EPOCHTV
- Feb 29
- 14 min read

An Impending Disaster for America in the Pacific?–Grant Newsham

In the pending $95 billion security aid bill, most of America has been focusing on U.S. aid to Ukraine, Israel, and Taiwan. But few noticed that key funds for another region were removed—an action that could give communist China control of much of the Pacific.

Watch the clip:

Grant Newsham is an expert on Asia-Pacific, a senior fellow with the Center for Security Policy, and author of “When China Attacks.”

🔴 WATCH the full episode (29 minutes) on Epoch Times: https://ept.ms/S0224GrantNewsham

FULL TRANSCRIPT

Jan Jekielek: Grant Newsham, such a pleasure to have you back on American Thought Leaders.

Grant Newsham: I’m glad to be here, thanks very much.

Mr. Jekielek: Grant, you brought something to my attention recently, which I find very concerning. The U.S. has a relationship with these compact countries, Micronesia, Marshall Islands, and Palau. They govern about 6 million nautical miles of territory that essentially have been under U.S. military control for defense since World War II, and now that may be in jeopardy. Please tell us about this.

Mr. Newsham: It’s not just in jeopardy, this is in extremis, which means that we’re about to lose. These three countries that you mentioned, they are right in the middle of the central Pacific. They occupy a huge amount of terrain, about as big as the continental United States. Take a map of the Pacific, look at Hawaii, and then go west and you will run into the Marshall Islands, the Federated States of Micronesia, and then Palau.

When you’re at Palau, you’re almost to the Philippines. You have this very long corridor, this huge territory where, since World War II, the Americans have had total control and total dominance of the area. These countries have signed treaties with us which say that in exchange for financial aid and some other benefits, these countries will allow the Americans to have sole and exclusive military access to their territory and the right to keep any other foreign military out of the region.

This is a privilege that we’ve had and we seem to have taken it for granted. We think, “It will always be ours because we have a treaty.” We are now in danger of losing this and to the point that either you could have foreign militaries start to come in or that we would not be welcome there. We would not have free access. Try conducting military operations in the Pacific all the way to the Asian mainland without having a secure central Pacific.

One way to look at it is these countries are a high speed corridor that give the U.S. military access to Asia and back, and also access to move north to Japan and south to Australia. If you don’t have control over that, then you will have a very hard time defending anything in the Pacific. You will eventually find yourself defending the United States from Hawaii, and quite possibly, the American west coast.

Mr. Jekielek: These islanders actually serve in the U.S. military, and at significantly higher rates than most states. Traditionally, these are very pro-American people.

Mr. Newsham: They are very much pro-American.

Mr. Jekielek: The thing that always comes up today is that we’re spending huge amounts of money overseas. There was just a new bill sending many tens of billions to support Ukraine. There’s a lot of spending and there’s a lot of questions being asked. What is in jeopardy here and what is the price tag?

Mr. Newsham: The reason why this is in danger is because parts of the treaties that deal with the financial aid America gives these three countries have been up for renewal. The treaties have been signed, but Congress hasn’t passed them, so they’re not going anywhere. The amount of money we’re talking about in terms of finance is about $120 million a year for the next 20 years.

Mr. Jekielek: I just want to remember that you said million.

Mr. Newsham: Million.

Mr. Jekielek: Because generally, when we talk about these foreign aid scenarios, we’re always talking in billions.

Mr. Newsham: You are right. We think that unless it’s a billion, it really isn’t much money. We’re talking millions here, $120 million. The legislation currently is in Congress. The Senate has passed it and now the House will decide on it. It is a $95 billion security assistance bill and about $60 billion goes to Ukraine. The legislation actually had a provision to pay the $120 million a year for the three compact states, which is what they call them.

I’m told that it was mysteriously removed under obscure circumstances at a meeting between Chuck Schumer, Mitch McConnell, Susan Collins of Maine, and Patty Murray of Washington. Before this meeting, the provision to pay for the compact states was in there, but after the meeting it was gone. You can hardly believe how little $120 million is in the context of the U.S. budget.

For example, in Afghanistan, we were paying about $48 billion a year for operations, and this was every year for a good long while, so we ended up spending about a trillion dollars. If you’ve paid $120 million a year for 20 years to the compact states, you will have spent something like $2.3 billion vs. the $48 billion we were spending in a year in Afghanistan.

Mr. Jekielek: Again, we get lost in these numbers, but that’s 48,000 million versus 120 million.

Mr. Newsham: That’s how it is. Keep in mind that Afghanistan was a country of no strategic significance to the United States, none. Now, we’re talking about three countries that occupy the center of the Pacific Ocean and are indispensable to America’s defense position. We can talk about how we defend against the People’s Liberation Army [PLA].

We keep China in check by defending along a line from Japan to Taiwan to the Philippines and down to Malaysia. That’s our so-called first island chain. We always talk about having this great relationship with Japan. Japan is building up its military. We’re doing more with the Philippines, and they’re taking their military seriously. We’re helping the Taiwanese out more than we ever have.

You can do all of this all you want, and you can do it as well as you want, but if you don’t look at what’s happening in your rear area, you’re going to lose. But with the amount of money we’re talking about, it’s just embarrassing that we’re actually arguing about it. When this provision was removed from the legislation, presumably, it was done to save money.

This is a bit like in a hospital. To save some money, they want to reduce their electricity costs, so they start pulling plugs out of the wall. You'll save some electricity, but what if one of the plugs is the one that keeps the life support machines going? You’ve lost a whole lot more than just that little bit you’re going to save.

The people in these countries want us to live up to our promises. They serve in the U.S. military at higher per capita rates than almost any U.S. state. They have this long association with us, and they have a real affection for the United States. Just go there and you will see it immediately. There’s an irritation and almost a bafflement at getting stiffed by the U.S. government. They thought they had a deal and they know the amount of money wasn’t that much.

Mr. Jekielek: The former president of Micronesia, President Panuelo, has been on the show explaining in intricate detail the level of Chinese Communist Party subversion in these states. The Chinese regime has been trying to co-opt these countries and get them on their side.

Of course, a lot of it is just that money talks. That’s how they’ve done a lot of their diplomacy, even though it’s being revealed in many places to be short term. If you’re running out of money, then you’re looking for the next best offer. Some of them want that and the CCP always comes bearing these very attractive gifts.

Mr. Newsham: The senior officials in some of these islands have been overheard saying, “Look, we don’t do this by choice. We do it because we don’t have any alternative.” It’s not just that the Americans are not willing to pay this tiny amount of money. The Chinese are there waiting to slip in, and they’ve been doing this for at least 30 years. The Chinese commercial presence in all of these countries is immense to the point where they dominate the main industry, which is the fishing industry in each of these places.

That commercial presence is not just fisheries, but also the street corner shops. So much of the commercial activity has a Chinese presence, and that leads to political influence. The political influence can be greased with bribery in these places so that you can buy a constituency.

You also have people in each of these islands who think, “China is the best alternative. They promise they’re going to send tourists and fill up the hotels.” In fact, they’ve done it in some cases and then cut it off when they weren’t happy with what these governments did. But nonetheless, this is where the economic bounty is seen to be coming from. There’s not a whole lot of Americans on the ground in any of these places, but you do find a considerable number of Chinese.

Mr. Jekielek: Can our leaders really understand that there are effects from their action or inaction? We are very fixated on the Middle East, Russia, and Ukraine. They deserve attention, that’s true, But we forget about this part of the world and the effect of that can be so massive.

Mr. Newsham: You do wonder if we ever had that ability. It may just be human nature to focus on the immediate thing and not see what the ripple effects are going to be. But here there is enough empirical evidence to tell us what is going to happen. You’ve got 30 years of Chinese activity, and you have the Chinese statements of what they intend to do, which is to push us out of the Pacific.

They are fighting a political war. They haven’t fired a shot, but you can see how they have subverted the populations and shifted them away from the United States. It doesn’t help when this nation’s best friend doesn’t seem to be all that interested.

In fact, the expression benign neglect was actually coined many years ago by somebody who was talking about these three states and the nations in the central Pacific; Palau, Federal States of Micronesian, and the Marshall Islands. They said, “We'll give them a little help, but otherwise, just leave them to the island life.” The Chinese are here offering them something better. Vacuums tend to get filled, and we’ve left a vacuum there.

It’s not as if the People’s Liberation Army is going to show up tomorrow. But if these agreements are not kept in these countries, as I said, there are people whose patience is not unlimited. Every president of these nations has a blank check from China on his desk, and they haven’t cashed them yet. All they have to do is say to the United States, “Yes, we have a treaty, but we don’t think it applies.”

At that point, what do the Americans do? Do they send in the Marines? Do we occupy these places to keep these people who don’t want us there in check? What do you do? It would take so little effort to avoid all of these ripple effects.

Mr. Jekielek: Of course, we wouldn’t do that. It’s an unthinkable option. Grant, bottom line, what needs to happen here ?

Mr. Newsham: What needs to happen is that the White House needs to get involved here. They can’t just say, “It’s Congress’s fault.” The White House didn’t take care of this issue long enough in advance so that it could be worked out. For them now to say, “It’s Congress’s fault and it’s the Republican’s fault,” is just wrong.

What needs to happen is the House in particular needs to restore the provisions in this bill that the House is now going to consider. They need to restore those provisions at full funding, not some part of it, but all $120 million a year. As I said, it’s about $2.3 billion over 20 years. They need to put all of that back in immediately and to have the measures passed and to get us back on track with these three island nations.

The leadership of the House and the Senate needs to realize that they are in the position where if they don’t get this right, they will be considered the people who gave the Pacific to China. To pay for this mistake, a lot of sailors and marines and army and air force people are going to die. It doesn’t take a genius to figure that out. For this tiny amount of money, you can avoid a lot of trouble. If you don’t do this, and if things continue as they are in the Pacific, you’re going to have to fight your way back.

This is the same place we had to fight through to get to Japan in World War II. It’s going to cost lives and it just costs so little. The people there want us and it’s just baffling that we cannot get this done. The leadership of the House and the Senate needs to get this fixed.

All this fixation on Ukraine, Israel, and Taiwan is important, make no mistake. But if you can’t do this bit as well, we’re going to lose in Asia. It doesn’t matter what we do for Ukraine or Israel, if you don’t get these tiny agreements and tiny amounts of money allocated, then we will be in a position in Asia in the Pacific that makes the retreat from Afghanistan look pretty good by comparison.

It’s unfortunate that we have arrived at this point. Once again, the White House has a role in this as well, if they are just arguing over a small amount of money. In all of this federal spending, is there a reason why the administration couldn’t find $120 million a year that they could offset? That’s what is called for.

It’s not just the fault of Congress. The White House also has a role. This has almost been a bipartisan achievement. One thing I would note in all of this, in order to get the relevant part of the legislation where it needs to go, it had to pass through about 12 congressional committees.

Mr. Jekielek: Basically, all the work has been done.

Mr. Newsham: It was incredible work that was done by legislators and their staff. It was astonishing to see how well they did. This was Democrats and Republicans who all understood its importance. At the very last minute, it just pooled out. I know there’s a lot going on Capitol Hill, and maybe someone just didn’t notice that this was really important.

Regardless, it needs to be put back in. But I really give credit where it’s due. There are a lot of people on Capitol Hill who did very good work to get it where it is. In football terms, it was on the one-inch line and they just couldn’t get it over the goal. In fact, the coaches called the wrong play and pushed it back to the six-yard line.

But this really needs to get done, and there is no reason this cannot get done. I’m not inclined to hyperbole, because most things don’t matter as much as people say they do, or they can wait awhile. But this is one thing where the only people who are happy about this state of affairs are the people in Beijing. If I were them, I would be delighted at what’s going on. Now, they can say, “Look, these Americans don’t even like you enough to pay, but we are here. What do you need?”

Mr. Jekielek: This is something that the CCP would be very interested in lobbying against. How could they achieve that?

Mr. Newsham: I have wondered about that because they lobby for everything else. In this case, I don’t know if it’s just short-sightedness and stupidity that’s behind this. I don’t know if there’s a malevolent influence involved here. Often there is.

You can see that with efforts to control technology exports to China or financial investments in China, their lobbyists are all over the place. You saw that phalanx of American lobbyists behind the TikTok CEO when he testified before Congress a few months back. They’ve got their people on his payroll.

But in this case, I don’t understand exactly why they would need to lobby. I understand why they would want to, but it seems as though we’re doing this to ourselves. This is one case where it shouldn’t even be an issue. Exactly what is the argument against funding this? Is it that the U.S. government can’t afford $120 million?

It’s so silly, considering the $48 billion that was given to Afghanistan every year. Even now, we’re paying millions to the Taliban, supposedly for humanitarian assistance. We’ve had our own borders opened up, and apparently in the last two years, about $20 billion has been paid to provide cash cards to the illegal immigrants.

Mr. Jekielek: It is probably more than that. That’s right, migrant support aid is all in the books. That is not an estimate, that’s what they found.

Mr. Newsham: The money is there, so I don’t know what the argument against this would be. Is it to save money to show responsible fiscal stewardship? That would be like standup comedy to try to argue, “We don’t really need the relationship with these three countries in the Pacific, which secure our rare area, which is indispensable to our entire defense position, and to try and replace the defense benefits we get from that secure control of the Pacific.”

A rough estimate that nobody has ever challenged me on is that you would have to start at about $100 billion dollars if we had to actually militarily defend the position that we get from the COFA agreements. It would cost $100 billion, and all that’s being asked is $120 million a year, so I’m perplexed.

Mr. Jekielek: Why do you think war with China under the CCP is inevitable? Because essentially, that’s one of the assumptions in what you’ve been arguing here.

Mr. Newsham: It is inevitable, unless the Chinese Communist Party wakes up one morning and decides it wants to be nice. It is because China wants it. But also, I would point out that the kind of war we’re talking about, if you think of everything that’s happened to date where the Chinese have got a real strong presence in each of these three countries, but also every island country in the Pacific, they have done it without firing a shot.

As I said, it’s political warfare, commercial influence, political influence, bribery, propaganda, and intimidation in some cases. It is pointing out things like, “The Americans aren’t really reliable.” We’re proving that case for them. But they say that this is all being done non-kinetically without shooting, and the shooting part only comes at the last stage if it’s even necessary.

If these countries just tell us, “Look, we don’t think the treaties apply, and we don’t want you here. In fact, we need Chinese police support, and we need Chinese to help us guard our watchers,” we would be in a very difficult position at that point. With their behavior, it’s clear what the Chinese intend to do.

But also they have said what they intend to do, which for starters, is to push us out of the Pacific. It was roughly 15 years ago when a Chinese admiral said to the then commander of Indo-PACOM, Admiral Keating, “You can have east of Hawaii, and we'll take west. How’s that for a deal?”

The Chinese have always telegraphed their punches, so this is where we are today. You have this assertive, aggressive, hyper-nationalistic, totalitarian dictatorship that wants to push us out and dominate us. If that continues and we don’t check it and also counter-attack, we are ultimately going to come to a point where we either fight or submit. It’s unfortunate. I thought history had ended about 30 years ago and we had won. Those people were wrong. But human nature doesn’t change, and we can see what’s coming.

Mr. Jekielek: A final thought as we finish, Grant?

Mr. Newsham: I do want to stress this one thing again because I actually saw it in action and it really changed my impression about Capitol Hill over the last few years dealing with Pacific Island matters. I thought that in general that you would find layabouts and good-for-nothings up on Capitol Hill. But I have been really impressed with the quality of so many of the legislators and staff to get these three treaties where they needed to be. That is something that I’m impressed with, and now they just need to finish it off.

You can look around the world and see that America goes to a lot of places where people either don’t want us, don’t really care, or they’re indifferent. We are just desperate to make friends with them, so we do all sorts of things to try to ingratiate ourselves with them. In the Central Pacific in these islands, these are people who want us to be there.

There are not so many places where you can say that these are people who have had the trust in us, and have allowed us to take care of their national defense. No other countries on Earth have ever done that. These are people who are our friends and we should treat them as such.

I will state this again. If this isn’t done, the people who are responsible can point fingers anywhere they want, but they will be known as the people who handed the Pacific to the Chinese communists. If worse comes to worse, and it probably will, it’s going to be these Americans from flyover countries who will pay the price for it. I hope we really do the responsible thing now. There are a lot of people watching. The Pacific matters as much, if not more than any other place that they’re arguing about up on Capitol Hill.

Mr. Jekielek: Grant Newsham, it’s such a pleasure to have you on the show.

Mr. Newsham: Well, thank you very much for having me, I appreciate it.

Mr. Jekielek: Thank you all for joining Grant Newsham and me on this episode of American Thought Leaders, I’m your host, Jan Jekielek.