BAGHDAD, Aug. 6, 2008
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
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Play CBS Video Video Iraq's Unused Oil Profits From 2005 to 2007, Iraq reportedly brought in $90 billion in oil revenue but spent only $6.7 billion on reconstruction. So far, U.S. taxpayers have devoted $48 billion. Chip Reid reports.
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Iraq's budget surplus may amount to $79 billion, according to a government report, fed largely by skyrocketing oil revenues. (CBS)
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Photo Essay Week In Iraq Photos A daily diary with scenes of the latest attacks and snapshots from the effort to rebuild a nation.
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Interactive Iraq: 5 Years At War Five years after the U.S.-led invasion, the war wears on.
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.
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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. 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-Mich.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.
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
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See all 148 CommentsThey deserve every penny after what was done to them by the US.
Tell them if they don''''t like it the US will invade their country for a BS Reason.....wait that already happened...
Posted by deacon20081 at 06:02 PM : Aug 07, 2008
Use reverse psychology on them. They WANT us to leave.
Tell them we''ll stay unless they give us a 10 year contract like that. And we''ll always be ready to come back.
The United States of America. The REALLY ANNOYING country. Pay us and we''ll go away.
Tell them if they don''t like it the US will invade their country for a BS Reason.....wait that already happened...
He''s the one who atacked Iraq in 1998 WITHOUT PROOF of WMD''s.
Hillary and the majority of Congress authorized Bush to invade Iraq BASED ON AN UNBROKEN LINE OF LOGIC FROM 1998.
That war has now nearly bankrupted our country, while Iraq is SWIMMING IN $79 BILLION.
Let Bill Clinton go to Iraq and negotiate REPARATIONS to pay us back for PUTTING THEM IN POWER.
If not, our military is there to SIEZE AND OCCUPY SOME KEY OIL FIELDS to repay ourselves.
Suppose Saddam DIDN''T have WMD''s by 1998? Did Clinton present ANY PROOF that there were WMD''s???
NO!!! He didn''t even ATTEMPT to prove it. WHY WAS THERE NO MASSIVE OUTCRY AGAINST CLINTON???
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That would have been back in when he used them. HE USED THEM UP, and he didn''t have any more.
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And im just thinking that Clinton or his other possible successor (not Bush) would have vetted the actual intel a little better than Bush
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Gore would have continued the "containment/restraint" policy a.k.a APPEASEMENT.
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They still would have had to deal with 9/11 though.
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Probably NOT. As we have seen, there is less likelyhood of being attacked WHILE YOU''RE KICKING BUTT SOMEWHERE. If Clinton had launched an all-out war BACK WHEN WE COULD AFFORD TO PAY FOR IT, 9/11 would not have happened.
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And what were those pictures that Powell was showing us really of during the build up to the war?
Posted by fedupwithit1 at 03:28 PM : Aug 07, 2008
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You''re getting confused. That was the 1991 war, BEFORE Clinton was in office.
My feeling is, he DIDN''T HAVE THEM anymore by 1998. All gone already. He was bluffing to maintain his "strong man" image in the Arab world.
Unless you can PROVE Saddam had WMD''s in 1998, the distince possibility is that Clinton led us into a false war BECAUSE HE WAS DESPERATE TO AVOID IMPEACHMENT.
"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. "
NOTICE THE SIMILARITIES??? If you deny that Hillary was following the same logic in 2002, you''re smoking bunny ear fuzz.
%u201CSaddam Hussein is a tyrant who has tortured and killed his own people, even his own family members, to maintain his iron grip on power. He used chemical weapons on Iraqi Kurds and on Iranians, killing over 20 thousand people. Unfortunately, during the 1980''s, while he engaged in such horrific activity, he enjoyed the support of the American government, because he had oil and was seen as a counterweight to the Ayatollah Khomeini in Iran"
Posted by fedupwithit1 at 01:28 PM : Aug 07, 2008
PLEASE read the FULL TEXT of Clinton''s 1998 speech, AND Hillary''s 2002 speech which continues the same unbroken line of logic as if nothing changed.
I wish I could post it all, but it''s far, far too long.
Clinton''s 1998 speech explaining his attack on Iraq and the ABRUPT change in policy to "regime change" (as Hillary later called it) JUST DAYS BEFORE HIS SCHEDULED IMPEACHMENT VOTE:
http://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/clintontext121698.htm
Hillary''s 2002 speech containing ALMOST THE EXACT SAME WORDING regarding the dangers of Saddam:
http://clinton.senate.gov/speeches/iraq_101002.html
When you see ALMOST IDENTICAL THINKING regarding Saddam, it''s impossible to avoid the conclusion that it is the same unbroken line of logic. Hillary even connects Iraq to 9/11 herself.
Knowing that THERE WERE NO WMD''S, don''t both of them look like total idiots???
Posted by fedupwithit1 at 01:26 PM : Aug 07, 2008
It''s POSSIBLE that the moon will be square when it rises tonight.
BUT NOT BLOODY LIKELY.
Saddam resisted inspections before Clinton''s 1998 attack. He resisted follow-up inspections to assess the effectiveness of the attack. NO HINT OF COMPLIANCE OF ANY KIND.
Now we know HE WAS BLUFFING to maintain his image in the Arab world. HE HAD NO WMD''S during the Clinton years, which is why NONE WERE EVER FOUND.
Hillary continued the lie in her Senate floor speech in 2002, and she connected it to 9/11.
Bush bought into the same lie because it suited his agenda to finish his Daddy''s war, and because he''s stupid.
All lies originate with Bill Clinton.
The anthrax case makes the White House stink like rotten fish. Where is the Democrat outcry? Did they stop watching the news while they''re off duty? Not their job?
Or THEY''RE IN ON IT, in exchange for money. What do YOU think?
And I will not argue that the GOP has used fillibuster. But this is a damning issue for the dems. One of the most pressing issues of the decade and they run away to vacation. Because they know their "conservationist" views do not hold water when it comes to talk about our nations physical and economic security in terms of energy.
Posted by huanaco at 12:49 PM : Aug 07, 2008
That''s PRESIDENT Sucker to you. More like President Crook number 538927. And we already impeached the previous President Crook, so it''s high time.
As soon as you Clintonites drop your partisan rhetoric and face the reality that Clinton was just as much to blame for all this, we''d make more progress.
Clinton started the WMD lie in a desperate attempt to avoid impeachment in 1998. It didn''t work, but look where we are now.
Just FYI, the Enron scam started in 1997.
But I agree, the sleaze covers BOTH sides of the aisle in Congress.
Once Ted Kennedy goes to his final rest, we will be able to make a CLEAN SWEEP of Congress AND the White House.
NO MORE BABY BOOMERS! NO MORE SERIAL POLITICIANS! START OVER AGAIN!
A true bloodless revolution. Is it possible? Or am I just dreaming? Well, I''ve got Remington, Smith, and Wesson on my side in case it goes the other way.
GENTLEMEN ALL : WE ARE THE MOST STUPID COUTRY IN THE WORLD IN VIEW OF WHAT IS HAPPENING IN IRAK. AT LEAST WE COULD BE GETTING CHEAP OIL FROM THAT PLACE AS A REWARD FOR THE SACRIFACES DONE OVER THERE. IN THE MEANTIME , WE AMERICANS GO TO THE PUMPS LIKE SHEEPS GETTING RIP OFF, WAKE UP AMERICA IMPEACH THE SUCKER DISGUISED AS A PRESIDENT.
History is history and frankly I don''t see a parallel between post war Japan and corruption in Iraq today.
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