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US Senators Want Iraq to Spend Oil Revenue on Reconstruction

U.S. lawmakers want Iraq to use bigger oil profits to pay for more of its own reconstruction. VOA Correspondent Scott Stearns reports, Iraq's parliament has approved a supplementary budget that raises this year's spending to more than $70 billion.

The U.S. Government Accountability Office says higher oil prices could earn Iraq up to $79 billion this year. That is twice its average annual oil revenue from 2005 to 2007.

Higher oil earnings could give the government in Baghdad a budget surplus of up to $50 billion - a windfall that has been noticed by senior senators in both U.S. political parties.

Senate Armed Services Committee Chairman Michigan Democrat Carl Levin and the committee's ranking Republican Virginia Senator John Warner say Iraq should use some of that money to repay American taxpayers who have already spent approximately $48 billion stabilizing and rebuilding Iraq.

The GAO report says Iraq's central ministries last year spent just 11 percent of their capital investment budget - less than $900 million.

Since the 2003 invasion, the report says the United States has spent more than $23 billion restoring Iraqi security, oil, electricity and water. From 2005 to April of this year, Iraq's government has spent less than $4 billion on similar services.

Levin says it is inexcusable that U.S. taxpayers are continuing to pay for projects that Iraqis are fully capable of funding themselves.

Warner says it is time for Baghdad to use its revenue and surplus to fully assume responsibility for providing essential services instead of relying on American taxpayers who have been the overwhelming source of reconstruction funds so far.

In March of 2003, then-U.S. Deputy Defense Secretary Paul Wolfowitz estimated rebuilding costs in the tens of billions of dollars and told Congress that Iraq could finance its own reconstruction through oil revenue.

Acting State Department Spokesman Gonzalo Gallegos says it is wrong to conclude from the new GAO report that U.S. taxpayers alone are paying to rebuild Iraq.

"The truth is that we spent a lot of money after liberation to help the country get on its feet, after years of dictatorship," he said. "The large-scale reconstruction-focussed assistance started winding down several years ago as Iraqi revenues and capabilities began to grow. Since last year, we have been focusing our aid not on capital projects but capacity-building, helping to address many of the issues raised in the GAO report."

Parliament's passage of a $21 billion supplementary budget will reduce Iraq's overall surplus, some of which is earning millions of dollars in interest at the Federal Reserve Bank of New York. Iraqi Finance Minister Bayan Jabr says the additional spending is needed for food rations, fuel for power plants, and higher salaries for civil servants.

White House Spokewoman Dana Perino says Prime Minister Nouri al-Maliki's government has made a lot of progress getting money directly to people living under what she calls terrible conditions in Sadr City, Basra, and Mosul. She says the Bush administration is also working with Baghdad to eliminate corruption to make sure they are spending their money responsibly.

The GAO report says obstacles to Iraq spending more of its own money include a shortage of trained budgetary and procurement staff, a weak accounting system, and sectarian violence.