Senate panel votes to block Iraq reconstruction

updated 5:42 p.m. ET May 1, 2008

WASHINGTON - A Senate panel has agreed unanimously to block the Defense Department from funding Iraq reconstruction projects worth more than $2 million and to begin to force Baghdad to cover the costs of training and equipping its security forces.

The provision, included in a 2009 defense policy bill approved this week by the Senate Armed Services Committee, comes as Democrats draft a similar provision within separate legislation that would cover this year's war spending.

The efforts are part of the latest push on Capitol Hill to get Iraq to spend more of its own money and spare U.S. taxpayers. Democrats and many Republicans say it is unfair that Iraq is looking at pulling in as much as $70 billion in oil revenues this year while Americans grapple with soaring fuel prices at the pump.

"We want to send a very powerful message to the Iraqis and to the administration as to the cost of this war and the absurdity that a country which is exporting 2 million barrels a day of oil, for which we are paying when it gets to the pump now $3.50 a gallon" is not fully paying to rebuild itself, said Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee.

The White House said Thursday that for American troops to be withdrawn eventually from Iraq, money must be spent to help rebuild the country and train Iraqi troops.

"I think it's important that the Iraqis actually are spending a lot more on their reconstruction than maybe is commonly understood out there," said White House deputy press secretary Tony Fratto. "In their most recent budget, they'll outspend the United States 10 to 1 on reconstruction. ... We are pretty much out of the business of very large reconstruction projects in Iraq."

Fratto did not say whether the administration would threaten to veto the legislation. Lawmakers involved in drafting the bill said it was unlikely, particularly because of the bipartisan support it attracted.

"They didn't reject it," said Sen. Ben Nelson of closed-door negotiations this week with the National Security Council. Nelson, D-Neb., sponsored the provision along with Sens. Susan Collins, R-Maine, and Evan Bayh, D-Ind.

Defense Dept. affected
The defense policy bill, which will be considered by the full Senate later this month, would only affect Defense Department spending in 2009, which is estimated at $612.5 billion. It is unclear how much of that money could potentially be used for reconstruction and therefore might be affected by the proposed restriction.

Levin said an attempt will be made on the Senate floor to expand to the State Department the prohibition on using taxpayer money for major Iraqi reconstruction. The State Department handles most of the large rebuilding efforts.

"The intention here is to stop the funding of infrastructure by whatever department," he said.

The defense authorization legislation specifically supports smaller rebuilding projects, but would require the administration to work with Baghdad to obligate its own money first. It also says the U.S. must initiate negotiations with Iraq on a broader agreement to share the costs of combat operations in Iraq.

Instead of flatly prohibiting aid to the Iraqi security forces, the bill says the U.S. "shall take actions to ensure that Iraqi funds are used" to cover those costs, including the salaries of the forces and any payments to Sunnis who are part of the Awakening Movement.

Overall, the defense policy bill would authorize $542.5 billion in annual defense spending, as well as $70 billion for the wars in Iraq and Afghanistan.

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