EXCLUSIVE: Pentagon axes Peshmerga pay in Iraq anti-ISIS aid shift

Shafaq News

2 days ago

Shafaq News – Washington
Washington is preparing its largest cut in military funding to Iraq since launching its anti-ISIS support program in 2014, according to exclusive Pentagon documents obtained by Shafaq News.
The Counter-ISIS Train and Equip Fund (CTEF) budget for 2026 shows Iraq's overall allocation reduced by nearly half and the complete termination of the Peshmerga salary program, shifting the full cost of funding the Kurdish force to the Iraqi government—despite the unresolved salary dispute between Baghdad and Erbil.
The move coincides with plans to end the US-led Coalition's mission in Iraq, reflecting a shift toward a 'capable partner' model based on advanced equipment and intelligence support rather than sustained financial aid. In Baghdad and Erbil, where political and fiscal disputes remain, the decision fuels concerns over a potential security gap at a highly sensitive regional moment.
2014 Program Origins
A senior Pentagon official told Shafaq News that direct US assistance to the Peshmerga and Iraqi forces began in the summer of 2014, when ISIS overran large parts of northern Iraq and advanced toward the Kurdistan Region's borders. On August 5 that year, Washington delivered urgent ammunition shipments to the Peshmerga, followed three days later by US airstrikes, making the force the first line of defense against the group.
With the creation of CTEF, support for the Peshmerga and Iraqi forces was consolidated under a single framework to enable local partners to conduct operations against ISIS, covering training, equipment, and logistics. In the years that followed, the program expanded to include the Iraqi Army, Counter-Terrorism Service (CTS), and Interior Ministry units, with fixed allocations for Peshmerga salaries.
The 2026 budget justification confirms that this will be the final year for salary payments under a memorandum of understanding signed in September 2022 between the Pentagon and the Kurdistan Regional Government (KRG), transferring full responsibility to Baghdad starting in 2026. Funding data shows the salary line at $135 million in 2024, falling to $60 million in 2025, and to zero in 2026. The document stresses that all units receiving support are subject to strict vetting, including the Leahy Law, to prevent funding to any force implicated in rights abuses or linked to designated terrorist groups or the Iranian government.
What Iraq Will Receive
Despite the cut, the budget preserves core procurement aimed at strengthening operational independence, including for the Ministry of Defense:
-$1.5 million oxygen generation system for AC-208 aircraft to improve altitude safety and reconnaissance missions.
-$3 million air-to-ground communication system for F-16s to enable command and control without Coalition reliance.
-100 Hellfire missiles worth $12 million to support precision strikes.
-$10 million in communications equipment.
-$21.919 million in ISR assets for Common Interest Area Brigades.
The CTS receives $65.6 million for training and equipment, including a $12.6 million ISR drone system and $20 million in communications upgrades, along with $17.24 million for logistics and $20.25 million for sustainment.
Peshmerga: More Equipment, Pay Shift to Baghdad
Support for the Ministry of Peshmerga Affairs will rise to $61 million in 2026, up from $4.9 million in 2024 and $57.8 million in 2025, covering four main packages:
-Ammunition: 17,000 mortar/rocket rounds ($5.3 million+).
-Weapons: 10,000 light arms, mortar/rocket launchers, scopes, and accessories ($11.08 million).
-Vehicles: 250 service vehicles, 52 armored vehicles, water trucks, and rescue vehicles ($27.5 million).
-Individual and logistical gear: 11,295 body armors, 49,589 uniforms, 13,000 protective kits, and 12 generators ($17.1 million).
The document outlines a restructuring through 2026 into six operational commands, regional guard brigades, training centers, a staff college, and logistics and technical support commands.
These steps are in line with the September 21, 2022 memorandum between the Pentagon and the Ministry of Peshmerga Affairs, which ties continued support to reforms aimed at unifying the forces under the ministry and eliminating partisan duplication.
Syria and Lebanon: Adjusted Funding, New Entry
In Syria, $130 million is allocated to sustain partner pressure on ISIS cells and maintain secure and 'humane' detention of its fighters, down slightly from $147.9 million in 2025.
For the first time, Lebanon appears in the budget with $15 million to strengthen Lebanese Army capabilities—particularly special units—and prevent exploitation of the Syria-Lebanon border.
Beyond The Numbers
The financial shift aligns with the September 2024 US-Iraq agreement to end the Coalition's mission in Iraq by September 2025 and move to bilateral security partnerships, while maintaining the Syria mission. Shafaq News has learned that the Coalition has already begun evacuating Iraqi sites under the agreed timetable. Current US deployments are estimated at 2,500 troops in Iraq and 900 in Syria.
Pentagon budget documents project US troop levels under Central Command to average 43,460 in 2024, rise to 49,998 in 2025, and drop to 45,729 in 2026—reflecting a planned drawdown as local partners assume greater responsibility.
According to the Pentagon official, the decision reflects the 'work accomplished' in building infrastructure and capabilities, as the Combined Joint Task Force – Operation Inherent Resolve transitions from direct combat.
However, reports by US inspectors general warn that ISIS remains capable of reorganizing in rural pockets and urban outskirts, and that reduced resources or logistical access could expand its operational space.