After delays, US Senate passes funds for Pacific island nations

The US Senate has approved economic assistance for three Pacific island nations seen as pivotal to resisting China’s influence in the contested region.

The funding for the Marshall Islands, Micronesia and Palau under the Compacts of Free Association was approved as part of a US$460 billion ($694 billion) appropriations package passed by the US Senate hours before a midnight on Friday (Washington time), averting a federal government shutdown.

Palau in Micronesia.Credit: iStock

All the island nations are considered critical as tensions grow between Washington and Beijing.

The funding package now goes to US President Joe Biden to sign before a looming Saturday partial government shutdown.

The Compacts of Free Association agreements guarantee the US exclusive military access to their territories and surrounding waters. In return for those military rights, the US provides the island nations with $US7 billion ($10.7 billion) in financial assistance over 20 years.

The US has had a military base on the Marshall Islands since World War II, and it’s where the Ronald Reagan ballistic missile defence test site is located.

A new radar system for the US Air Force is being built on Palau.

The measure sets spending levels through September for about a quarter of federal agency funding, with the remaining parts of the government facing a March 23 deadline.

Ideological fights over government spending have dragged on since the October 1 start of the federal fiscal year, delaying funding decisions and generating five threatened shutdowns, each of which has been averted shortly before the deadline. Financial markets have shrugged off the drama, assuming compromise would eventually prevail.

The US Senate voted 75 to 22 to approve the package, negotiated by congressional leaders from both the Democratic and Republican parties. The US House of Representatives overwhelmingly passed it earlier this week.

“To folks who worry that divided government means nothing ever gets done, this bipartisan package says otherwise,” Senate Majority Leader Chuck Schumer said.

“It helps parents and veterans and firefighters and farmers and school cafeterias and more.”

Included in the bill are funds for the US departments of Agriculture, Interior, Commerce, Justice, Transportation, Housing and Urban Development, Energy, Veterans Affairs as well as the Environmental Protection Agency, Food and Drug Administration and NASA.

Republicans won a small cut to domestic funding outside of veterans health care, but far less than the 22 per cent they had hoped for.

Democrats beat back demands for hundreds of conservative policy changes, ranging from banning abortion drugs to cutting off funds for investigations into former president Donald Trump.

Republicans were able to make it easier for veterans deemed mentally incompetent to buy guns, a provision that provoked some Democrats to vote against the measure.

with Bloomberg

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