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Wyden Wins Final Approval to Cut $1.86 Billion
in Waste From Iraq Bill

Congress approves conference report including $210 million slashed from inflated request for overpriced gasoline for sale to Iraqis at subsidized prices

November 3, 2003

Washington, DC – Congress today gave final approval to U.S. Senator Ron Wyden’s (D-Ore.) cost-saving cuts from the Iraq supplemental funding bill. Wyden’s amendment with Sen. Byron Dorgan (D-N.D.), included in a final conference report approved by the Senate tonight, eliminated $1.86 billion in wasteful spending from the supplemental request. The cuts include a $210 million reduction in the president’s $900 million request to purchase gasoline, diesel and other refined oil products for Iraq, with the goal of selling the gasoline to Iraqis at subsidized prices as low as four cents per gallon.

“Oregonians today are paying an average of $1.67 a gallon for gas, and I simply refused to believe that the federal government couldn’t get a significantly better price for gasoline for a country in the Middle East than I could get at a gas station in my hometown,” said Wyden.

The Congressional Research Service reported last month that the administration may have inflated projected costs for petroleum products by as much as $249 million. Overcharging for petroleum purchases for Iraq may already be occurring under an existing contract with Halliburton subsidiary KBR. According to information supplied by the U.S. Army Corps of Engineers, the per-gallon price charged to American taxpayers by Halliburton is as much as $2.30 per gallon. That is more than double the wholesale price of gasoline in Turkey and Saudi Arabia. Iraqis currently pay about 20 dinars per liter of gasoline – roughly four to five cents per gallon.

Page 29 of the Coalition Provisional Authority Request To Rehabilitate and Reconstruct Iraq (p. 29) included an estimated cost of $900 million to cover the “difference between Iraqi demand and refinery production, and to establish and maintain a 30-day reserve in all major [petroleum] products to ensure no interruptions in basic services due to terrorist activity.” Yet an analysis by the Congressional Research Service revealed that the total cost of these petroleum products at market prices would range between $652 and $704 million. CRS states in its report, “it would seem that the CPA [Coalition Provisional Authority] is asking for substantially more money than is called for by current fuel prices in the Persian Gulf trading area.”

In addition to the $210 million reduction for petroleum purchases, the final legislation cuts $1.65 billion in funding from other portions of the supplemental request in an effort to reduce wasteful spending in Iraq. Language in the final report details specific savings for various projects including the procurement of trash trucks, development of business courses, zip code and 911 projects, housing projects, and a $400 million savings on the construction of two prisons.

“I’m pleased that Congress did its job here – taking out a sharp pencil and paring down the waste in this huge spending request,” Wyden said.

Now that the Senate and House have agreed on a final version of the Iraq supplemental spending measure, the legislation moves to the President for his signature into law.

 

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