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Oil adds to Iraq budget surplus

But, auditors say, it is spending little on reconstruction.

WASHINGTON - Iraq isn't spending much of its own money, despite soaring oil revenues that are pushing the country toward a massive budget surplus, auditors told Congress on Tuesday.

The surplus comes as the United States continues to invest billions of dollars in rebuilding Iraq and faces a financial squeeze domestically because of record oil prices.

"The Iraqis have a budget surplus," said U.S. Comptroller General David Walker. "We have a huge budget deficit. ... One of the questions is who should be paying."

Walker and the other auditors did not give a figure for the surplus. U.S. officials contend that Iraq's lack of spending is due primarily to Baghdad's inability to determine where its money is needed most and how to allocate it efficiently.

Democrats say the assessment is proof that the Iraq war is a waste of time and money. The United States has spent more than $45-billion on rebuilding Iraq. "They ought to be able to use some of their oil to pay for their own costs and not keep sending the bill to the United States," said Sen. Patrick Leahy, D-Vt.

In recent months, Iraq experienced its highest oil production and export levels since the war began five years ago, Stuart Bowen, special inspector general for Iraq reconstruction, told the Senate Appropriations Committee on Tuesday.

While Iraqi officials estimated $35-billion in oil revenues last fall, Bowen said the final number is likely to be closer to $60-billion.

The Government Accountability Office estimates that the United States has designated $6-billion to rebuild Iraq's energy sector and $300-million to develop Iraq's government ministries. The GAO says the United States doesn't have a strategic plan on how to accomplish either goal.

Last week, Sens. Carl Levin, D-Mich., and John Warner, R-Va., asked the GAO to investigate what Iraq is doing with its oil revenue.

[Last modified March 12, 2008, 01:25:01]