*EPF503 09/24/2004
Shifts in Iraq Funding Designed to Address Immediate Priorities
(Armitage testifies before Congress on need to reallocate funds) (750)

By David Shelby
Washington File Staff Writer

Washington -- The Bush administration seeks to give the Iraqi people the resources they need to overcome the challenges they confront, and the first priority in that regard must be security and law enforcement, according to Deputy Secretary of State Richard Armitage.

Armitage appeared before a subcommittee of the House Appropriations Committee September 24 to provide testimony on the administration's request to shift funding within the $18.7 billion appropriation for Iraqi reconstruction from energy and water projects to building up security forces.

"No plan survives first contact with the enemy. Our plan didn't either. We found this insurgency to be much more virulent than we expected," Armitage told the congressional representatives.

Consequently, he said, U.S. Ambassador to Iraq John Negroponte, in consultation with Iraqi officials, conducted a review of the strategic priorities under the current circumstances to ensure that spending is keyed to the sectors with the greatest needs.

The administration is asking Congress to shift $3.46 billion away from electricity, water and sewer projects, and refined oil purchases. It would apply $1.8 billion of these funds to security and law enforcement, while the remaining funds would be allocated to intensive employment projects, economic development, enhancements to the oil infrastructure, debt forgiveness and democracy support projects.

"We took money from electricity and water because that's where it was. ... It grieves us deeply," Armitage said. He added, however, that he will appeal to other donor countries, who have not yet decided where to apply their funds, to help pick up the slack in funding for these sectors. He said countries that had not supported military action in Iraq might be more inclined to support projects of a more humanitarian nature.

Armitage will be attending an Iraqi Donors' Conference in Tokyo October 13 and 14.

Subcommittee Chairman Jim Kolbe, a Republican from Arizona, voiced his support for the administration's request, saying that the failure to stabilize Iraq would have disastrous consequences for years to come. He said that in invading Iraq, the administration had taken a calculated risk in favor of U.S. national security interests.

Even though he said that the administration had made "fundamental mistakes in the planning and execution of post-war strategy," he welcomed the reassessment of spending needs as a positive step towards achieving success in Iraq.

Democratic committee members were not as welcoming of the administration's request. Nita Lowey, a Democrat from New York, recalled several previous administration estimates of funding needs for Iraq that had subsequently been revised upwards. She also listed numerous statistics indicating that the security situation in Iraq is deteriorating.

"The American people deserve something beyond the administration's overly upbeat pronouncements of victory and progress in Iraq," she said.

David Obey, a Democrat from Wisconsin, echoed his colleague's sentiment, saying, "Quit expecting us to swallow the good news that sounds more like it's coming from the permanent president of an optimists' club than it does somebody who's leveling with us. We can take bad news, and we can make it through bad times, but we've got to have confidence in each other's veracity, judgment and evaluation.... Let's have a new round of realism."

Armitage did not downplay the difficulty of the current situation, but said that Iraqi Prime Minister Iyad Allawi is acting methodically in combating the insurgents. "The prime minister is very keen on making sure that he goes from victory to victory. ... He'll tell you there's only one way to eat an elephant -- one bite at a time. He just has to make sure he can digest what he bites off," he said.

The deputy secretary said that the Allawi government enjoys reasonably wide popular support in Iraq and told the committee members that U.S. efforts to work with the Iraqi interim government are producing better results in that Iraqis are more willing to fight for an Iraqi government than they were for an American administration.

According to a February 2004 Congressional Research Service report, the original $18.7 billion supplemental appropriation bill allocated $3.243 billion to security and law enforcement, $5.56 billion to the electricity infrastructure, and $4.332 billion to water and sewerage projects.

Under the terms of the legislation, the administration is required to seek Congressional approval for any shift in funds of more than 10 percent out of or into any sector allocation.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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