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Oil Likely To Swell Iraq Coffers

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The Associated Press

Published: August 6, 2008

WASHINGTON - The Iraqi government could end this year with as much as a $79 billion cumulative budget surplus, based largely on ever-increasing oil revenue, congressional auditors say.

A report by the Government Accountability Office made public Tuesday prompted renewed calls from senators that Baghdad pay more of the bill for its own reconstruction, which has been heavily supported with U.S. funds.

The projected Iraq surplus, including unspent money from 2005 through 2008, has been building because of rising world oil prices, increasing Iraqi oil production, the government's inability to execute budgets for spending its money and persistent violence in the country, the GAO said.

The report was requested by Sen. Carl Levin, D-Mich., and Sen. John Warner, R-Va., the chairman and ranking member, respectively, of the Senate Armed Services Committee.

"The Iraqi government now has tens of billions of dollars at its disposal to fund large-scale reconstruction projects," Levin said in a statement. "It is inexcusable for U.S. taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves."

"It is time for the sovereign government of Iraq, using its revenues, expenditures and surpluses, to fully assume the responsibility to provide essential services and improve the quality of life for the Iraqi people," Warner said.

The GAO said Iraq had an estimated cumulative budget surplus of about $29 billion from 2005 to 2007 and could have another surplus of up to $50 billion this year.

The expected surplus could be even lower if Iraq passes stalled legislation for a $22 billion supplemental budget for 2008 - and if the government executes the budget.

But the report noted the oft-repeated factors holding the government back on its spending plans.

The report also estimated that this year Iraq could generate $67 billion to $79 billion in oil sales.

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