The chairwoman of the House subcommittee responsible for foreign aid said she was stripping from pending legislation $3.9 billion in funding for Afghanistan following revelations that billions of dollars, including large amounts of U.S. aid funds, were flowing out of the country through Kabul's main airport.
Rep. Nita Lowey (D., N.Y.) called the revelations "outrageous," and Capitol Hill aides said she had the backing of Rep. David Obey (D., Wis.), the chairman of the full House Appropriations Committee.
"I do not intend to appropriate one more dime for assistance to Afghanistan until I have confidence that U.S. taxpayer money is not being abused to line the pockets of corrupt Afghan government officials, drug lords, and terrorists," Ms. Lowey said.
At least $3.18 billion in cash has been flown out of Afghanistan since 2007 after being legally declared to customs officers, according to documents reported Monday in The Wall Street Journal.
U.S. State Department spokesman P.J. Crowley said Monday that the Afghan government has gradually improved its ability to monitor the flow of money in and out of the country, and that officials planned to explain to Ms. Lowey's committee the improvements made by both Kabul and the U.S. to better account for aid money.
U.S. officials say they believe at least some of the cash is siphoned from Western aid projects and U.S., European and North Atlantic Treaty Organization contracts to provide security, supplies and reconstruction work for coalition forces in Afghanistan. NATO spent $14 billion in Afghanistan last year.
Profits reaped from the opium trade are also a part of the money flow, as is cash earned by the Taliban from drugs and extortion, officials say. Almost all the money is sent to Dubai, where wealthy Afghans have long parked their lawfully and unlawfully earned money.
Mr. Crowley said while some of the money leaving through the Kabul airport was likely from Afghanistan's illicit drug trade, the State Department believed most was the product of Afghanistan's growing economy and the need to move funds to a country with a better-functioning banking system, such as Dubai.
"I don't think we have any evidence at this point that the money flowing out of Afghanistan is U.S. money," Mr. Crowley said. "We think for the most part it's the result of legitimate commerce."
He added: "No one's saying there's not work to do, no one's saying there isn't some flow of illicit money leaving Afghanistan, but we think Afghanistan has made significant progress over the last several months."
In Kabul, the Afghan government said its top anticorruption watchdog will launch an investigation into the allegations. The Journal's article was discussed at an Afghan cabinet meeting Monday, and Afghanistan's High Office of Oversight and Anti-Corruption plans to open an inquiry into who is carrying the money, where it comes from and why it is being shipped out of the country, said Waheed Omar, a spokesman for President Hamid Karzai.
A U.S. official familiar with the money flows said it was good the Afghan government was finally discussing the matter publicly, but that there was little reason to believe the investigation would yield major revelations, because those believed to be sending out money include relatives of Mr. Karzai, senior officials in his administration and large Afghan companies with ties to the presidential palace.
Ms. Lowey's move, however, has the potential to be more problematic for the Obama administration, which is already facing significant questions about its Afghan strategy—particularly on issues of Afghan government corruption—from Democrats on Capitol Hill.
The House subcommittee is scheduled to debate the funding bill, which includes appropriations for the entire State Department and U.S. diplomatic operations, on Wednesday. Matt Dennis, a spokesman for Ms. Lowey, said the bill introduced for debate will now contain only humanitarian aid, which totals less than $100 million.
Ms. Lowey also said she would hold oversight hearings into the revelations after next week's July 4 recess.
Of the approximately $4 billion the administration requested in Afghan aid, the vast majority, or about $3.3 billion, was in economic aid. The rest of the money that will be stripped from the bill was largely funding for drug interdiction and military exchange programs, Mr. Dennis said.
The Senate subcommittee responsible for foreign aid has yet to schedule a date for its deliberations, and the money could be put back in when the Senate and House bills are reconciled.
But the removal marks the latest in a series of moves on Capitol Hill, including increasingly vocal criticism of the war effort, that have begun to signal weakening political support for the conflict.
Afghan and U.S. officials say the sums legally leaving through Kabul's airport could amount to about $3.65 billion a year, more than a quarter of Afghanistan's $13.5 billion gross domestic product.
The money is being shipped through private money-transfer networks known as "hawalas," which have been used for centuries across the Muslim world as a fast, cheap and legitimate way to transfer funds.
The murkiness of the money's origins prompted U.S. officials to begin investigating the cash flow. A special U.S.-trained Afghan anticorruption unit under the Interior Ministry has also been investigating.
Separately, the Afghan parliament Monday confirmed Gen. Bismullah Khan, the former army chief of staff, as the country's new interior minister overseeing law enforcement and police. The previous minister, Hanif Atmar, was fired this month by President Karzai amid disagreements over the country's security policies.Four other ministers were approved, but two of Mr. Karzai's nominees were rejected. They include the transport minister-designate, Daud Ali Najafi, who oversaw Afghanistan's election commission during last year's flawed presidential election.
Altogether, seven ministerial posts remain vacant. They have been open since parliament rejected most of President Karzai's Cabinet picks in the wake of last year's election.
Also still open is the top job at the country's intelligence agency. Its previous occupant, Amrullah Saleh, was fired at the same time as Mr. Atmar.—Maria Abi-Habib in Kabul
contributed to this article.