TAIPEI (Taiwan News) — U.S. President Joe Biden on Thursday (Dec. 29) signed into law a US$1.65 trillion spending bill that includes US$2 billion in loans for Taiwan to purchase weapons from the U.S. to strengthen its defenses against China.

A provision for US$10 billion in military aid was axed before it reached his desk.

On Dec. 23, Biden signed into law the US$858 billion (NT$26.4 trillion) National Defense Authorization Act, which authorizes the U.S. State Department to lend Taiwan up to US$2 billion under the "Foreign Military Finance" (FMF) grant and loan assistance program designed to purchase U.S-made weapons and defense equipment.  

Both the Senate and House voted overwhelmingly in approval of the US$10 billion in "Foreign Military Finance grant assistance", which would have been provided in increments of US$2 billion over five years, as well as US$2 billion in loans for military weapons.

However, the US$10 billion aid package was removed during negotiations on the overall government budget for 2023, partly out of concern that funding from other defense programs would need to be cut to make room for the aid package for Taiwan.

On Thursday, Biden signed the US$1.65 trillion Omnibus Consolidated Appropriations Act into law, with only the US$2 billion in loans for Taiwan still intact. The Taiwan aspects of the bill also include funding from the American Institute of Taiwan's (AIT) budget that fosters a fellowship program called the Taiwan Fellowship Act that sends U.S. government employees to live and work for Taiwan in two-year stints.

The bill also requires the U.S. executive branch to establish an "International Military Education and Training" (IMET) program with Taiwan to strengthen the interoperability of combat forces and the ability of joint operations between the two militaries. The bill also retains the Taiwan-friendly provision from the 2022 fiscal year expenditure bill that prohibits the U.S. executive branch from spending money to produce, purchase or display any maps that incorrectly label Taiwan's territory.