U.S. Officials Defend Iraq's Oil Surplus

Could Have Oil-Fed Budget Surplus Of $79 Billion, But They're Still Rebuilding With U.S. Dollars

(CBS/AP)  Iraq is paying for more of its own reconstruction but is still struggling to spend its multibillion-dollar surplus as it copes with a flood of oil revenue and a cumbersome approval process meant to curb corruption, U.S. officials said Wednesday.

Iraq could finish the year with as much as a $79 billion cumulative budget surplus as oil revenues add to leftover income the Iraqis still haven't spent on national rebuilding, according to a report by the Government Accountability Office made public Tuesday.

Despite many American critics wondering why the U.S. is still spending so much on Iraq's reconstruction, U.S. officials who work with the Iraqis on reconstruction defended Baghdad's financial contributions.

The officials said the Baghdad government has been increasing its capital spending by 30 percent to 35 percent each year since 2006 - although they added that both governments want to see the pace increased.
The Iraqi government is drafting plans for Iraqi-funded projects to include 1,000 new primary health care centers over the next 10 years, new airports and a major renovation project for downtown Baghdad, the American officials said.

They spoke on condition of anonymity because they did not want to comment on Iraqi government performance.

The officials said the United States has not begun any new reconstruction projects in Iraq since 2004 and that ongoing work is funded by money approved by Congress four years ago.

But many Iraqis - who lack adequate electricity, clean water and jobs - find it unfathomable their country is awash in oil dollars. Last year, it spent less than a third of the $12 billion budgeted for major projects such as electricity, housing and water.

Beyond the more than 4,000 American lives lost, the Iraq war has drained U.S. taxpayers of about $600 billion since 2003 - for everything from tanks and guns to armor to protect troops from roadside bombs, reports CBS News correspondent Chip Reid.
In Washington, senators renewed calls for Baghdad to pay more for its own reconstruction.

"We're being taken for fools by the Iraqi government that continues to take in American money to pay for their reconstruction," Sen. Carl Levin, D-Michigan, told CBS News.

Levin, who requested the report said one particularly egregious example of U.S. spending is $33 million for a planned hotel and retail complex at the Baghdad airport, reports Reid.

"Their excuse is they don't have a bureaucracy that's capable of writing checks," Levin told CBS News. "That's about as feeble an excuse, it would be laughable if it weren't so serious."

In the report, the GAO said Iraq had an estimated budget surplus of about $29 billion from 2005 to 2007 and could have an additional surplus of up to $50 billion this year.

More than 90 percent of that money comes from Iraq's booming oil business, reports Reid. The high price of oil, that causes so much pain in the U.S., is filling the coffers in Iraq.

From 2005 to 2007, Iraq brought in $90 billion in oil revenues, according the GAO report, but spent only around $6.7 billion on reconstruction.

While Iraq stockpiles money, U.S. taxpayers continue to bear the burden of rebuilding. So far, they've devoted about $48 billion dollars to the cause.

Nearly $10 billion of the estimated surplus is held by the Development Fund for Iraq at the Federal Reserve Bank of New York, according to the report. That fund was established by U.S.-led coalition authorities shortly after the 2003 overthrow of Saddam Hussein to hold Iraqi oil revenues and other state assets.

Every month, the government-owned State Oil Marketing Organization offers to sell Iraqi oil at an announced price. Oil companies interested in buying then request shipments. Preference is given to major international companies and those that have previously done business with Iraq.

Revenues are then deposited in the Development Fund account, which the Iraqi government has controlled since 2004. The Central Bank of Iraq is free to draw from the account, but the government decides how to spend the money. Other revenues are held by the Central Bank and Iraqi commercial banks.

The expected surplus is likely to be lower than $79 billion because parliament Wednesday approved legislation for a $21 billion supplemental budget for 2008.

Nevertheless, the GAO report faulted the government for holding back on spending plans.

"First ... (the) relative shortage of trained budgetary, procurement and other staff with the necessary technical skills is a factor limiting the Iraqi government's ability to plan and execute its capital spending," the GAO said, adding that a second problem is the government's weak accounting systems.

"Third ... violence and sectarian strife remain major obstacles to developing Iraqi government capacity," it said.

The report also estimated that this year Iraq could generate $67 billion to $79 billion in oil sales. Other U.S. officials previously had said they expected the oil windfall to be about $70 billion.

"This substantial increase in revenues offers the Iraqi government the potential to better finance its own security and economic needs," the GAO said.

But the U.S. officials said the influx of oil money had been difficult to manage, not only for Iraq but for other oil-producing countries.

Other problems cited by the officials included a cumbersome approval process - put in place to curb corruption - lack of expertise in the ministries and a shortage of Iraqi contractors capable of taking on major development projects.

Since 2005, the United States has funded a number of efforts to teach civilian and security ministries how to effectively execute their budgets.

The efforts included programs to advise and help Iraqi government employees develop the skills to plan programs and to effectively deliver government services such as electricity, water and security.

[sistatee-2009]

Iraq has a $80 billion surplus, and we are $9 trillion in debt, AND WE''RE GIVING THEM MONEY! Even the French didn''t take it in the _ss THAT bad before their revolution!

[smurfcrusher]

They don''t defend the surplus - they try to. And fail.

[noloyalisti]

What does that pay for a few months of the ongoing American war OF terror?

[marshall65]

Just shows how stupid and irresponsible the Bush Cheney management team is. McCain would continue with more of the same stupidity and probably make it worse by attacking Iran which probably would result in backlash from Russia and China. Hey, what the heck. The Army can handle it, right?

[jmurrieta1]

Not to worry, a lot of that money will end up right back in the Swiss bank accounts of Cheney''s cronies.

[mcoilcorp]

THE OIL WARS HAVE STARTED!!

[mcoilcorp]

GIVE MORE MONEY TO THE OIL COMPANIES

[fiberglass3]

"More than 90 percent of that money comes from Iraq''s booming oil business, reports Reid. The high price of oil, that causes so much pain in the U.S., is filling the coffers in Iraq."

[mcoilcorp]

I GOT A GREAT IDEA LETS GIVE THE OIL COMPANIES MORE TAX BREAKS!!

[lloydsmith3]

We broke''em. so we owe ''em. Their oil money is theirs. Our invasion and occupation wasn''t their fault. It''s our responsibility to fix the infrastructue we boke, not their''s. Sad, maybe, but it''s our bad.

[nothappyatall]

"U.S. Officials Defend Iraq''s Huge Surplus"

Oh of COURSE they do, they all have their hands in the money pot there one way or the other.
So we''ll just keep pouring *OUR* money into this krap-hole while THEY build up a nice bankroll of cash.

[deacon20081]

Surplus there George? The War was supposed to PAY FOR IT SELF REMEMBER? No more TAX DOLLARS for IRAQ!
Impeachment and War Tribunal Trials are the next step. Hope you and your DRUNK FRIENDS on Wall Street had fun...pay back is a bzitch

[txgrouch2006]

The new government in Iraq should PAY US BACK for helping install them. If they have so much extra money, why are we spending ours there???

[tawpdawg111]

we should all be feeling really used

[txgrouch2006]

On top of all this, I hear Iraq is ALREADY PAYING other countries like Russia and Britain.

WHY NOT US???

[kazoodan]

My guess is that Bush and Cheney won''t push it. If Iraq started using their own money then they could hire whoever they want. Then it would be bye-bye to Haliburton, KBR, Blackwater and all that U.S. money that would eventually end up in Cheneys'' pocket.

[stevex47]

Does anybody else see the irony here?

boosh & co. ruin america''s economy, dollar, jobs, homes sales and prices.....ha, and Iraq runs a SURPLUS.

There won''t be anything left of us after the Iran invasion boosh is setting McSame up for.

New world order is correct. Iraq, china and iran and boosh''s buddies the saudi''s will own the world.

Thanks booosh. Mission Accomplished.

[stevex47]

We got taken, lock, stock and barrel. Death, the shirts off american''s backs...their homes.

FOR THIS ?

Just a coincidence the boosh family has made a fortune in oil for many, many years?

Their plan succeded.

Unadulterated thievery of America by boosh and his oil buddies. Nice regime.

[txlakeside]

IMPEACH BUSH AND CHENEY for this entire mess!

Put them in jail for war crimes and no bid contracts that made their buddies rich! Then vote the remaining greedy, corrupt, cooked self serving repubs from office! Lets wipe both houses this Nov and send a clear message that the status quo and more of the same is not going to happen any more! Then we need to limit Congressional terms to 8 years just like the President. Lifetime politicians are lifetime crooks!

[cbsblogger]

Why aren''t Bush and Cheney impeached for this fiasco of mismanagement? If they aren''t impeached Pelosi and Hoyer need removed from office as collaborators.

[txgrouch2006]

Then we need to limit Congressional terms to 8 years just like the President. Lifetime politicians are lifetime crooks!
Posted by txlakeside at 09:59 PM : Aug 06, 2008

Well, I agree with THAT part.

Congress has a lower approval rating than Bush. Too many career crooks have gotten too entrenched.

[txgrouch2006]

%u201CIn 1998, the United States also changed its underlying policy toward Iraq from containment to regime change and began to examine options to effect such a change, including support for Iraqi opposition leaders within the country and abroad.
%u201CIn the four years since the inspectors left, intelligence reports show that Saddam Hussein has worked to rebuild his chemical and biological weapons stock, his missile delivery capability, and his nuclear program. He has also given aid, comfort, and sanctuary to terrorists, including Al Qaeda members, though there is apparently no evidence of his involvement in the terrible events of September 11, 2001.
%u201CIt is clear, however, that if left unchecked, Saddam Hussein will continue to increase his capacity to wage biological and chemical warfare, and will keep trying to develop nuclear weapons. Should he succeed in that endeavor, he could alter the political and security landscape of the Middle East, which as we know all too well affects American security.
%u201CNow this much is undisputed%u2026%u201D

Hillary Clinton%u2019s Senate floor speech
October 10, 2002

http://clinton.senate.gov/speeches/iraq_101002.html

It was GREAT when it all began,
I was a regulah Willy fan.
But it ended when he had a plan,
To send the army over to IRAQ!!!

HANG HIM!! HANG HIM HIGH!!! HANG BILL CLINTON!!!!

[cbsfan73]

Six hundred billion dollars and neither the Iraqis or the Americans (except the wealthy) are any better off.

The American taxpayer - the greatest fool of them all!

[txgrouch2006]

"Other countries possess weapons of mass destruction and ballistic missiles. With Saddam, there is one big difference: He has used them. Not once, but repeatedly. Unleashing chemical weapons against Iranian troops during a decade-long war. Not only against soldiers, but against civilians, firing Scud missiles at the citizens of Israel, Saudi Arabia, Bahrain and Iran. And not only against a foreign enemy, but even against his own people, gassing Kurdish civilians in Northern Iraq.

%u201DThe international community had little doubt then, and I have no doubt today, that left unchecked, Saddam Hussein will use these terrible weapons again. "

Speech from the Oval Office by President William Clinton, explaining his attack on Iraq
reported by The Associated Press
Wednesday, December 16, 1998

http://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/clintontext121698.htm

BTW, Bill Clinton was impeached on December 19, 1998.

WHAT A COINCIDENCE!!!

It''s beyond me, Help me, Mommy!
I''ll be good, you''ll see!
Wash my tears away-ay-ay-ay-ay!
What''s this? Let''s see.
I feel LIKE WE''VE BEEN HAD BY SLICK WILLY ALL OVER AGAIN!!!

[txgrouch2006]

IMPEACH BUSH AND CHENEY for this entire mess!
Posted by txlakeside at 09:59 PM : Aug 06, 2008
----------------

We''ve already impeached Clinton. Why not make it a clean sweep?

[cbsfan73]

From: http://luminaria.wordpress.com/

One month after the invasion of Iraq, the United States began airlifting plane loads of cash to Baghdad%u2026literally. Stacks of $100 dollar bills were packed into bricks, assembled into large palettes and loaded onto cargo planes bound for the Iraqi capital. Beginning in April 2003 and continuing for little more than a year, a total of $12 billion dollars of US currency was shipped from the Federal Reserve to Iraq. The US military delivered the banknotes to the Coalition Provisional Authority where it was to be dispensed for Iraqi reconstruction. What happened to it? To date, at least $9 billion dollars cannot be accounted for.

[nearl4511]

I am glad theire economy is working. The more secure theri economy, the faster we can get the he*LL outta there. The more employment; the less impetus for unrest and revolt. Jay Garner was RIGHT.

Afghanistan should have such a profitable budget problem.

[txgrouch2006]

Afghanistan should have such a profitable budget problem.
Posted by Nearl4511 at 10:23 PM : Aug 06, 2008

They do. 90% of the world''s opium comes from there.

AND THEY HAVEN''T PAID US A DIME.

[txgrouch2006]

To date, at least $9 billion dollars cannot be accounted for.
Posted by cbsfan73 at 10:21 PM : Aug 06, 2008

With a $79 BILLION surplus, Iraq could easily reimburse us.

BUT THEY HAVEN''T PAID US A DIME.

[nearl4511]

BS. Afghanistan govt does not cash in on the economy; warlords do because it is not legalized and TAXED.

We pay the Afghan govt to suppress opium. The terrorists gain from this economy; not the Govt.

[txgrouch2006]

WE ARE THE PEOPLE OF THE UNITED STATES OF AMERICA.

AND WE DEMAND REPARATIONS!

[txgrouch2006]

Afghanistan govt does not cash in on the economy; warlords do because it is not legalized and TAXED.

We pay the Afghan govt to suppress opium.
Posted by Nearl4511 at 10:37 PM : Aug 06, 2008

Great, we are spending EVEN MORE MONEY while the local warlords get wealthy anyway.

Do we HAVE to be on the losing end of EVERY deal???

[nearl4511]

Collect your reparations from Al quaeda.

Iraq war was unprovoked. Afghanistan Govt has no money...we pay them to NOT grow Opium.

[cbsfan73]

The US Military no longer tries to eliminate opium in Afghanistan as this has proved ineffective in getting the locals to side with them against the terrorists.

They now turn a blind eye and let farmers grow poppies freely.

[txgrouch2006]

Iraq war was unprovoked.
Posted by Nearl4511 at 10:42 PM : Aug 06, 2008

Tell it to THIS GUY:

"Other countries possess weapons of mass destruction and ballistic missiles. With Saddam, there is one big difference: He has used them. Not once, but repeatedly. Unleashing chemical weapons against Iranian troops during a decade-long war. Not only against soldiers, but against civilians, firing Scud missiles at the citizens of Israel, Saudi Arabia, Bahrain and Iran. And not only against a foreign enemy, but even against his own people, gassing Kurdish civilians in Northern Iraq.

%u201DThe international community had little doubt then, and I have no doubt today, that left unchecked, Saddam Hussein will use these terrible weapons again. "

Speech from the Oval Office by President William Clinton, explaining his attack on Iraq
reported by The Associated Press
Wednesday, December 16, 1998

http://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/clintontext121698.htm

BTW, Bill Clinton was impeached on December 19, 1998.

WHAT A COINCIDENCE!!!

[txgrouch2006]

The US Military no longer tries to eliminate opium in Afghanistan as this has proved ineffective in getting the locals to side with them against the terrorists.
They now turn a blind eye and let farmers grow poppies freely.
Posted by cbsfan73 at 10:44 PM : Aug 06, 2008

All that money flowing right under our noses, and we can''t get our hands on ONE DIME of it. In fact, we''re wasting money on a futile effort to stop it.

MAYBE THE NEXT PRESIDENT CAN WORK ON THAT. The one we''ve got now is a dunce.

[nearl4511]

They should be encouraging the Govt to cash in on the opium growth - TAX it!

Force the underworld out of the market.

[cbsfan73]

Nearl4511 wrote:
They should be encouraging the Govt to cash in on the opium growth - TAX it!

Good idea except one thing: How do you tax something you can''t see? It would be like trying to tax drugs in America...

[vincan-2009]

We should be used to bezar moves by this whitehouse. Our country is bankrupt and got that way because of irresponsible policies of this republican regime. Now they say we can''t possibly be repaid for all the money that Bush and Cheney have thrown up in the air in Iraq. This does not sit well with the average American. We are the ones who were forced to send our husbands, sons, daughters, wives to Iraq for a war that was uncalled for. We are the ones suffering because of the devalued dollar and high prices for food, gas, and everything else.

[cbsfan73]

"Iraq is paying for more of its own reconstruction but is still struggling to spend its multibillion-dollar surplus as it copes with a flood of oil revenue and a cumbersome approval process meant to curb corruption, U.S. officials said Wednesday."

Uh yeah, like the cargo planes full of cash were not meant for corruption. What else could they possible need with US currency? Incredible gall!

[cbsfan73]

Vincan wrote:
"We are the ones who were forced to send our husbands, sons, daughters, wives to Iraq for a war that was uncalled for."

Uh, it is a voluntary military. If someone feels that the military is being used illegally by those in power, don''t join.

[cbsfan73]

Vincan wrote:
"Our country is bankrupt and got that way because of irresponsible policies of this republican regime."

Actually it is only the poor and middle class that are going bankrupt. The rich are increasing their wealth exponentially with crisis.

There are two year waiting lists on yachts over 100 million dollars. Big ticket luxury items are selling like crazy now.

[barbaraf4]

"U.S. Officials Defend Iraq''s Huge Surplus
Iraq Could Wind Up With Oil-Fed Budget Surplus Of $79 Billion"
~~~~~~~~~~~~
Iraq has no surplus. If I remember correctly, Bush assured us that the war would pay for itself with oil revenue.

[beehive21-2009]

We have a crooked administration, in power ,most are headed to prison, in the future.It''s not like crooks never controlled the White house, in the past,they all went to, Hell.In God We Trust.The People Shall Prevail.

[cbsfan73]

curse914 talking about opium:
"They could be taxed, if legalized."

Uh..., yeah. We need more addicted dopers out here on our streets.

[timdgrim]

Iraq can give the American tax payer free oil for the next 6 years. ExxonMcCain can refine it and help it''s citizens over their crisis at home free of charge. ExxonMcCain can sell their oil to somebody else for the next 6 years. Then we''ll call it even IRag. And our guys are coming home, you''re on your own.

[barbaraf4]

"We have a crooked administration, in power ,most are headed to prison, in the future." Posted by beehive21
~~~~~~~~~~~~
No one in the administration will ever go to prison. They all will be pardoned by Bush and then he will take off for Paraguay.

[txgrouch2006]

This does not sit well with the average American. We are the ones who were forced to send our husbands, sons, daughters, wives to Iraq for a war that was uncalled for. We are the ones suffering because of the devalued dollar and high prices for food, gas, and everything else.
Posted by Vincan at 10:54 PM : Aug 06, 2008
-----------------

ARE YOU LISTENING, MR. PRESIDENT???

If not, then we''ll make sure the NEXT PRESIDENT WILL.

[txgrouch2006]

Clinton got us into this mess.

Bush hasn''t done enough to get us out.

I''m getting REALLY TIRED of hearing him on TV saying our economy is "fundmentally sound." It sounds too much like you''re saying YOU THINK YOU DON''T NEED TO DO ANYTHING.

We''ve had 7 and a half years of that. TIME TO DO SOMETHING. IF YOU DON''T, WE''LL FIND SOMEONE WHO WILL.

[cbsfan73]

curse914 got way off subject:
"Maybe the 3 Trillion could have gone to Education not Incarceration"

Tell me, how do you educate someone who is stoned on opium (highly addictive)? How do you even get them to go to work?

If it were not for dopers, the three trillion (if this is a true number) would have never been spent in the first place.

You must be stoned right now...