Pakistan might lose 50 million dollars (approx Rs 20 crore) in United States aid after an omnibus 2008 spending bill passed by the Congress shaved off the chunk, also imposing conditions on the remaining $250 million (approx Rs 1,000 crore) of military assistance.
The Bush administration had originally requested $300 million (approx Rs 1,200 crore) in military aid to Islamabad, but lawmakers cut 50 million dollars until the time Secretary of State Condoleezza Rice can certify that Pakistan is restoring democratic rights, including an independent judiciary.
A massive appropriations bill including the Pakistan aid package, which was passed by the lawmakers on Monday, has also said that the remaining $250 million set aside could only be used for anti-terrorism and law enforcement purposes.
This effectively means the money could not be used for procuring F-16 jets or Sidewinder missiles, seen as nothing to do with the war on terror but only aimed at India.
Lawmakers on Capitol Hill have been sharply critical of the fashion in which President Pervez Musharraf has been going about, especially in the aftermath of the declaration of emergency on November 3.
Earlier this month, the administration stopped an annual $200 million (approx Rs 800 crore) cash payment to the Pakistani government, instead converting those funds to programmes for Pakistan that will be administered by the US Agency for International Development.
The omnibus spending bill was approved by the House and the Senate and sent to the President for signature.
Since the September 11, 2001 terror attacks, Pakistan has been given about $10 billion (approx Rs 40,000 crore) in economic and military assistance, including reimbursements for the war on terror. In 2004, president George W Bush committed to a $6 billion (approx 24,000 crore), five-year programme to provide aid to Pakistan.
What is being considered as significant is that in making the cut in Pakistani assistance, lawmakers not only withheld a portion of the money sought by the administration, but strictly limited the use of the remaining part to 'counter-terrorism and law enforcement activities directed against Al Qaeda and the Taliban and associated terrorist groups'.
"This is going to be a problem," an unnamed state department official told The Washington Post. "The Pakistanis really want the F-16s. It is very symbolic in their eyes," he added.
Senior state department officials have been urging lawmakers not to cut any assistance to Pakistan and have been arguing that money going to Islamabad for the war on terror is strictly audited.
Congress has appropriated up to $350 (approx Rs 1,400 crore) million in economic aid to Pakistan and up to $5 million for administrative expenses needed by USAID to manage the $200 million in funds that had previously been given as a check to the Pakistani ministry of finance.
"None of the funds appropriated by this act may be made available for cash transfer assistance for Pakistan," the bill said.
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