Bremer tells lawmakers that aid to Iraq should not be a loan
KEN GUGGENHEIM, Associated Press Writer
(09-25) 11:59 PDT WASHINGTON (AP) --
Facing pressure from lawmakers in both parties, the American administrator in Iraq said Thursday the United States should not ask Iraqis to use future oil revenue to repay part of the $20.3 billion that the Bush administration is seeking to rebuild the country.
L. Paul Bremer said Iraq already has too much debt and will need the revenue for reconstruction. Using it as collateral for a loan could create the appearance that "we are in some way taking a lien against oil revenues and therefore that's why we fought the war," Bremer said.
But members of the Senate Armed Services Committee urged Bremer to consider the possibility of loans or loan guarantees at a time when the White House wants to commit $87 billion in public money to Iraq and Afghanistan.
"Wouldn't it give the Iraqi people more of an investment in their own infrastructure for us to structure" as a long-term loan the part of the spending bill used for rebuilding the country's infrastructure? said Sen. Susan Collins, R-Maine.
Bremer was appearing in three congressional hearings Thursday, his fourth consecutive day on Capitol Hill as the administration's main salesman as the $87 billion proposal.
Democrats have accused the administration of trying to ram the plan through Congress without giving lawmakers enough time to consider it. Sen. Robert Byrd, D-W.Va., urged Bremer to "use your good authorities to impress upon this administration the need to slow down this train."
Senate leaders have said they hope to begin floor debate next week. But the Armed Services Committee chairman, Sen. John Warner, R-Va., told Byrd that he believed the leadership was trying to work out a schedule that would satisfy Republicans and Democrats.
Though the spending request probably will be approved, Democrats have stepped up criticism in particular of $20.3 billion sought for Iraq reconstruction and are considering ways to separate that money from the larger plan. They also are thinking about trying to suspend new tax cuts for the wealthiest Americans and using that money to pay for the rebuilding.
Both ideas would face opposition from Republicans, who control both the House and Senate. But some Republicans have joined Democrats in calling for Iraq to use oil revenues to cover at least the $15 billion of the proposal for Iraqi infrastructure.
"In the long run, Iraq will be a prosperous country," Collins said. "Therefore it seems logical to many of us to come up with a way to structure part of the construction costs as a long-term loan."
Added Sen. Carl Levin of Michigan, the committee's top Democrat: "We're troubled here by the fact that we're being asked to put up $15 billion for reconstruction funds and that the Iraqis have this huge asset."
Bremer said that even if Bush's proposal were approved, Iraq would need about $40 billion more over five years to pay reconstruction costs. If the United States insists that Iraq use oil revenues to repay American loans, "then necessary investments that the Iraqis should be making in their country will not happen," he said.
Sen. Jim Talent, R-Mo., noted that the United States was seeking international contributions at a donors' conference next month. He said "old Europe" is unlikely "to give money to Iraq if we're loaning it to Iraq."
Bremer also said Iraq does not have a government that can take on long-term debt. Bremer is overseeing Iraq in conjunction with a U.S.-appointed interim Governing Council until a constitution is written and elections are held.
Sen. Evan Bayh, D-Ind., said that means Iraq may honor the $200 billion in international debt run up by ousted leader Saddam Hussein, while the governing council is seen as lacking the authority to take on new loans.
"That is ironic, to say the least," Bayh said.
"Well, there are lots of ironies in the situation in Iraq," Bremer said.
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