FoundingFathers
09-08-2003, 06:09 PM
Bush Requests $87 Bln for Iraq, More May Be Needed (Update1)
Sept. 8 (Bloomberg) -- U.S. President George W. Bush's request for $87 billion for Iraq operations doubles the amount spent on the war so far and opens the possibility more will be needed if Iraqi oil revenue and other assets don't pan out.
Most of the money -- $66 billion -- would go for military and intelligence operations in Iraq, Afghanistan and elsewhere. About $20 billion is intended to ``help secure Iraq's transition to self-government and create the conditions necessary for economic investment,'' according to a White House fact sheet.
That $20 billion is only a down payment for reconstruction, the fact sheet, released today, says. ``Initial estimates are that Iraq will need between $50-$75 billion to achieve these conditions for success,'' it says.
The president's request, made in a nationally televised speech last night, comes as and Democrats and some Republicans in Congress are pressuring the White House to outline the full cost of the U.S. commitment in Iraq and to persuade other nations to share the burden.
Bush characterized Iraq as the ``central front'' in the global war against terrorism and said transforming the country from a dictatorship under Saddam Hussein to a democracy will be ``difficult and costly.'' He vowed to see the operation through.
``We will do what is necessary, we will spend what is necessary,'' the president said.
Oil Revenue
The White House said it may make up the difference between the $20 billion it is requesting for reconstruction and the $50 billion to $75 billion needed through Iraqi oil and other revenue and ``recovered assets.'' The administration said it expects some of the rest will be contributed by other nations.
Looting at oil facilities and the general lack of security in Iraq are the two main impediments to higher oil production, said Leo Drollas, Deputy Director of the London-based Center for Global Energy Studies.
If conditions improve, Iraq could produce an average of 1.9 million barrels a day in 2004, Drollas said. The country could use as much as 630,000 barrels a day for domestic demand, leaving 1.27 million barrels a day for export, he said. Iraq is currently producing about 900,000 barrels a day.
``The hope is that they will be in a better shape in terms of security and organization to produce more,'' Drollas said in an interview. ``It's not much to increase output steadily onward, in theory.''
At $25 a barrel, the midpoint of OPEC's target price range, Iraq would earn $11.6 billion in 2004 from oil sales.
`Limited' Impact
The impact of Iraqi oil income ``will be limited,'' said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. ``They should be able to pay for all the basics of their own, but will be unable to pay any of the cost of occupying the country or of finding Saddam Hussein.''
Members of Congress said they will approve the money needed by the U.S. military, though Democrats said they will demand close oversight of reconstruction spending.
House Appropriations Chairman Bill Young, a Florida Republican, said a formal detailed request for the money isn't expected to arrive in Congress for at least a week. He promised to ``aggressively expedite'' the funding.
``We have troops in harm's way, and we should provide them ever resource available to ensure their safety,'' Young said.
Budget Effects
House Minority Leader Nancy Pelosi, a California Democrat, said Democrats will give greater scrutiny to funding the rebuilding Iraq.
``Already facing a nearly half trillion-dollar deficit, American taxpayers deserve to know how this spending will affect our ability to address the unmet needs in our own country,'' she said.
This is the second funding request Bush has made for the war. Congress in April approved a supplemental spending bill that included $62.4 billion for troops and supplies.
By contrast, the 1991 Gulf War that reversed Hussein's invasion of Kuwait cost about $82 billion in current dollars. The U.S. paid only $9 billion with the rest coming from allies.
The $87 billion would add to a U.S. budget deficit that's already projected to reach a record $475 billion in fiscal 2004.
While Congress will ultimately fund Bush's budget request as a way of ``supporting the troops,'' he may not get ``all he wants all at once,'' said Stan Collender, a federal budget analyst at Fleishman-Hillard. ``Polls show that Americans are already concerned about how much we are spending there, so Democrats have a reason to give him a hard time.''
UN Request
The other major component of Bush's address last night was the administration's plan to seen a United Nations resolution to endorse an international peacekeeping force in Iraq under U.S. command.
The U.S. has about 130,000 troops in Iraq, along with about 22,000 personnel from 29 other nations. The U.K., the chief U.S. ally in the Iraq war, said it would send more than 1,000 troops to bolster its 11,000-strong force already in Iraq, deploying soldiers from two battalions.
Plans for troop commitments are running into resistance in the UN from France and Germany, which led opposition to the U.S. invasion earlier this year.
Germany officials said the government wouldn't fund an international force and hadn't discussed sending troops to the country.
``There are still no plans for a military engagement in Iraq,'' German government spokesman Bela Anda told reporters. Humanitarian assistance, including training of Iraqi police and military, is being considered.
Bush's request to Congress calls for spending about $51 billion for military operations in Iraq, including $800 million to transport and support the troops from other countries. A Polish-led division, for example, is replacing U.S. Marines in Southern Iraq.
It also would pay for $300 million in body-armor for troops and $140 million for heavily armored Humvee trucks.
The military funds would also be used to give troops a two- week ``rest and recreation'' break, the fact sheet said.
Last Updated: September 8, 2003 16:27 EDT
Sept. 8 (Bloomberg) -- U.S. President George W. Bush's request for $87 billion for Iraq operations doubles the amount spent on the war so far and opens the possibility more will be needed if Iraqi oil revenue and other assets don't pan out.
Most of the money -- $66 billion -- would go for military and intelligence operations in Iraq, Afghanistan and elsewhere. About $20 billion is intended to ``help secure Iraq's transition to self-government and create the conditions necessary for economic investment,'' according to a White House fact sheet.
That $20 billion is only a down payment for reconstruction, the fact sheet, released today, says. ``Initial estimates are that Iraq will need between $50-$75 billion to achieve these conditions for success,'' it says.
The president's request, made in a nationally televised speech last night, comes as and Democrats and some Republicans in Congress are pressuring the White House to outline the full cost of the U.S. commitment in Iraq and to persuade other nations to share the burden.
Bush characterized Iraq as the ``central front'' in the global war against terrorism and said transforming the country from a dictatorship under Saddam Hussein to a democracy will be ``difficult and costly.'' He vowed to see the operation through.
``We will do what is necessary, we will spend what is necessary,'' the president said.
Oil Revenue
The White House said it may make up the difference between the $20 billion it is requesting for reconstruction and the $50 billion to $75 billion needed through Iraqi oil and other revenue and ``recovered assets.'' The administration said it expects some of the rest will be contributed by other nations.
Looting at oil facilities and the general lack of security in Iraq are the two main impediments to higher oil production, said Leo Drollas, Deputy Director of the London-based Center for Global Energy Studies.
If conditions improve, Iraq could produce an average of 1.9 million barrels a day in 2004, Drollas said. The country could use as much as 630,000 barrels a day for domestic demand, leaving 1.27 million barrels a day for export, he said. Iraq is currently producing about 900,000 barrels a day.
``The hope is that they will be in a better shape in terms of security and organization to produce more,'' Drollas said in an interview. ``It's not much to increase output steadily onward, in theory.''
At $25 a barrel, the midpoint of OPEC's target price range, Iraq would earn $11.6 billion in 2004 from oil sales.
`Limited' Impact
The impact of Iraqi oil income ``will be limited,'' said Sarah Emerson, managing director of Energy Security Analysis Inc., a consulting firm in Wakefield, Massachusetts. ``They should be able to pay for all the basics of their own, but will be unable to pay any of the cost of occupying the country or of finding Saddam Hussein.''
Members of Congress said they will approve the money needed by the U.S. military, though Democrats said they will demand close oversight of reconstruction spending.
House Appropriations Chairman Bill Young, a Florida Republican, said a formal detailed request for the money isn't expected to arrive in Congress for at least a week. He promised to ``aggressively expedite'' the funding.
``We have troops in harm's way, and we should provide them ever resource available to ensure their safety,'' Young said.
Budget Effects
House Minority Leader Nancy Pelosi, a California Democrat, said Democrats will give greater scrutiny to funding the rebuilding Iraq.
``Already facing a nearly half trillion-dollar deficit, American taxpayers deserve to know how this spending will affect our ability to address the unmet needs in our own country,'' she said.
This is the second funding request Bush has made for the war. Congress in April approved a supplemental spending bill that included $62.4 billion for troops and supplies.
By contrast, the 1991 Gulf War that reversed Hussein's invasion of Kuwait cost about $82 billion in current dollars. The U.S. paid only $9 billion with the rest coming from allies.
The $87 billion would add to a U.S. budget deficit that's already projected to reach a record $475 billion in fiscal 2004.
While Congress will ultimately fund Bush's budget request as a way of ``supporting the troops,'' he may not get ``all he wants all at once,'' said Stan Collender, a federal budget analyst at Fleishman-Hillard. ``Polls show that Americans are already concerned about how much we are spending there, so Democrats have a reason to give him a hard time.''
UN Request
The other major component of Bush's address last night was the administration's plan to seen a United Nations resolution to endorse an international peacekeeping force in Iraq under U.S. command.
The U.S. has about 130,000 troops in Iraq, along with about 22,000 personnel from 29 other nations. The U.K., the chief U.S. ally in the Iraq war, said it would send more than 1,000 troops to bolster its 11,000-strong force already in Iraq, deploying soldiers from two battalions.
Plans for troop commitments are running into resistance in the UN from France and Germany, which led opposition to the U.S. invasion earlier this year.
Germany officials said the government wouldn't fund an international force and hadn't discussed sending troops to the country.
``There are still no plans for a military engagement in Iraq,'' German government spokesman Bela Anda told reporters. Humanitarian assistance, including training of Iraqi police and military, is being considered.
Bush's request to Congress calls for spending about $51 billion for military operations in Iraq, including $800 million to transport and support the troops from other countries. A Polish-led division, for example, is replacing U.S. Marines in Southern Iraq.
It also would pay for $300 million in body-armor for troops and $140 million for heavily armored Humvee trucks.
The military funds would also be used to give troops a two- week ``rest and recreation'' break, the fact sheet said.
Last Updated: September 8, 2003 16:27 EDT