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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