Referenews

Grants aren’t necessarily needed for Taiwan, said Sen.

Chris Coons

(D., Del.), who leads the appropriations panel overseeing military assistance to foreign countries. Loans make more sense, said the panel’s top Republican, Sen.

Lindsey Graham

of South Carolina: “They’re a fairly prosperous country.”

Some supporters said the grants and other assistance held symbolic value as a robust display of U.S. backing at a time China is increasing military pressure on the democratic island. The $2 billion in loans the spending bill appropriates is more limited than a broader five-year, $10 billion package of grants and other financing for Taiwan that Congress authorized last week in its annual defense-policy bill.

“Yeah, well, it’s a shame,” said Sen.

Bob Menendez

(D., N.J.), who leads the Senate Foreign Relations Committee and backed the broader support measures. “We say we want to meet the China challenge, but then we don’t fund Taiwan in a way that is necessary.”

Some Republican and Democratic lawmakers said funds for grants simply weren’t available given other spending needs and commitments. Still, others criticized the Biden administration for not pressing lawmakers to appropriate the money.

“This is not about the administration getting involved,” an administration official said. “There are real differences in Congress on the way forward, and we want to give Congress the space to sort it out.”

Taiwan’s representative office in Washington said that “the many congressional initiatives demonstrate efforts to support Taiwan and deepen our cooperation.”

The U.S. wants Taiwan, which Beijing claims as its territory, to strengthen its defenses with antiship missiles, sea mines, drones and other weapons, as well as more military training, to thwart a potential invasion. To U.S. defense planners, the urgency for doing so has increased given China’s military buildup and that, unlike Ukraine, Taiwan is an island—so it needs to be armed before the outbreak of hostilities.

When Congress discussed the larger Taiwan assistance package earlier this month,

Ely Ratner,

a senior Defense Department official overseeing China strategy, said the Pentagon wanted lawmakers to authorize it and then come through with funding. He lauded the bipartisan support for Taiwan as an important signal.

“Beijing would love to see nothing more than this issue get politicized and start pulling us apart,” Mr. Ratner, the assistant secretary of defense for Indo-Pacific affairs, said at the American Enterprise Institute in Washington.

The Defense Department didn’t respond to a request for comment.

Sen.

Jim Risch

of Idaho, the top Republican on the Senate Foreign Relations Committee, said that because the grants would be U.S. funds, Washington would have greater say in how Taiwan uses them. He said loans entail bureaucracy and chided the Biden administration for insufficient support.

“The Biden administration simply hasn’t made Taiwan—or funding a Taiwan security-assistance package—a priority,” Mr. Risch said. The White House, he said, “missed a huge opportunity to secure robust security assistance for Taiwan in this funding bill.”

The Biden administration has identified China as the U.S.’s greatest long-term challenge, and support for Taiwan in Congress is sizable. Rep.

Kevin McCarthy

(R., Calif.) has said that he will visit Taiwan should he become House speaker when Republicans take the majority next month. When the current speaker,

Nancy Pelosi

(D., Calif.), visited the island this summer, becoming the highest-ranking U.S. politician to do so in 25 years, Beijing staged multiday live-fire exercises in the waters and skies off Taiwan.

The overall spending bill targets China in other ways, including by tagging at least $325 million for a fund to counter Chinese influence worldwide. Funding is also being appropriated for the Treasury and Commerce departments to consider how to monitor outbound U.S. investment for national-security risks. The measure, congressional aides said, is expected to complement a Biden executive order in the next few months to screen U.S. overseas investment in leading technologies in China.

Differences over Taiwan financing were apparent in September, when the Senate Foreign Relations Committee debated an earlier version of the support measures, then called the Taiwan Policy Act. Sens. Coons and

Chris Van Hollen

(D., Md.), who also sits on the Senate Appropriations Committee, said explicitly including a $2 billion figure for grants in the bill was risky given tight budgets.

“Should we set this authorization and then never deliver, we are at risk of barking louder than our bite,” Mr. Coons said, according to a committee transcript. He said that spending plans are already covering humanitarian relief, support for Ukraine and other needs, and that appropriating $2 billion a year in military grants for Taiwan would make it the second-largest such recipient, after Israel.

Overall, the new spending plan allocates $6 billion in grants for foreign military sales, with $3.3 billion going to Israel, $1.3 billion to Egypt and $425 million to Jordan.

Mr. Coons said at the September meeting that $250 million in grants would be more feasible for Taiwan. Sens. Risch and

Dan Sullivan

(R., Alaska) sponsored an amendment to the spending bill Wednesday to include that amount in grants. That amendment was shelved without a vote in the wrangling over the larger spending bill.

—Gordon Lubold contributed to this article.

Write to Lindsay Wise at lindsay.wise@wsj.com and Charles Hutzler at charles.hutzler@wsj.com