U.S. Secretary of State Antony Blinken pushed the Senate on Wednesday to approve $2 billion in spending for infrastructure projects worldwide, but appeared to be rebuffed with a key Republican senator questioning the chances such money could be found.
Amid a Republican-led push to cut spending and bring the U.S. federal budget into the black for the first time since 2001, it marked the latest roadblock in long-running U.S. government efforts to establish even a modest alternative to Beijing’s $1-trillion Belt and Road Initiative.
Blinken said the State Department was seeking $400 million in mandatory spending “to counter specific actions by China” in the Indo-Pacific and $2 billion for “high-quality infrastructure projects to more effectively compete with the work that China does.”
He said the funding was needed to help private U.S. businesses offer an alternative to the extravagant infrastructure spending by Beijing, noting an opportunity as countries grapple with associated debt.
“We’ve seen something of a backlash against this in country after country, where it turns out that taking this money is not necessarily leaving countries in the best place,” he said. “It’s been a double-edged sword for a lot of people. Nonetheless, the resources are significant.”
The top U.S. diplomat was speaking to the Senate Foreign Relations Committee to defend the State Department’s portion of the Biden administration’s 2023 proposed budget, after earlier also testifying to the Senate Appropriations Committee about the funding request.
Tight purse strings
During his testimony, Blinken acknowledged that the State Department’s request for $2 billion for infrastructure paled in comparison to the loans and grants offered by Beijing.
But he said many countries would prefer U.S.-built projects, if that were an option, and said the proposed spending was only meant to augment much larger investments by the American private sector.
“We need to be able not, of course, to match them dollar for dollar, which we’ll never do,” Blinken said of the Chinese government, “but [we need] to be more effective in catalyzing private sector investment, and doing it in a more coordinated way with allies and partners.”
He said that China’s authoritarian system allowed its Belt and Road Initiative to “mobilize all of the resources of the state” to invest around the world “in loss-leader projects, because it’s strategically important to them.” That was not an option for the U.S. government, he said.
“Our comparative advantage is finding ways to catalyze – more effectively – private-sector investment,” Blinken added. “We need to be able to do that by putting some of our own money down.”
The Center for Global Development has estimated that the Belt and Road Initiative– a state-led program for infrastructure projects tying countries across Asia and beyond to China – could end up costing Beijing some $8 trillion by the time it is completed, a figure that dwarves Blinken’s $2 billion proposal.
Senators on the foreign relations committee, led by Sen. Jim Risch of Idaho, its ranking Republican, said they agreed with the principle of the proposal. But Risch wondered if the $2 billion would be approved once the House and Senate finish negotiations on the federal budget.
“Fair enough,” Risch said of the proposal. “Although I think you would agree with me that the $2 billion in mandatory [spending] is going to be tough to do. It’s probably going to be a heavy lift for the appropriators.”
“We’re going to have, you know, some top-line budget challenges,” Blinken replied, “depending on how these funds are apportioned.”
“That’s an understatement,” Risch said.
Risch also questioned why the State Department budget proposal only included $16 million in aid to Taiwan, which he said was too low.
“I was deeply disappointed when I saw what was proposed,” Risch said. “The $16 million doesn’t even pay the carfare over there.”
Earlier in the day, Sen. Lindsey Graham, a Republican from South Carolina and the party’s ranking member on the appropriations committee, had raised a similar question. Graham asked Blinken why the Biden administration was not learning from the Ukraine war and further arming Taiwan now in advance of any potential invasion.
Another member of the appropriations committee, Sen. Bill Haggerty, a Republican from Tennessee, also asked why there was a $19 billion backlog in arms sales to Taiwan as Beijing threatened an invasion.
“We had an opportunity for deterrence with Ukraine. We didn’t take it,” Haggerty said to Blinken. “We have the opportunity here.”
Blinken said Taiwan was not in need of aid. He noted that Taipei had in fact purchased about $10 billion in arms from the United States since 2019, and recently increased its own defense budget by 11%.
“When it comes to Taiwan, what we’ve been focused on is foreign military sales,” Blinken told the foreign relations committee in the afternoon. “It has significant means to acquire this technology.”
Instead, the issue was U.S. capacity to manufacture arms.
“One of the challenges we have has little to do with our budgets or our authorities,” he said. “The long pole in the tent in providing equipment to Taiwan to defend itself is the production capacity here, and this is something of course that we’re working on.”