? Seeing none.

Thank you.

There being no further amendments, the question now occurs on the amendment in the nature of substitute offered by ranking member Meeks. All those in favor, signify by saying aye.

Aye.

Signify by saying no. No. In the opinion of the chair, the no's have it and the amendment is not agreed to.

I ask for a roll call.

A roll call vote has been requested, pursuant to the chair's previous announcement. That vote will be postponed. Thank you. Pursuant to notice, I now call up HR eight six six five, the Allied Defense Sales Act.

Mr. Chairman.

Yeah, I do. The bill. We already asked for amendments. The bill was circulated in advance and the clerk shall designate the bill.

Chairman. Mr. Chairman. Mr. Chairman. I had an amendment at the desk. For the prior bill.

Yeah. you guys did ask if there were any more amendments.

Please.

Yeah. Mister Olszewski, We already asked for amendments. I may have made a mistake in not asking if there were further amendments. We already asked for amendments.

Amendments, I'm sure.

Give me one second to sort this out.

Thank you.

We already asked if there were any additional amendments.

I I was

I asked for amendments to the Meeks amendment. I did not ask for further amendments.

Correct.

Hold on one moment while we while we sort that out.

Thank you.

Hold on a second.

Let's just see. Are there any further amendments?

And then we will have to go back and have a vote on the bill again.

Uh, yeah, there there there's No, we didn't.

OK. Very good.

OK. So are there any

Nothing else to move to the previous bill. Hold on one second.

There's a question I want to ask as well.

So, just say, are there any further amendments?

Ranking member Meeks, is there any objection to reopening amendment debate on H R eight six four nine?

No objection.

OK, seeing no objections. We're gonna reopen amendment debate on that. Are there any further amendments on eight six four nine?

Mister Chairman.

Mister Olszewski.

Thank you. I have an amendment at the desk.

Very good.

Thank you, Mister Chair-

The clerk shall The clerk shall distribute the amendments. Clerk shall report the amendment.

Amendment number sixty-four to HR eight six four nine, offered by Mister Olszewski of Maryland.

Without objection, further reading of the amendment is dispensed with. Representative is recognized.

Thank you again, Mister Chairman, uh, I offered this amendment because we come at this debate at a time when American families are struggling with rising costs. We also see the President and his family using the executive office to enrich themselves, whether it's accepting luxury jets from foreign governments, suing our own IRS for ten billion dollars, or engaging in crypto schemes and selling Trump-branded merchandise, the Trump family has been busy, busy lining their pockets anyway. They can. In fact, according to Forbes, the president's net worth has increased over three billion dollars in the last year alone, and now they are at it again. Poised to cash in on the war in Iran that is this administration started without any justification to the I will simplify this as much as I can. One, the president's sons financially back a publicly financed traded golf company. Two, that same golf company finalizes a reverse merger with a drone company that's pr- promoting itself to golf countries under attack by Iran. And three, together, these strange bedfellows, a drone and golf company, form a new corporation, complete with a press release touting the investment from the Trump brothers. The deal pulls in a web of trump family-linked investors banks and businesses and this is the kicker the new trump backed drone company recently landed an extremely lucrative lucrative air force contract to buy an undisclosed number of interceptor drones from that new corporation uh power us don junior even said his investment firm understands administration priorities because it helped craft some of them he's talked about having influence over defense decision personnel defense and that he could lobby for candidates quote " who wanted to spend more on drones" end quote. To be clear, I support American investment in drone defense and intercep- interceptors, I support more secure supply chains. Here's what I refuse to support. Steering these contracts and investments to the president's sons over other American suppliers. When the president's family stands to profit, it casts a doubt of suspicion over every Pentagon contract. This amendment is simple, it ensures that foreign military financing does not finance any direct commercial contract or sale that would financially benefit a family member of the president or vice president. It's that simple. Before I joined Congress, we heard a lot about colleagues railing against Hunter Biden for allegedly using his father's position to enrich himself. Let's be equally willing to condemn similar behavior, I would argue, even more egregious behavior from the Trump family. Under no circumstances should US taxpayers be lining the pockets of an officials or their family. Americans are sick of the corruption. They are sick of struggling while the rich get richer, and they are demanding we take action. Let's adopt this amendment. With that, I yield back.

Do any other members seek recognition? Representative Baumgartner.

Thank you, Mister Chair, uh, I I would ask that we oppose this uh amendment. Again, the underlying bill i is attempting to uh more efficiently get needed defense systems to our allies and partners to avoid future conflicts this is a very real issue and uh i i think this amendment in the way it's described is a series of of red hearings uh i know it is a political season uh but i really think we should rise above that in this committee and uh and just really seriously consider the inefficiencies in red tape we have uh in this stuff and try to open up this tool to solve it thank you

any other members seek recognition ranking member meeks

yeah i think this should be clearly a bipartisan uh amendment that we all should support I mean, it's very simple. It just prohibits any funds provided via the FMF program, including for DCS purchases to be made from any firm from which the president, vice president, or their family members derive financial benefit. We should want them oversighting to make sure there's nothing, you know, uh, it's just to make sure that we're taking care of taxpayer dollars based upon what, uh, the remarks of, uh, Congressman O- Osinski Uh, this amendment is is needed. And it's needed due to the actions that have been already, uh, committed, uh, throughout the Trump administration. So, I strongly support the gentleman's amendment and I think that we should all, uh, and as he said, you know, I know prior administrations, we we looked at what their families did and many of colleagues on the other side of the aisle, uh, was, uh, um, um, in the forefront in that regards and so here we go to make sure that we stop this from happening uh in this administration and I agree, it seems to be more blatant than in any other administration that I've seen. I yield back.

Gentleman yields back. Any other members seek recognition? Representative Self.

Uh, thank you, Mister Chairman. I realize uh there are there is often good reason that this season is referred to as the silly season. Uh, I recommend we get back to the foreign affairs aspect of this committee. I yield back.

Representative yields back. Any other members seek recognition? Recognize myself. I oppose this amendment, and I oppose the idea that in any way, shape or form, this administration, the Department of War is doing anything other than procuring the best military equipment to support our war fighters in any space that they are in combat operations. This administration works to put the United States of America first, our service members first, to make sure that we deal with, I know it was said earlier that there's, there's No reason to uh combat Iran. The reasons to combat Iran are plentiful, and they have been agreed upon bipartisanly until there was a President Trump. And this is another example of partisan politics at play. Uh, what's going on with procurement for our military and the systems that are used by them is to make sure that they have the absolute best that they can get their hands on to give our service members the best opportunity for success and coming home, pure. Any other members seek recognition? Seeing none. Being no further discussion, the question now occurs on the amendment offered by Representative Olchewski.

Correct.

All those in favor, signify by saying aye.

Aye.

All those opposed, signify by saying no. No. Pending the chair, the noes have it, and the amendment is not agreed to. A roll call vote has been requested. Are there any further amendments? Very good. Representative Castro is recognized.

Uh, thank you, Chairman. I have it amendment number one thirteen.

Well Very good. Clerk shall distribute the amendment. Clerk shall report the amendment.

Amendment number one hundred and thirteen to HR eight six four nine, offered by Mister Castro of Texas. After section two, insert the following new section.

thank you uh this amendment is fairly straightforward under current law section thirty six of the arms export control act requires congressional notification for major fms sales and major dcs licenses in the case of foreign military sales the government to government process those sales are publicly disclosed immediately after being finalized for direct commercial sales while the administration is required to submit the unclassified notifications to the Congress, they do not immediately publish them for the public to view. And it can take months or even a year for those notifications to be shared publicly, and when they are, important information is often missing. This amendment fixes that gap, requiring unclassified information regarding direct commercial sales to be shared publicly, and clarifying that foreign military sales should also be shared publicly, uh, as is the custom now. The fact is that sales under direct commercial sales have less transparency than the foreign military pro- sales process. So, if we're gonna use taxpayer funds to be allowed, if we're gonna allow for taxpayer funds to be used for direct commercial sales, those transactions must have the same degree of transparency as foreign military sales. That asymmetry is hard to justify when, under this bill, we're now talking about using public FMF funds to finance those dcs transactions and i urge my colleagues to support this amendment i yield back

do any other members seek recognition representative self

uh thank you mister chairman i have a question for mister castro this is only for fmf funded sales is that correct all dcs all dcs sales

aha thank you i yield back

any other members seek recognition ranking member meeks

I I support this amendment, which would provide uh basically just greater transparency uh regarding direct commercial sales arms and notifications by requiring all notification that I believe for both FMF and DCS purchases be shared publicly. That's basically what it does. So that information scores uh, creates transparency. That's all that this amendment is doing. It's trying to make sure that it's a transparent policy uh for a notification for and DCS purchases. You're back. Ranking member yields back. Representative Baumgartner.

Uh, thank you, Mr. Chair. I would ask that we reject this amendment. Uh, I think it's redundant of current policy and this information would still be available uh to Congress. And we can, I think if we think through this amendment, we could all understand uh the challenges uh of this uh sensitive information uh uh being out in the open. And I'll again, I'll just point out that uh the underlying bill is supported by the

Any other members seek recognition? Recognized myself. Uh, in keeping with Mr. Baumgartner's comments, I will reiterate, I agree with its redundancy. Uh, under current law, the process uh, is this, the State Department's Directorate for Defense Trade Controls, publicly post DCS licenses above congressional notification threshold on publicly available web site in the Federal Register. Uh, and for that reason, uh, again, I agree with the, your argument about the redundancy of this. Any other members seek recognition? Seeing none. There being no further discussion,

Aye.

All those opposed, signify by saying no, no, opinion of the chair, the no's have it, and the amendment is not agreed to.

I ask for a roll call vote.

A roll call vote has been requested. Pursuant to the chair's previous announcement, that vote will be postponed. Are there any further amendments? Seeing none.

Um, we're just gonna do it next.

Very good. We're good on that. Good. You're you're good on that, the previously uh request for a recorded vote? Oh yeah, yeah. Yeah, everything's clear. Good. Yep. Pursuant to notice, I now call up HR eight six six five, the Allied Defense Sales Act. The bill was circulated in advance and the clerk shall designate the bill.

HR eight six six five, to require the implementation of a strategy to encourage foreign partners to participate in the foreign military sales and direct commercial sales process on a multinational basis and for other purposes.

Without objection, the first reading is dispensed with and the bill is

Thank you,

Thank you.

Mister Chairman, and I urge support for my bipartisan bill, the Allied Defense Sales Act. Our allies should be fighting adversaries and not red tape. Right now, too many of our partners want to buy American-made defense equipment, because quite frankly, it's the best in the world. But they're stuck in a process that is uh slow, complicated and often too difficult for smaller countries to navigate on their own. This effort does not create a blank check or weakened oversight. In fact, it follows current law with Leahy Act, the Child Soldiers Act, among others. But it does direct the State Department to identify eligible countries, assets, and lead purchases coordinators to review the f- the financial barriers and report back to Congress on the challenges, solutions, and any legislative changes that are needed. It also asks the State Department to speed licensing and sales, support exportable defense articles, and strengthen important partners. like AUKUS, which is absolutely critical to our defense and deterrence in the Pacific. This bill is largely intended to target smaller countries, such as the Baltics, Southeast Asian countries, and Caribbean nations, who by themselves don't have the resources to participate in the large FMS case programs, which tends to require familiarity with complex US bureaucratic systems procedures and processes. These countries, however, benefit significantly from the FMS case. Remember there are articles that are FMS only, that is, that are needed for deterrence, and especially in those smaller countries. Specifically, the defense relationship, uh, needs to be built as well. This is a common sense, bipartisan bill. It helps our allies buy American. It helps American workers build more, faster, and helps the United Strengths project's strength, uh, with always putting America's troops first in combat. The provisions in this bill were originally voted out of this committee through the state reauthorization mark-up last year, and I urge my colleagues to support the Allied Defense Sales Act, and I stand by it for questions.

Representative Yields-Vac, do any other members seek recognition? Ranking member Meeks.

Uh, I want to thank Representative Zinke and Farah for this bill. I support this bill. While most foreign defense sales are conducted by individual countries as purchasers, multi-country purchases, can provide more competitive pricing, coordination, and other benefits, including for smaller countries, which are less frequent purchasers, as well as multinational alliances like the NATO Support and Procurement Agency. The bill also includes reporting requirements, providing Congress with details on the strategy and its implement implementation. And while multinational purchases are not currently prohibited by statute, this bill requires a strategy for promoting, and making available options for multinational cases to purchasing countries and an accompanying report to Congress. This will be beneficial to both the United States and our partners and allies, and provides helpful additional information to Congress as we conduct necessary oversight. I yield back.

Ranking member yields back. I'm gonna recognize myself for a moment. I wanna thank Representative Zinke for his leadership legislation and for leading our arms sale task force. Again, another thank you to that. There's a lot of important work that was done there. This bipartisan bill would break down barriers for smaller countries who are interested in participating in the US foreign military sales system. Currently, many capable partner nations are effectively locked out of the US foreign military sales system, simply because they lack the financial or administrative resources to navigate it alone. Multinational purchases are currently an allowable sales mechanism. But lack of advocacy in education over the years has effectively made their use non-existent. The bill requires the State Department to incentivize these smaller nations to participate in multinational purchases and allows smaller countries to pool resources to purchase American equipment. Doing so would expand America's circle of equipped allies without requiring new foreign aid spending. It would strengthen the very integration that gives American-led alliances a decisive edge over our adversaries. This bill also allows for larger consolidated orders for us defense manufacturers rather than just fragmented small volume purchases. Bigger contracts mean longer production runs, lower per unit costs, and more sustained work for American defense workers. Keeping our allies buying American equipment is critical to an America first approach to foreign defense sales. And again, I want to urge my colleagues to support this and I thank the the representative for his work on this. Do any other members seek recognition? Seeing none. Being no further discussion of the bill, the committee will move to consideration of amendments. Does any member wish to offer an amendment? Seeing none.

one moment

You can just give me another page.

I give you

No.

sheets but These are the Winston Churchill quote.

Hmm?

Uncooked and over a stop.

No you don't. Alright. Being no further discussion on amendments.

Is this the bill?

No. That what you're looking for? There you go. Just wanna keep you in suspense, Mister Zinke. You'll never know whether you're.

You have the insistence.

This is this is this is how to do a bill though, when when both sides agree. I'm I'm wondering if I shouldn't have shouldn't have pushed it more, but

Yes, you'll you'll never know whether this, whether your bill gets to advance.

Hmm.

Very good. Uh. Do you have that?

OK, no, I'll just read it.

Thank you. Being no further discussion of amendments. I move that the committee report H R eight six six five as amended to the house with a favorable recommendation. All those in favor signify by saying aye.

Aye.

Aye. All those opposed signify by saying no. Depending the chair, the ayes have it and the motion is agreed to. Would you like your roll call vote?

I have a

A roll call vote has been requested. Pursuant to the chair's previous announcement, that vote will be postponed. Ready? Here we go. Pursuant to notice, I now call up H R eight six six one, the Foreign Military Financing Loan Authorization Act of twenty twenty six. The bill was circulated in advance and the clerk shall designate the bill.

H R eight six six one, to authorize the Secretary of State to provide certain direct loans and loan guarantees for the procurement of defense articles, defense

Without objection, the first reading is dispensed with and the bill is considered read and open to amendment at any point does any member seek recognition? Recognized, go ahead.

For decades the US has provided taxpayer funded foreign military financing, or FMF, to certain foreign allies and partners in the form of grants. While grants have long comprised the vast majority of fmf financing to foreign allies and partners. On certain occasions, when specifically congressionally mandated, the US has supplemented grant assistance with fmf loans to enable greater trade purchasing by recipients. Examples of such loan requests include Poland, Romania, and Taiwan. The Trump administration has sought to replace fmf grants with fmf loans, often using isolationist rhetoric. circumstances of long standing alliance structures to justify the shift. This bill institutes an unbounded global authority allowing the administration to provide FMF direct loans, funded by US taxpayers, as well as a global authority allowing for loan guarantees, where a third-party lender provides the funds backed by the US government to any foreign country. This bill does not limit the country, amounts, or size of loan, providing broad latitude to the secretary of state to establish the full range of loan terms. I am supportive of supplementing our national security strategy and our U S security assistance with loans, which can be helpful. As well as additive to to the U S allies and partners to strengthen their defense capabilities and increase their military capacity. So I thank the Chairman. I'm glad that the Chairman and I were able to arrive at an agreement on an important amendment that I will offer which clarifies the intent and implementation implementation of the expanded FMF loan and with that I yield back, Mister Chairman.

Ranking member yields back. Any other members seek recognition? Recognize myself? President Trump's executive orders on improving arms sales made clear that expanding US defense exports is both a national security and economic necessity. This bill authorizes a direct financing mechanism to make that happen on terms that put America first. Foreign military financing has historically been provided to our foreign partners and allies on a non-repayable grant basis. While this is positive for our industries and our military interoperability, we need to also be able to offer financing terms that are more attractive to current and future recipients. Russia, China, and others not only sell weapons, they finance them with favorable terms designed to lock developing into long-term dependence. Even our allies have expanded their defense financing options, such as the European Union's one hundred and seventy-five billion dollar SAFE program. This legislation gives the State Department a powerful tool to compete against agr- to compete aggressively in the global defense market, and ensure that when allies buy, they buy American. This legislation would authorize the State Department to issue foreign military financing loans and loan guarantees taking an America-first approach to ensure that our deal DIB has more opportunities to capture the international market. It also authorizes the State Department to establish flexible terms for such loans, so that they are more competitive and stay on terms that are beneficial to the United States. And it authorizes the State Department to use money collected from FMS administration fees to fund its activities, to help fund the additional activities created by this legislation and recent, executive order changes. This builds the definition of America first, and I urge my colleagues to support it.

Amendment to HR eight six six one offered by Mister Meeks of Amendment.

Without objection, further reading of the amendment is dispensed with. Seek recognition.

Yes.

Making members recognized.

This amendment, which is the product of extensive negotiations with the majority, modifies and improves a number of provisions on the underlying bill, while retaining its core focus of providing additional FMF authority to support US allies and partners with loans and loan guarantees. First, and critically, It adds a statement of policy affirming as the use of FMF loans as a supplement to but not in place of grant assistance, thereby sending a strong and clear signal to our allies and partners across the world that we stand with them, not just transact with them. Second, it appropriately establishes a seven year sunset for the authorized program, at which point Congress can evaluate its effectiveness and you before further legislating on it. Next, it stipulates that any loan provided under this time-bound authorization must be offered at current market rate, instead of a rate set by the secretary of state that could be subject to politicization and provides further clarifications as to the uses of FMS fees so they may not be abused or diverted for other purposes. Let me thank Chairman Mass uh for his work on this.

Recognize myself for a moment. I also support this amendment. I thank ranking member Meeks for his work on it. This bipartisan amendment would add a necessary sunset to the bill, as well as a statement of policy and expanded reporting requirements. Uh, so I thank you for your work on this. I'm glad we could work on it, and I recommend a yes vote. Do any other members seek recognition?

Thank you.

Seeing none. There being no further discussion, the question now occurs on the amendment offered by ranking member Meeks. All those in favor signify by saying aye.

Aye.

All those opposed signify by saying no. Pending to the chair, the ayes have it and the amendment is agreed to. Are there any further amendments?

Roll call.

Roll call has been requested. We'll do that. Any further amendments? Representative Castro.

I have amendment one ten at the desk.

Clerk shall distribute the amendment and the clerk shall report the amendment.

Amendment number one hundred and ten to H R eight six six one, offered by Mister Castro of Texas.

Without objection for the reading of the amendments dispensed with, representative is recognized.

Uh, thank you. I wanna start by saying that I understand what the bill is trying to do. And I don't think the goal of expanding financing tools for our partners is inherently wrong. Uh, we do need to help allies build their own defense capacity, and I very much get that. But I have serious concerns about how this bill does it. And I think we owe it to the American taxpayer and the American people to be honest about the history here before we vote. We've been down this road before. The For- Foreign Military Sales Direct loan program was extensively used throughout the nineteen seventies and nineteen eighties. At its peak, we were financing the majority of US arms transfers through government-to-government concessional loans. And what happened? Country after country defaulted on those loans. By nineteen eighty-five, the GAO documented that the US government had already paid out one point seven billion dollars on defaulted guaranteed M uh M FMS loans. This is money that American taxpayers were on the hook for when foreign governments couldn't make good on their obligations. And that's in nineteen eighty-five dollars. Turkey went into severe arrears. Sudan defaulted. Liberia defaulted. Somalia defaulted. And in nineteen ninety, we cancelled six point seven billion dollars in Egyptian FMS debt. That was real money that American taxpayers never got back. Essentially, it turned into free money for these countries. And then, in nineteen ninety-four and nineteen ninety-seven, we canceled Jordan's entire remaining military debt balance, another seven hundred million dollars, as part of the peace treaty package. Realizing this, our country transitioned to primarily grant-based foreign military financing. And I worry that a return to loans without sufficient safeguards would result in the same challenges that we faced decades ago, where countries end up in debt and we end up forgiving their loans and essentially giving them free money. I think it's quite ironic for a Congress that has criticized and curtailed foreign assistance and foreign aid to re-enter a system that we know through history ended up in defaults and essentially taxpayer giveaways. This amendment directs the Government Accountability Office to conduct an independent review of the entire loan and loan guarantee portfolio, established under this bill. The GAO would conduct this independent review every two years, assessing whether the portfolio as a whole is fiscally sound, including whether the department is setting realistic interest rates and repayment terms and whether those rates and terms are being applied consistently, across countries. The review country-by-country assessments and loan-by-loan assessments. It's not the job of the State Department to audit itself, and it's not sufficient for Congress to rely solely on the annual report the Secretary submits. I'll report the Secretary controls, covering transactions the Secretary approved, on terms the Secretary set. The requirement for a GEO review would persist for as long as the program is authorized or if there are outstanding loans or loan guarantees under the program, even

Any other members seek recognition? Recognize myself for a moment. I oppose this amendment. Uh, this would create an unnecessary additional bureaucratic reporting on a bill that already has robust reporting requirements. And that, any other