< Back to Iraqi Dinar in the News April 19th, 2008

Pressure mounts on Iraq to pay its share

Iraq reconstruction

Since 2003, Congress has appropriated about $47.5 billion, while the Iraqis have budgeted $50.6 billion. International contributions have totaled $15.8 billion.

The U.S. has allocated most of its money, but Iraq hasn't. In 2006 and 2007, for example, Iraq designated $16.3 billion as its capital budget, which is used to invest in reconstruction projects. But it spent only $2.9 billion.

The Treasury Department estimates that Iraqi oil production this year will generate $35.4 billion, or 84 percent of the country's revenue. Stuart Bowen, special inspector general for Iraq reconstruction, estimates that oil revenue probably will be closer to $60 billion because of sharply higher oil prices. Iraq's 2008 budget of $46.8 billion was calculated based on $57 per barrel oil, roughly half the current market rate.

The Associated Press

WASHINGTON — As Congress gears up to debate President Bush's latest request for $108 billion for military operations in Iraq and Afghanistan, lawmakers in both parties are demanding that Iraq pay a larger share of the costs, especially for reconstruction.

In a letter to Defense Secretary Robert Gates, 10 senators — six Democrats and four Republicans — wrote that Iraq likely would see a "financial windfall" of about $56 billion from record oil prices and that it should be forced to spend that money.

"The time has come to end this blank-check policy and require the Iraqis to invest in their own future," the senators wrote.

The rising clamor, particularly among Republican lawmakers who face tough re-election challenges, and new polls showing Americans more dissatisfied than ever with the war are ratcheting up the pressure on the Bush administration ahead of what is likely to be a pitched battle over the war-spending bill.

Congressional Democrats have said they will not simply grant Bush's request but again will seek to attach strings, including a requirement that Iraq pay a higher share of the costs. Democrats also plan to add up to $30 billion in domestic spending that they say is needed to help the economy.

Some Democrats also are trying to approve an additional $70 billion to sustain military operations through the end of Bush's term, a move that would draw greater attention to the high cost of the Iraq war.

Bush's request would finance the Iraq and Afghanistan operations through Sept. 30.

In a new line of attack against the administration, Senate Majority Leader Harry Reid has begun stressing that the cost of the Iraq war is roughly $5,000 per second.

"The president has not been honest about the cost of the war from the beginning," Reid said this week. "$5,000 a second, $434 million every day. Seven days a week, no weekends off, no vacations. $12 billion every month."

The administration continues to dismiss criticism of its spending.

"Fighting terrorism and taking care of our veterans is not inexpensive," the budget director, Jim Nussle, wrote in a letter this week. "We acknowledge that. However the economy also benefits when terrorist attacks are prevented and we doubt any critics of the level of spending take that into account."

At a news conference Thursday, three of the 10 senators who wrote to Gates — Evan Bayh, D-Ind.; Susan Collins, R-Maine; and Ben Nelson, D-Neb. — said they would press the administration to force Iraq to spend more of its budget surplus on reimbursing U.S. expenses.

Legislation being drafted by the three would accomplish that by restricting future reconstruction dollars to loans instead of grants. The bill also would require that Iraq pay for the fuel used by American troops and take over U.S. payments to predominantly Sunni fighters in the Awakening movement.

Sen. Charles Schumer, D-N.Y., is considering pushing the debate into yet another arena next week, an aide said, perhaps by asking the State Department to determine if Iraq is using U.S. tax dollars to hire lawyers and lobbyists to influence Congress and the administration.

Schumer does not know if that is the case, the aide said, speaking on condition of anonymity because the senator had not completed his plans. But he said Schumer thought it was inappropriate for Iraq to try to influence policy while U.S. soldiers were in Iraq.

Bush has suggested that Congress is preaching to the choir. He noted last week that Iraq's latest budget would outspend the United States by more than 10 to 1 on Iraq reconstruction, with American funding for large-scale projects "approaching zero."

Other administration and military officials say the lack of spending isn't sinister.

"Part of it's a lack of expertise. Part of it is a lack of trained people. And part of it, in the past, has probably been politics," Gates told Congress last week. "We think they're making headway on all of those."

Sen. Carl Levin, D-Mich., said he doesn't buy it, including Bush's declaration that the United States no longer is in the business of major reconstruction. Congress received notice April 3 that the Pentagon planned to transfer $590 million in its war budget to cover construction and infrastructure improvements for Iraq security forces.

"I just think it's totally unacceptable that we say they don't know how to cut a check," Levin said.

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