The terms of the memorandum of understanding (MoU) to end the US-Israel war with Iran have become the latest political flashpoint in Washington, with President Donald Trump defending his pledge to develop a $300 billion recovery plan for Iran.
Mr. Trump and Vice President J.D. Vance sought to reassure Thursday that the effort will not be funded by U.S. taxpayers. Still, several Democrats and a handful of Republicans picked up the planned fund at a time when affordability and economic populism are dominating electoral politics in this country.
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The memorandum, signed by President Trump and Iranian President Masoud Pezeshkian on Wednesday, says only that the United States will “work with regional partners to develop a final, mutually agreed-upon plan of at least $300 billion for the reconstruction and economic development of the Islamic Republic of Iran.”
An “implementation mechanism” was to be determined over a 60-day negotiation period, with the United States committed to granting the necessary permits, sanctions waivers, and other authorizations.
Terms have not yet been determined, but President Trump ruled out direct U.S. funding for the project in a post on Truth Social on Thursday.
“The $300 billion payment to Iran by the US does not exist, it is fake news!” he wrote.
He called the issue “propaganda” by the Democratic Party.
Meanwhile, Vance said in an interview with The New York Times published Thursday that the plan would not be “paid for by American taxpayers.”
“Not a penny of American money is going to Iran,” he said.
At a subsequent press conference, Mr. Vance suggested that such a fund could be paid for by Arab states in the region or by countries outside the region interested in investing in Iran, creating economic integration that would help ensure lasting peace.
No country has yet confirmed funding for the plan.
Vance added that Iran could access these resources “only if it fully complies and changes its behavior.”
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Several Democratic leaders have sought in recent days to link the $300 billion fund to domestic social and economic issues, a message likely to intensify in the run-up to November’s midterm elections.
“With $300 billion, we could end homelessness, fund cancer research for 40 years, and give every child seven years of free preschool. Instead, Trump is sending money to Iran,” Sen. Amy Klobuchar said in a post on X earlier this week.
“Democrats will not cooperate with President Trump’s efforts to send $300 billion to Iran,” said Sen. Chuck Schumer, the top Democrat in the chamber.
“Republicans will not be able to find the money to help Americans maintain their health care,” Rep. Jason Crow wrote in Thursday’s X. “But they will find the money to get $300 billion to Iran.”
A few Republicans, including Iran hardliners and Trump ally Sen. Roger Wicker, have also joined in the criticism of the plan.
Wicker said in a statement Thursday that even if not funded by U.S. taxpayers, the $300 billion would make “Iran’s rewards under President (Barack) Obama’s 2015 deal pale in comparison.”
He referred to the 2015 Joint Comprehensive Plan of Action (JCPOA), in which the U.S. government released about $55 billion in frozen Iranian assets as part of an agreement under which Iran would reduce its nuclear program and submit to regular inspections in exchange for sanctions relief. Most of the assets were held in foreign banks.
President Trump unilaterally withdrew from the deal in 2018 and has repeatedly insisted that any future deal with Iran would go far beyond the terms of the JCPOA. The memorandum signed Thursday does not address the future of Iran’s nuclear program. Instead, it will begin 60 days of negotiations to address the issue.
In addition to the recovery fund, the new US-Iran memorandum also promises immediate lifting of sanctions on Iran’s fossil fuel industry. It will also unfreeze billions of dollars in Iranian assets and begin negotiations to lift sanctions.
U.S. Rep. Thomas Massie, a regular Trump critic who lost re-election due to intrusion by Trump and pro-Israel groups, also took aim at the planned recovery fund.
“$300 billion is five times what Congress spends on roads and bridges annually,” he wrote in a post to X.
“I’m tired of winning,” he said, referring to one of President Trump’s catchphrases.
