Sen. Lindsey Graham, R-S.C., rejected concerns raised by several of his fellow Republicans over a $300 billion reconstruction fund for Iran included in the U.S.-Iran memorandum of understanding, insisting Sunday that no American taxpayer money is being directed toward Tehran under the agreement. “No, I don’t” agree with the criticism, Graham said on CBS News’ “Face the Nation with Margaret Brennan” when asked whether he shared his colleagues’ doubts. “We’re not giving any money to Iran that can change the course of history to try diplomacy.”
The exchange came after host Margaret Brennan played a clip of several Republican lawmakers voicing alarm over the fund, which is outlined in paragraph six of the 14-point Islamabad memorandum signed last week. One senator warned that “if we give billions of dollars to Iran, that money will be used to murder Americans.” Another argued Iran would “use the money that is being released to rebuild their ballistic missile arsenal and begin to enrich again,” calling it “a continuing danger.” A third said the funds would not “go to build new hospitals or daycares” but instead “go to replenish their drone stockpiles, their missiles, to support terrorists like Hezbollah and Hamas.” A fourth pointed to the cost of the war itself, noting that 13 Americans were killed and the U.S. spent between $25 billion and $100 billion in munitions, only to conclude that “we’ve lost a credible threat of attacking them again.”
Graham acknowledged the memorandum’s reconstruction provision was “problematic” but argued the sums involved would not meaningfully alter Iran’s trajectory either way. “The money Iran gets is not going to change the future of Iran,” he said. “And it’s not enough to reconstruct the country.” He framed the choice facing Washington in stark terms: pursue negotiations or default to military coercion. “If you don’t have a diplomatic path, then you have to go to war or some other form of coercion,” Graham said. “Let’s try this. Let’s try a diplomatic solution. I think it’s going to fail.”
Notably, Graham’s position on the fund itself has shifted in recent days. Nine days before Sunday’s interview, he had written on social media that the idea of a Western-funded reconstruction package for Iran was “tone deaf,” comparing it to “a Marshall Plan for Germany with the Nazis still in charge.” Pressed by Brennan on why he had reversed course, Graham said his initial objection was rooted in an assumption about where the money would originate. “Because before I thought the money was coming from the West,” Graham said. “If the West funds Iran, I think that would be a Marshall Plan with the Nazis still in charge for Germany.”
Graham said his recalculation hinges on the fund being financed not by the United States or its Western allies, but by wealthy Sunni Arab states with their own strategic interest in Iran’s transformation. “If the plan envisions the Sunni Arabs — yeah, if the Sunni Arabs do it — can you imagine if Saudi Arabia, Qatar, and the United Arab Emirates invest $300 billion in Iran?” he said. “That would tell me that Iran has changed.” He challenged skeptics of the deal to consider the implications of that scenario. “To all the experts out there, do you think Saudi Arabia, Qatar and the United Arab Emirates are going to invest in Iran with a theocracy bent on destroying Sunni Islam?” Graham said he saw the prospect as more aspirational than likely. “If the money comes from the Sunni Arab world, I hope it happens,” he said. “It would mean that the Sunni Arabs believe that Iran has changed to the point they want to be a business partner. I pray that happens. I doubt if it will.”
Under the text of the memorandum, as disclosed by a senior U.S. official on a conference call with reporters, the United States “undertakes with regional partners to develop a definitive, mutually agreed plan with at least USD 300 billion for the reconstruction and economic development of the Islamic Republic of Iran.” The mechanism for implementing that plan is to be finalized as part of a final agreement within 60 days, and the U.S. has committed to granting “all required licenses, waivers and permissions needed for the relevant financial transactions.”
Graham went on to explain what he believes will happen if the diplomatic track collapses, telling Brennan he had spent four-and-a-half hours with Trump on Friday discussing contingencies. “Here’s what I think will happen next,” Graham said. “If this deal fails, President Trump is going to take the Strait of Hormuz over by force. The United States will control the Strait of Hormuz. We’ll charge a fee for all those who go through to pay for the operation, and we’re going to expand the Abraham Accords in calendar year 2026.” He added that any Iranian resistance to U.S. control of the waterway would be met decisively: “And if Iran contests control of the Strait of Hormuz by the United States, we will obliterate them.”
Graham’s defense of the reconstruction fund places him at odds with a notable bloc of Senate Republicans who have publicly criticized the memorandum since its terms were disclosed. That divide has played out largely through television appearances and statements from lawmakers including Sens. Ted Cruz, Roger Wicker and others who have raised the prospect that Iran could redirect any released or unfrozen funds toward its missile program or proxy militant groups such as Hezbollah and Hamas, rather than toward genuine civilian reconstruction.
Graham’s broader rationale for supporting the diplomatic process, even while expressing skepticism it will succeed, tracks with his public posture throughout the conflict: support for maximum pressure on Iran’s regime paired with eventual openness to negotiation once Tehran has been sufficiently weakened militarily. In May, before the memorandum was finalized, Graham told NBC News he believed “the status quo is hurting us all” and urged Trump to “weaken them further,” arguing that delay only strengthened Iran’s position. He has consistently linked the fate of the reconstruction fund and the broader deal to what happens with the Strait of Hormuz, telling Brennan that gas prices and global oil markets remain hostage to the standoff.
The senator’s comments came the same morning Vice President JD Vance arrived in Switzerland for technical talks with Iranian negotiators, including Foreign Minister Abbas Araghchi and parliament speaker Mohammad-Bagher Ghalibaf, as the 60-day clock established by the memorandum continues to run. Iran’s government has signaled its own skepticism of the process, with Foreign Minister Araghchi saying days earlier that Tehran has “no trust” in American negotiators, while President Masoud Pezeshkian said Sunday that Iran would “never back down” from its claimed right to enrich uranium domestically — a core sticking point that the reconstruction fund and broader sanctions relief are meant to help resolve.
Whether the $300 billion figure becomes a binding component of any eventual final agreement remains unresolved. Under the memorandum’s terms, the implementation mechanism for the fund must be settled within the 60-day negotiating window — the same deadline under which negotiators must also resolve the disposition of Iran’s enriched uranium stockpile, the schedule for lifting U.S. and United Nations sanctions, and the broader question of Iran’s future nuclear enrichment activity.