Tag Archives: U.S. Congress

U.S. spending bill tackles border, election security: source

FILE PHOTO: U.S. border patrol officers are pictured near a prototype for U.S. President Donald Trump's border wall with Mexico, behind the current border fence in this picture taken from the Mexican side of the border in Tijuana, Mexico

By Richard Cowan

WASHINGTON (Reuters) – A federal government spending deal being worked out in the U.S. Congress includes additional funding to boost border security, protect the upcoming elections in November and rebuild aging infrastructure, a source familiar with the negotiations said on Wednesday.

While the source said a final overall spending agreement had not been reached, other Republican and Democratic congressional aides have told Reuters that leaders plan to unveil their agreement on the $1.3 trillion spending bill later on Wednesday.

Lawmakers in the Republican-controlled Congress have until Friday night to reach a deal before a lapse would force federal agencies to suspend operations. The current plan would provide for government funding through Sept. 30, after a series of short-term funding measures implemented since last fall.

Republican leaders in the House and Senate said on Tuesday they were close to a deal and hoped to complete legislation by Friday as they worked to overcome divisions over several thorny issues such as President Donald Trump’s proposed border wall.

So far, the package provides $1.6 billion for some fencing along the U.S. border with Mexico and other technological border security efforts, the source said.

Trump had sought $25 billion for a full wall, but negotiations fell through to provide more money in exchange for protections for “Dreamers,” young adults who were brought illegally into the United States as children.

The spending plan also provides $307 million more than the Trump administration’s request for the FBI to counter Russian cyber attacks, and $380 million for U.S. states to improve their technology before November’s congressional election, according to the source.

U.S. intelligence agencies have concluded that Russia sought to meddle in the 2016 presidential election campaign, and intelligence chiefs said last month that Russia will seek to interfere in the midterm elections this year by using social media to spread propaganda and misleading reports. Russia has denied any interference.

The planned spending measure allocates $10 billion for spending on infrastructure such as highways, airports and railroads. It also includes money for the so-called Gateway rail tunnel connecting New York and New Jersey, the source said.

Trump has threatened to veto the bill if the Gateway project is included. While its funds remain, they are directed through the U.S. Department of Transportation, rather than provided directly, Politico reported.

Additionally, lawmakers’ added $2.8 billion to address opioid addiction, the source said.

One potential stumbling block includes gun-related provisions prompted by a mass shooting at a Florida high school on Feb. 14 that killed 17 students and faculty members. On Tuesday, as another shooting swept over a high school in Maryland, House Speaker Paul Ryan said lawmakers were still discussing a proposal to improve federal background checks for gun purchases.

Another issue tying up negotiations was tax treatment for grain co-ops versus corporate producers, according to Politico.

(Reporting by Richard Cowan, Susan Heavey, Lisa Lambert; Editing by Doina Chiacu, Bernadette Baum and Frances Kerry)

Congress struggles to meet deadline for government funding bill

People walk by the U.S. Capitol building in Washington, U.S., February 8, 2018. REUTERS/Leah Millis/File Photo

By Richard Cowan

WASHINGTON (Reuters) – The U.S. Congress, facing a Friday midnight deadline, toiled on Monday to finish writing a $1.2 trillion bill to fund the federal government through Sept. 30, as several thorny issues lingered, including funding President Donald Trump’s border wall.

A range of other hot-button initiatives was also slowing the unveiling of legislation that the Republican-controlled House of Representatives had aimed to make public late on Monday.

Republican lawmakers exiting a private meeting with House Speaker Paul Ryan said, for example, that there still was no decision on whether a couple of narrow, gun control-related measures could be inserted into the massive spending bill.

A Feb. 14 mass shooting at a high school in Parkland, Florida, has given impetus to a bill that would improve background checks for gun sales and another that would spend money to help schools defend themselves against gun violence but without putting new limits on weapons sales.

Republican Representative Mike Simpson, a senior member of the House Appropriations Committee, noted there was Republican opposition to the gun measures unless other steps such as expanding gun owners’ rights to carry concealed weapons across state lines were also enacted.

Simpson and other lawmakers said they did not know the fate of a move to include around $1.6 billion in funding for the border wall with Mexico, which is opposed by many Democrats and some Republicans.

“Everything that was significant is a work in progress. There is nothing defined” yet, said Republican Representative Mark Meadows, who heads the right-wing House Freedom Caucus.

Talks were expected to go late into the night.

Lawmakers were hoping to pass the “omnibus” spending bill before the start on Saturday of a two-week spring break. Doing so would put an end for six months to the possibility of any more government shutdowns by funding federal agencies for the rest of this fiscal year.

The federal government was forced to close over a weekend in January because of a similar budget battle.

POLARIZING MEASURES BEING SHELVED

With government funding running out at week’s end, several contentious items were tentatively being killed off to help speed passage of a bill that will significantly increase U.S. defense spending as well as many non-defense programs.

Several Republican lawmakers said a move had failed to renew federal subsidies to health insurers, which would help make “Obamacare” more affordable for low-income people.

Attempts to bolster the Affordable Care Act appeared to have collapsed after Republicans insisted on language that would have placed abortion prohibitions on those insurance plans and Democrats refused to go along.

“The speaker (Ryan) just said it wasn’t in there,” Meadows told reporters.

Trump discontinued the subsidy payments last year.

Trump also has threatened to veto the bill if it contains federal payments for constructing a New York-New Jersey railroad tunnel project known as the Gateway Program. Lawmakers said congressional leaders were still arguing over that money.

Three Republican House members told reporters that a separate initiative to impose an internet sales tax also appeared to be doomed.

Simpson, asked whether there were worries that the House and Senate would be unable to approve the spending bill before existing agency funds run out, said: “There’s always worries about that.”

Republican leaders were hoping to hold the House debate and votes on Wednesday, giving the Senate a couple more days to do the same before the Friday deadline. But the House timetable might have to be delayed a day, some aides and lawmakers said.

(Reporting by Richard Cowan; Editing by Peter Cooney)

Hundreds leave homes near dangerously crumbling Puerto Rico dam

Local residents look at the flooded houses close to the dam of the Guajataca lake. REUTERS/Carlos Garcia Rawlins

By Dave Graham and Robin Respaut

SAN JUAN (Reuters) – Most people living near a crumbling dam in storm-battered Puerto Rico have been moved to safety, Governor Ricardo Rossello said on Monday, as he urged the U.S. Congress to fund an aid package to avert a humanitarian crisis after Hurricane Maria.

Most of the Caribbean island, a U.S. territory with a population of 3.4 million, is still without electricity five days after Maria swept ashore with ferocious winds and torrential rains, the most powerful hurricane to hit Puerto Rico for nearly a century.

There have been growing concerns for some 70,000 people who live in the river valley below the Guajataca Dam in the island’s northwest, where cracks were seen appearing on Friday in the 88-year-old earthen structure.

An aerial view shows the damage to the Guajataca dam. REUTERS/Alvin Baez

An aerial view shows the damage to the Guajataca dam. REUTERS/Alvin Baez

Rossello said he was working on the assumption that the dam would collapse. “I’d rather be wrong on that front than doing nothing and having that fail and costing people lives,” he said in an interview with CNN.

“Some of the dam has fallen apart and now we’re making sure that we can assess if the other part is going to fall down as well. … Most of the people in the near vicinity have evacuated.”

It was unclear if the governor was saying that most of the 70,000 valley inhabitants had left the area, or only the several hundred people living in the small towns closest to the dam. About 320 people from those towns have moved to safety, according to local media.

The fear of a potentially catastrophic dam break added to the difficulties facing disaster relief authorities after Maria, which was the second major hurricane to strike Caribbean this month and which killed at least 29 people in the region.

At least 10 of those who died were in Puerto Rico, including several people who drowned or were hit by flying debris, and three elderly sisters who died in a mudslide.

Many structures on the island, including hospitals, remain badly damaged and flooded. Clean drinking water is hard to find in some areas. Very few planes have been able to land or take off from damaged airports.

After Maria caused widespread flooding, the National Weather Service warned of further flash floods in some western parts of the island on Monday as thunderstorms moved in.

The hurricane hit at a time when Puerto Rico was already battling economic crisis. [nL2N1M31LR]

Rossello said on Monday that before the storms struck he had been embarking on an aggressive fiscal agenda that included more than $1.5 billion in cuts.

“This is a game changer,” the governor told CNN. “This is a completely different set of circumstances. This needs to be taken into consideration otherwise there will be a humanitarian crisis.”

In Washington, U.S. House of Representatives Speaker Paul Ryan said Congress was working with President Donald Trump’s administration to make sure the necessary assistance reaches Puerto Rico.

“Our fellow citizens in Puerto Rico remain in our prayers as we make sure they have what they need,” Ryan said in a statement.

Local residents react while they look at the water flowing over the road at the dam of the Guajataca lake.

Local residents react while they look at the water flowing over the road at the dam of the Guajataca lake.
REUTERS/Carlos Garcia Rawlins

Maria continued to weaken and would likely be downgraded from a hurricane to a tropical storm by Tuesday night, the National Hurricane Center said. As of 11 a.m. ET (1500 GMT) on Monday, it was about 315 miles (505 km) south-southeast of Cape Hatteras, North Carolina, heading slowly north, the center said.

The storm was unlikely to hit the continental United States directly, but a tropical storm warning was in effect for much of the North Carolina coast. Officials issued a mandatory evacuation order for visitors to Ocracoke Island in the Outer Banks, beginning at 5 a.m. ET (0900 GMT) on Monday.

 

(Reporting by Dave Graham and Robin Respaut; Additional reporting by Jonathan Allen and Peter Szekely in New York and Doina Chiacu in Washington; Editing by Daniel Wallis and Frances Kerry)

 

Stalled Russia sanctions bill hits North Korean snag in U.S. Congress

The U.S. Capitol building is seen before U.S. President Barack Obama delivers his State of the Union address in front of the U.S. Congress, on Capitol Hill in Washington January 28, 2014. REUTERS/Jim Bourg

By Patricia Zengerle

WASHINGTON (Reuters) – A bill that many lawmakers hoped would send a message to President Donald Trump to keep a strong line against Russia hit a new snag in the U.S. House of Representatives on Friday, as Republicans proposed combining it with sanctions on North Korea.

The Russia sanctions bill passed the Senate on June 15 by 98-2, but it has not come up for a vote in the House.

The chamber’s Republican leaders initially said there was a technical problem with how the bill was written, but after the Senate altered the bill to fix it, the measure still did not move.

On Friday, Republicans suggested reworking the legislation to add new sanctions on North Korea. The Russia sanctions measure passed by the Senate is part of a broader bill that also includes new sanctions on Iran.

House Majority Leader Kevin McCarthy said he wanted the North Korea sanctions added to the bill.

“It would be a very strong statement for all of America to get that sanction bill completed and done, and to the president’s desk,” the Republican lawmaker said in the House as it wrapped up its activity for the week.

Democrats rejected the suggestion as another tactic by Republicans supporting White House objections to the bill.

“This isn’t a serious proposal. It’s the latest delay tactic,” said Representative Eliot Engel, the top Democrat on the House Foreign Affairs Committee.

The House passed a new package of sanctions on North Korea in May by 419-1, and Senate Foreign Relations Committee Chairman Bob Corker, a Republican, said on Thursday his committee would be taking it up soon.

On Friday, Corker said he would be “more than glad” to consider adding North Korea to the legislation if the House chose to do so.

Engel said there was no point in passing North Korea legislation again.

The Trump administration objects to a provision in the Russia bill that sets up a process for Congress to approve any effort by the president to ease sanctions on Moscow.

Seeking a greater influence in foreign policy, Congress has included provisions in a few recent major bills, starting with Corker’s 2015 legislation forcing congressional review of President Barack Obama’s nuclear deal with Iran.

Lawmakers and aides have been negotiating for weeks to try to craft a compromise that would allow the Russia-Iran bill to move forward. On Thursday, they said they thought it could advance soon but on Friday said the North Korea issue made that less likely. [L1N1K42BV]

(Reporting by Patricia Zengerle; Editing by Cynthia Osterman)

U.S. Congress negotiators set spending plan to avert shutdown, bolster defense

The U.S. Capitol Dome is seen before dawn in Washington.

By Richard Cowan

WASHINGTON (Reuters) – Negotiators in the U.S. Congress reached a deal late on Sunday on around $1 trillion in federal funding that would avert a government shutdown later this week, while handing President Donald Trump a down payment on his promised military build-up.

The full House of Representatives and Senate must still approve the bipartisan pact, which would be the first major legislation to clear Congress since Trump became president on Jan. 20.

Prompt passage of the legislation was expected this week.

The funds, which should have been locked into place seven months ago with the start of fiscal 2017 on Oct. 1, would pay for an array of federal programs from airport and border security operations to soldiers’ pay, medical research, foreign aid, space exploration, and education.

“The agreement will move the needle forward on conservative priorities and will ensure that the essential functions of the federal government are maintained, said Jennifer Hing, a spokeswoman for Republicans on the House Appropriations Committee.

If it is not enacted by midnight Friday, federal agencies would have to lay off hundreds of thousands of workers and require many others to continue on the job providing law enforcement and other essential operations without pay until the funding dispute in Congress is resolved.

“This agreement is a good agreement for the American people  and takes the threat of a government shutdown off the table,” Senate Democratic leader Chuck Schumer said in a statement.

He said the measure would increase federal investments in medical research, education, and infrastructure.

House and Senate appropriators worked into the night to draft the legislation for lawmakers to review.

Republican Representative Jim Jordan, chairman of the conservative House Freedom Caucus, said he and other conservatives likely would not back the measure because it does not fulfill their promises to voters.

“I’m disappointed,” Jordan told CNN. “We’ll see how it plays out this week but I think you’re going to see conservatives have some real concerns with this legislation.”

A senior congressional aide said the Pentagon would win a $12.5 billion increase in defense spending for the fiscal year that ends on Sept. 30, with the possibility of an additional $2.5 billion contingent on Trump delivering a plan to Congress for defeating the Islamic State militant group.

Trump had requested $30 billion more in military funds for this year after campaigning hard on a defense build-up during the 2016 election campaign.

NO WALL MONEY

Several other important White House initiatives were rejected by the Republican and Democratic negotiators, including money for a wall on the U.S.-Mexico border that Trump has argued is needed to stop illegal immigrants and drugs.

Instead, congressional negotiators settled on $1.5 billion more for border security, including more money for new technology and repairing existing infrastructure, the aide said.

Trump, in excerpts from a CBS News interview to air later on Monday, said a separate infrastructure plan would come within three weeks.

The Trump administration had earlier backed away from a threat to end federal subsidies for low-income people to get health insurance through Obamacare, the program that Trump had pledged to repeal.

Republicans are struggling over a repeal and replacement plan for former President Barack Obama’s landmark healthcare law and it was unclear whether they would be able to bring such legislation to the House floor soon.

While Republicans control the House, Senate and White House, Democrats scored other significant victories in the deal.

Puerto Rico would get an emergency injection of $295 million in additional funding for its Medicaid health insurance program for the poor, according to the aide who asked not to be identified. The impoverished island, which is a U.S. territory, is facing a severe Medicaid funding shortfall.

Democrats also fended off potential cuts to women’s healthcare provider Planned Parenthood, while House Democratic leader Nancy Pelosi applauded a nearly $2 billion hike in funds for the National Institutes of Health this year.

Coal miners and their families facing the loss of health insurance next month would get a permanent renewal under the spending bill.

While Trump has urged Congress to impose deep cuts to the Environmental Protection Agency, most of its programs would be continued for at least the remainder of this year, according to the aide.

The House is likely to vote first on the package, probably early in the week, and send the measure to the Senate for approval before Friday’s midnight deadline.

If the legislation is enacted by week’s end, Congress would then have to begin focusing on a series of bills to fund the government at the start of the next fiscal year on Oct. 1.

(Additional reporting by Susan Heavey; Editing by Paul Tait and Chizu Nomiyama)

Congress remains overwhelmingly Christian as U.S. shifts

U.S. President Barack Obama (L-R), House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) bow their heads in prayer at the end of a ceremony commemorating the 150th anniversary of the 13th Amendment, which formally abolished slavery in the aftermath of the U.S. Civil War, at the U.S. Capitol in Washington

By Ian Simpson

WASHINGTON (Reuters) – The U.S. Congress taking office on Tuesday remains almost as overwhelmingly Christian as it was in the 1960s even while the share of American adults who call themselves Christians has dropped, according to Pew Research Center analysis.

A report from the nonpartisan group said that 91 percent of lawmakers in the Republican-dominated 115th Congress described themselves as Christians, down slightly from 95 percent in the 87th Congress in 1961 and 1962, the earliest years for comparable data.

By contrast, the portion of American adults who call themselves Christian fell to 71 percent in 2014, the Pew report said. While Pew did not have numbers for the early 1960s, a Gallup survey from that time found that 93 percent of Americans described themselves as Christian.

“The most interesting thing is how little Congress has changed over the past several decades, especially in comparison with the general public,” Aleksandra Sandstrom, the report’s lead author, said in a telephone interview.

The biggest gap between Congress and other Americans was among those who said they have no religion. Only one lawmaker, Democratic Representative Kyrsten Sinema of Arizona, called herself religiously unaffiliated. The Pew survey found that 23 percent of Americans described themselves the same way.

The percentage of Americans who have no religion has grown, but the portion of voters who said in exit polls that they have no religion is lower than the share of the general public, said Greg Smith, a Pew expert on the U.S. religious landscape.

“The political power of that group might lag their growth in the overall population,” he said.

Among the 293 Republicans elected to the new Congress, all but two identify as Christians. The two Jewish Republicans – Lee Zeldin of New York and David Kustoff of Tennessee – serve in the House.

The 242 Democrats in Congress are 80 percent Christian, but that side of the aisle includes 28 Jews, three Buddhists, three Hindus, two Muslims and one Unitarian Universalist.

The share of Protestants in Congress has dropped to 56 percent today from 75 percent in 1961, while the portion of Catholics in Congress has risen to 31 percent from 19 percent.

The U.S. population in 2014 was 46.5 percent Protestant and 21 percent Catholic, the Pew survey showed.

The survey was based on data gathered by CQ Roll Call through questionnaires and phone calls to members of congress and candidates’ offices.

(Reporting by Ian Simpson; Editing by Scott Malone and Grant McCool)

Republicans in turmoil on first day of U.S. Congress in Trump era

The U.S. Capitol Building is lit at sunset in Washington, U.S.,

By Richard Cowan and Susan Cornwell

WASHINGTON (Reuters) – The Republican-led U.S. Congress began its first session of the Donald Trump era in turmoil on Tuesday as the House of Representatives backed away from a decision to defang an ethics watchdog after a public outcry, including a dressing-down from the president-elect.

With Trump set to be sworn in as president on Jan. 20, Republicans will control both the White House and Congress for the first time since 2007, and they were set to begin laying plans for enacting his agenda of cutting taxes, repealing Obamacare and rolling back financial and environmental regulations.

But the moment was overshadowed by a surprise move by Republicans in the House of Representatives in a closed-door meeting late on Monday to weaken the independent Office of Congressional Ethics, which is in charge of investigating ethics accusations against lawmakers.

Trump, who campaigned on a pledge to “drain the swamp” and bring ethics reforms to Washington, was not pleased.

“With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it may be, their number one act and priority,” he said on Twitter on Tuesday.

“Focus on tax reform, healthcare and so many other things of far greater importance!”

The ethics office was created in 2008 following several corruption scandals but some lawmakers have charged in recent years that it has been too quick to investigate complaints from outside partisan groups.

Lawmakers wanted to have greater control of the watchdog, and inserted changes into a broader rules package, set to pass when the House convenes on Tuesday.

Even before Trump’s tweet, many House Republicans, including top leaders, opposed the measure and worried about its ramifications. Trump’s tweet prompted an emergency meeting and a quick change of course by Republicans.

“It was taken out by unanimous consent … and the House Ethics Committee will now examine those issues,” said AshLee Strong, a spokeswoman for House Speaker Paul Ryan.

Republican members of Congress watch as they and their fellow members vote for House Speaker on the first day of the new congressional session in the House chamber at the U.S. Capitol in Washington,

Republican members of Congress watch as they and their fellow members vote for House Speaker on the first day of the new congressional session in the House chamber at the U.S. Capitol in Washington, U.S. January 3, 2017. REUTERS/Jonathan Ernst

OBAMACARE IN SIGHTS

Since his election on Nov. 8, Trump has made clear he wants to move swiftly to enact proposals he outlined during the campaign such as simplifying the tax code, slashing corporate tax rates and repealing and replacing Obama’s signature health insurance program known as Obamacare.

Republicans have long sought to dismantle Obamacare, insisting it was unworkable and hampered job growth. But they face a dilemma over how to provide health insurance for the 13.8 million people enrolled in Obamacare who could lose their coverage. The law aims to provide health insurance to economically disadvantaged people and expand coverage for others.

Trump kept up his attack on Tuesday, tweeting: “People must remember that ObamaCare just doesn’t work, and it is not affordable,” and adding, “It is lousy healthcare.”

Last month Senate Majority Leader Mitch McConnell, a Republican, said in an interview with Kentucky Educational Television that before the election, he assumed Trump did not have a chance of defeating Hillary Clinton and that Democrats would retake control of the Senate, ending any talk of repealing Obamacare.

But following Trump’s win and Republicans retaining their Senate majority, the Republicans find they have to deliver on their campaign promise, even though they have not agreed on a replacement healthcare program.

McConnell has said his top priorities for the new Congress were dealing with the “massive overregulation” he said had been a brake on the U.S. economy and making changes in the tax code to stop companies from moving jobs out of the country.

Republican lawmakers also want to curtail regulations aimed at controlling industrial emissions that contribute to climate change, and roll back banking industry reforms enacted after the near-collapse of Wall Street in 2008.

Republicans might use upcoming spending bills funding government agencies to try to kill some of those regulations. Trump also is expected to try to use his executive powers toward that end.

OBAMACARE DEFENSE

The first meeting of the 115th Congress will be full of ceremony, as the 435 members of the House of Representatives and a third of the 100-member Senate are sworn in.

Amid the celebration will be a move by House Republicans to clear the decks for Obamacare repeal.

That will come in the form of a vote on rules governing House procedures in the two-year term of the chamber. Tucked into the rules package is a move to prevent Democrats from slowing or stopping Obamacare repeal legislation because of the potential cost to the U.S. Treasury of doing so.

Leading Democrats warned of a fierce battle over Obamacare and said they planned to mobilize grassroots support for it. Obama is scheduled to meet on Wednesday with congressional Democrats to discuss strategies for fending off the Republican attacks on Obamacare.

Vice President-elect Mike Pence said he would meet on Capitol Hill on Wednesday with lawmakers about plans for replacing Obamacare and rolling back other regulations.

Trump’s Cabinet nominees were to begin meeting with senators on Tuesday ahead of Senate confirmation hearings.

The Senate also is expected to receive a Supreme Court nomination from Trump early in his term to replace conservative Justice Antonin Scalia, who died last February. Republicans refused to consider Obama’s nomination of Merrick Garland last year.

Prominent Republican Senator John McCain has warned that Rex Tillerson, Trump’s choice for secretary of state, will have to explain his relations with Russian President Vladimir Putin, who McCain has called a “thug and a murderer.”

Tillerson, who spent much of his career at Exxon Mobil Corp <XOM.N>, has been involved in business dealings in Russia and opposed U.S. sanctions against Moscow for its incursion into Crimea.

(Additional reporting by Steve Holland in Washington and Gina Cherulus in New York; Writing by Richard Cowan and Roberta Rampton; Editing by Chizu Nomiyama and Bill Trott)

Negotiations for U.S. Defense aid for Israel have hit a snag

Israeli soldiers observe the area where the Israeli army is excavating part of a cliff to create an additional barrier along its border with Lebanon, near the community of Shlomi in northern Israel

By Dan Williams, Patricia Zengerle and Matt Spetalnick

JERUSALEM/WASHINGTON (Reuters) – Negotiations meant to enshrine U.S. defense aid for Israel over the next decade have snagged on disputes about the size, scope and fine print of a new multibillion-dollar package, officials say.

Five months into the talks, several U.S. and Israeli officials disclosed details about the disputes to Reuters on condition of anonymity. The U.S. and Israeli governments said negotiations were continuing, declining to elaborate.

Israel is seeking up to $10 billion more than the current 10-year package and billions more than the U.S. administration is offering, partly by asking for guaranteed funding for missile defense projects hitherto funded on an ad hoc basis by the U.S. Congress, the officials said.

U.S. President Barack Obama wants to ensure the funds, thus far spent partly on Israeli arms, are eventually spent entirely on U.S.-made weapons.

The differences partly reflect Israeli Prime Minister Benjamin Netanyahu’s vocal opposition to the international nuclear deal with Iran championed by Obama. The two sides are also at loggerheads over the Palestinians.

Israel has long been a major recipient of U.S. aid, most in the form of military assistance against a backdrop of an ebbing and flowing conflict with the Palestinians and Israel’s neighbors, as well as threats from Iran. Obama has pushed hard for a resolution to the conflict, but has made little headway.

In seeking a sharp increase in military funding, Israel argues it needs to offset military purchases by Iran, Israel’s regional arch-foe, after it secured sanctions relief in the accord limiting its nuclear program.

Israel also wants the U.S. administration to support missile defense projects that have so far relied on ad hoc assistance by the U.S. Congress, citing arms acquisitions by neighboring Arab states as well as Iran as conflicts rage in Syria and Yemen.

Obama’s administration, which has fraught relations with Netanyahu, is offering what it says is a record sum to Israel to assuage fears expressed both there and among his Republican rivals at home that the deal with Iran will endanger Israel.

But the officials say it is less money than Israel has sought overall and Obama also wants changes to allow U.S. defense firms to reap greater benefits from a new deal.

If unresolved before Obama leaves office in January, the impasse could deny him a chance to burnish his legacy with the aid package to Washington’s closest Middle East ally. That would also leave Netanyahu to await the next U.S. president in hopes of securing a better deal.

$10 BILLION MORE

The current Memorandum of Understanding (MOU), signed in 2007 and due to expire in 2018, gave Israel a total of about $30 billion, or an average of $3 billion annually, in so-called “Foreign Military Financing.”

The Israelis, whose annual defense budget is $15 billion, want at least $3.7 billion annually under the same rubric in the new MOU, officials say.

Israel also wants guaranteed missile defense aid built into the MOU for the first time, which could mean hundreds of millions of dollars more per year, bringing the full package to more than $40 billion over the next decade.

U.S. negotiators have proposed a total of between $3.5 billion and $3.7 billion in annual aid to Israel, but it was not clear if this included any money for missile defense.

The Obama administration has balked at Israel’s request to stipulate a separate funding track in the MOU for missile defense projects, one official said. It was not known how much Israel had proposed under the missile defense clause.

Israel wants the missile defense component to be “viewed as the ‘floor’ amount, as Congress can be asked for more on an ad hoc basis if circumstances require,” said one official.

U.S. lawmakers have in recent years given Israel up to $600 million in annual discretionary funds for missile defense, well beyond the $150 million requested by the Obama administration.

Palestinian rocket salvoes in the Gaza wars of 2008-9, 2012 and 2014 helped Israel drum up American sympathy and support for its anti-missile systems, Iron Dome, Arrow and David’s Sling.

More than four-fifths of the U.S. Senate signed a letter last week urging Obama to conclude an increased 10-year aid package.

“These discussions are continuing and we remain hopeful we can reach agreement on a new MOU that will build on the United States’ historic and enduring commitment to Israel’s security,” a White House official said in response to a Reuters request for confirmation of the latest negotiating terms.

The official declined to comment directly on the terms.

The current MOU allows Israel to spend 26.3 percent of the U.S. funds on its own defense industries. The United States wants to phase this provision out gradually so that all of the money is spent on American military products, the sources said.

Israel wants to keep the provision in place, or only partly reduced, they said. It fears a devastating blow to Israeli arms firms that glean some $800 million a year from the current MOU.

In another move to shore up its own defense industries, the United States wants to end a provision allowing Israel to spend around $400 million in annual MOU funds on military fuels.

One official paraphrased Washington’s message to Israel as: “We want (you) to be spending this money on actual security, on weapons systems, ways to make you safer.”

(Writing by Dan Williams and Matt Spetalnick; Editing by Jeffrey Heller and Philippa Fletcher)