A New York Times article this morning highlighted the fact that Pakistan's nuclear arsenal appears to be increasing, in spite of the fact that the Taliban insurgency occupies much of Pakistani territory. This fits in well with a developing narrative about how Pakistan's focus on India is the problem: The story goes that the Pakistani military still considers India its central threat and isn't overly concerned with the Taliban. There are also long-term concerns about growing Pakistani capability and especially of the dangers of some of that capability falling into Taliban hands.
With that in mind, I'm not sure that these reports are as alarming as they seem on face. Pakistan has long sought a more capable nuclear arsenal. This build-up is part of Pakistan's long-term national security strategy, rather than a response to the availability of U.S. dollars. The logic of the strategy itself can certainly be criticized, but that is an altogether different debate. Were the United States not allocating substantial aid to help the Pakistani military fight the Taliban, it's unlikely that any money would be drawn from the nuclear program. Rather, the Pakistani Army would simply be less capable at counterinsurgency. The nuclear program has occupied the highest point of prestige and importance in Pakistani defense circles since 1971, and it is unlikely that the growing strength of the Taliban -- or complaints from the United States -- can change that. If there were any direct evidence that U.S. aid was funding an increase in Pakistani nuclear capabilities above and beyond what Pakistan had already planned, I'd be more concerned, but this doesn't appear to be the case thus far.
That said, the Pakistani nuclear buildup is a bad thing in and of itself, both for proliferation in general and for relations with India in particular. It's just not in any direct conflict with the fight against the Taliban.
--Robert Farley