[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                    APPROPRIATIONS FOR 2004--Part 5


      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 2004

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED EIGHTH CONGRESS
                              FIRST SESSION
                                ________

   SUBCOMMITTEE ON FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED 
                                PROGRAMS
                      JIM KOLBE, Arizona, Chairman
 JOE KNOLLENBERG, Michigan        NITA M. LOWEY, New York
 JERRY LEWIS, California          JESSE L. JACKSON, Jr., Illinois
 ROGER F. WICKER, Mississippi     CAROLYN C. KILPATRICK, Michigan
 HENRY BONILLA, Texas             STEVEN R. ROTHMAN, New Jersey
 DAVID VITTER, Louisiana          MARCY KAPTUR, Ohio               
 MARK STEVEN KIRK, Illinois
 ANDER CRENSHAW, Florida

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
    Charles Flickner, Alice Grant, and Scott Gudes, Staff Assistants,
                     Lori Maes, Administrative Aide
                                ________

                                 PART 5

    PRESIDENT'S FY 2004 SUPPLEMENTAL REQUEST FOR IRAQ AND AFGHANISTAN

                                   S

                                ________

         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 92-205                     WASHINGTON : 2004


                         COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                        DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California                   JOHN P. MURTHA, Pennsylvania
 HAROLD ROGERS, Kentucky                   NORMAN D. DICKS, Washington
 FRANK R. WOLF, Virginia                   MARTIN OLAV SABO, Minnesota
 JIM KOLBE, Arizona                        STENY H. HOYER, Maryland
 JAMES T. WALSH, New York                  ALAN B. MOLLOHAN, West Virginia
 CHARLES H. TAYLOR, North Carolina         MARCY KAPTUR, Ohio
 DAVID L. HOBSON, Ohio                     PETER J. VISCLOSKY, Indiana
 ERNEST J. ISTOOK, Jr., Oklahoma           NITA M. LOWEY, New York
 HENRY BONILLA, Texas                      JOSE E. SERRANO, New York
 JOE KNOLLENBERG, Michigan                 ROSA L. DeLAURO, Connecticut
 JACK KINGSTON, Georgia                    JAMES P. MORAN, Virginia
 RODNEY P. FRELINGHUYSEN, New Jersey       JOHN W. OLVER, Massachusetts
 ROGER F. WICKER, Mississippi              ED PASTOR, Arizona
 GEORGE R. NETHERCUTT, Jr.,                DAVID E. PRICE, North Carolina
Washington                                 CHET EDWARDS, Texas
 RANDY ``DUKE'' CUNNINGHAM,                ROBERT E. ``BUD'' CRAMER, Jr., 
California                                 Alabama
 TODD TIAHRT, Kansas                       PATRICK J. KENNEDY, Rhode Island
 ZACH WAMP, Tennessee                      JAMES E. CLYBURN, South Carolina
 TOM LATHAM, Iowa                          MAURICE D. HINCHEY, New York
 ANNE M. NORTHUP, Kentucky                 LUCILLE ROYBAL-ALLARD, California
 ROBERT B. ADERHOLT, Alabama               SAM FARR, California
 JO ANN EMERSON, Missouri                  JESSE L. JACKSON, Jr., Illinois
 KAY GRANGER, Texas                        CAROLYN C. KILPATRICK, Michigan
 JOHN E. PETERSON, Pennsylvania            ALLEN BOYD, Florida
 VIRGIL H. GOODE, Jr., Virginia            CHAKA FATTAH, Pennsylvania
 JOHN T. DOOLITTLE, California             STEVEN R. ROTHMAN, New Jersey
 RAY LaHOOD, Illinois                      SANFORD D. BISHOP, Jr., Georgia
 JOHN E. SWEENEY, New York                 MARION BERRY, Arkansas            
 DAVID VITTER, Louisiana
 DON SHERWOOD, Pennsylvania
 DAVE WELDON, Florida
 MICHAEL K. SIMPSON, Idaho
 JOHN ABNEY CULBERSON, Texas
 MARK STEVEN KIRK, Illinois
 ANDER CRENSHAW, Florida

                 James W. Dyer, Clerk and Staff Director

                                  (ii)

      FOREIGN OPERATIONS, EXPORT FINANCING, AND RELATED PROGRAMS 
                        APPROPRIATIONS FOR 2004

                              ----------                              

                                     Wednesday, September 24, 2003.

       PRESIDENT'S FISCAL YEAR 2004 SUPPLEMENTAL REQUEST FOR IRAQ

                               WITNESSES

AMBASSADOR PAUL BREMER, PRESIDENTIAL ENVOY, ADMINISTRATOR, AND HEAD OF 
    THE COALITION PROVISIONAL AUTHORITY
GENERAL JOHN P. ABIZAID, COMMANDER, UNITED STATES CENTRAL COMMAND

                   Chairman Kolbe's Opening Statement

    Mr. Kolbe. The subcommittee will come to order. As I said, 
we are going to be interrupted very shortly apparently by 
votes, but we will at least begin with our opening statements. 
We are very pleased today to have for this first hearing on the 
supplemental appropriations that has been submitted by the 
President for the military and for reconstruction in Iraq and 
Afghanistan, Ambassador Paul Bremer. We welcome Ambassador 
Bremer, who is the Presidential envoy and our Administrator and 
head of the Coalition Provisional Authority and reconstruction 
efforts in Iraq.
    We are also very pleased to have with us today General 
Abizaid, the Commander of the U.S. Central Command.
    Thank you both very much for taking the time to be with us 
to review this extremely important supplemental appropriations 
legislation.
    The subcommittee has convened today to review the 
President's $87 billion fiscal year 2004 supplemental request, 
and specifically the $20.3 billion requested for reconstruction 
and security efforts in Iraq. Clearly, the reconstruction of 
Iraq is among the most important issues affecting U.S. policy 
and our national security. The creation of a free, democratic 
and economically prosperous Iraq is important to U.S. security, 
to winning the war on terrorism and to providing peace and 
stability in the Middle East.
    Our men and women in the United States Armed Forces, along 
with our coalition allies, swiftly defeated Saddam Hussein's 
military, and we deposed its brutal regime. General Abizaid, we 
are indebted to the men and women of the Armed Forces who have 
made and continue to make sacrifices to guarantee the freedom 
not only of the Iraqis, but of all of us.
    Now, having won the major part of this military conflict, 
we are faced with what is clearly an equally daunting and 
perhaps an even more daunting task; we have to build a new 
Iraqi nation out of the rubble of a tyranny that inflicted 
decades of cruelty, of mismanagement, of underinvestments in 
Iraq and in the Iraqi people.
    The shocking condition of Iraq's infrastructure has only 
fully come to light since the triumph of our military forces. 
By way of illustration I note, for example, one element in this 
supplemental request is for wastewater treatment. The current 
coverage of such treatment in Iraqi urban areas is only 6 
percent; 6 percent of Iraq has sewage treatment.
    We are not the first generation of Americans to be faced 
with this challenge. After World War I, we defeated the central 
powers, and then we retreated from global involvement as our 
allies demanded reparation payments, and Europe found itself at 
war again just two decades later.
    In World War II, we took a very different approach. We 
developed the Marshall Plan for the reconstruction of both 
Europe and Japan, arguably the most creative and successful 
foreign assistance program in history. The Marshall Plan was a 
bipartisan effort, and it was decisive action after that 
generation saw Europe sliding into instability.
    Now, in Iraq, many would argue that we have another chance 
to get it right. If we don't, that nation could earn the label 
of a failed state, might well become a divided nation, and 
become an incubator for terrorism and further instability in 
the Middle East.
    In April, this Congress passed an emergency wartime 
supplemental appropriation bill which included some $2.475 
billion for immediate relief on reconstruction. All, or 
virtually all, of these funds have now been apportioned or 
allocated or under contract. USAID and other agencies have been 
hard at work in support of the CPA--the Coalition Provisional 
Authority. They are refurbishing health clinics, repairing 
power and water plants, and putting the port of Um Qasr back in 
operation.
    An Iraqi Governing Council has been formed under Ambassador 
Bremer's guidance. Iraqi ministers have been appointed and 
economic reforms have been approved.
    Since early April, I have journeyed three times to the 
region to meet with reconstruction officials, beginning with 
General Garner and our disaster assistance teams as they 
prepared to deploy from Kuwait to Baghdad in April. Many of us 
here met with Ambassador Bremer shortly after he requested the 
President's request. I saw him again in Amman, Jordan, and last 
month we visited in Iraq when we had a chance to see firsthand 
the challenges that Ambassador Bremer and his team faced.
    No one needs to convince me about the need to enhance and 
approve security and public safety. Our CODEL--congressional 
delegation was in Baghdad the day the U.N. Compound was bombed. 
In fact, we were in Ambassador Bremer's conference room being 
briefed at the time that it happened.
    President Bush has rightly responded in this supplemental 
request to the needs for investments in security and 
reconstruction. This need has been identified and articulated 
by virtually every Member of Congress who has traveled in Iraq. 
The package before us follows the strategic plan that 
Ambassador Bremer has laid out. It invests in security, such as 
recruiting police forces, border enforcement agents, creation 
of a new Iraqi Army that no longer poses a threat to its 
neighbors. It supports creation of a fair justice and judicial 
system, including technical assistance for investigation of 
crimes against humanity. It increases electricity generation, 
access to safe drinking water, irrigation systems for 
agriculture, provision of safe transportation such as 
modernizing the airports at Baghdad and Basra. It provides for 
refurbishment of hospitals and for medical equipment for those 
hospitals and other clinics. It seeks to stimulate economic 
development and private enterprise.
    And while I support the need for this bold and sweeping 
action to create a new Iraq, I want to make sure that the 
amounts that are requested are justified and fully explained. 
Let me be clear. This subcommittee intends to scrub this 
funding request. We will ask, I think, tough and probing 
questions today in an effort to understand how the request was 
compiled and how the funds are going to be spent. We want to 
know how results will be achieved, how success will be 
measured, and which agencies and individuals are going to be 
held accountable.
    It is unclear to me whether the current organizational 
approach is appropriate for administering over $20 billion in 
foreign assistance. The subcommittee will have another hearing 
next Tuesday morning with Deputy Secretary of State Rich 
Armitage and USAID Administrator Andrew Natsios. At that 
hearing, there will certainly be questions about Iraq but they 
will mostly focus on the request for reconstruction in 
Afghanistan, and other aspects.
    Rebuilding Iraq ought not to be a partisan issue. All of us 
have a stake in the successful outcome of our reconstruction 
effort. Success will mean bringing home our men and women from 
overseas deployment. Success is essential to America's role in 
the Middle East and the Arab world. We need to follow through 
on our commitment. We cannot afford not to succeed.
    Ambassador Bremer and General Abizaid, we greatly 
appreciate your taking time from your duties to appear before 
this subcommittee. I know that you have been doing a lot of 
testifying before committees of Congress. Before turning to my 
distinguished Ranking Member Ms. Lowey, I want to thank both of 
you for your service to our Nation. I am quite aware of 
challenges that you face personally, and that the men and women 
under your commands face. We thank you for the service that you 
are providing both for the American people and for the millions 
of Iraqis who want nothing more than a peaceful, and democratic 
and a prosperous nation.
    Ms. Lowey, I will turn to you.

                     Mrs. Lowey's Opening Statement

    Mrs. Lowey. Thank you, Mr. Chairman, and I join you in 
welcoming Ambassador Paul Bremer and General John Abizaid this 
afternoon to the Foreign Operations Subcommittee.
    As we begin what will be a difficult process, I want to 
first express my gratitude and support to the men and women 
deployed to Iraq or Afghanistan, both military and civilians, 
who are being asked to risk their lives every day. And as I 
seek a frank assessment of the situation and ask necessary 
questions, it is not meant--and I want to make that clear--to 
reflect on the dedicated effort of those individuals, and that 
includes both of you. And I thank you again for the service to 
your country.
    I also want to say that I believe that reconstructing Iraq 
is a national security imperative. The stakes are very high. We 
have an opportunity to establish a democracy in Iraq which 
would have the potential to transform the region and set a 
powerful example for other troubled areas of the world. If we 
fail to stabilize Iraq or break the promise of freedom and 
democracy, we may inadvertently embolden those who want to 
destroy America, and in that way reconstructing Iraq is a 
United States homeland security imperative.
    And I agree with you, Mr. Bremer, when you refer to the 
Marshall Plan and the historic success of that effort. The 
distinction, though, is that George Marshall planned in concert 
with other nations, took his plan to the American people, took 
a long while to finalize it, worked with Congress to authorize 
the plan and appropriate the funds to execute it. This request 
identifies reconstruction needs in many sectors, but, in my 
judgment, it is no Marshall Plan.
    Mr. Bremer, in your testimony before the Senate on Monday, 
you indicated that this $20 billion would be most of what is 
required to rebuild Iraq. While I respect the difficulty of the 
job you are undertaking and don't doubt the sincere efforts of 
your staff, this is truly puzzling to me. As late as this past 
spring, Congress was given the distinct impression that the 
$2.5 billion allocated for reconstruction was all that would be 
required, and that other donor resources, oil revenue, seized 
assets, would be sufficient to cover future costs. But in the 
August 26th Wall Street Journal, you were quoted as saying that 
the total cost of rebuilding Iraq could eventually run as high 
as $100 billion. The World Bank is expected to estimate that it 
will take $50- to $75-billion to rebuild a stable Iraq.
    We seem to have transitioned from a cautious beginning to 
requesting funding for everything without a plan or a thorough 
justification. And not only have the cost estimates been 
unrealistic, the entire postwar experience appears to have 
taken us by surprise. We were told that we would be welcomed 
with open arms by the Iraqi people, and that Iraqi Government 
institutions would be restored after a short hiatus. The vision 
of postwar reconstruction presented to Congress at that time 
was, for many of us, either hopelessly naive or grossly 
incompetent.
    So I agree that we have to address all the areas covered in 
your request. There is broad bipartisan support to provide what 
is necessary not only on this committee, but in the Congress. 
But we have a duty, a responsibility to ask critical questions, 
and I do believe the administration has a duty to provide the 
answers.
    Mr. Bremer, this is the first time you have appeared before 
this committee, and you are asking us to write a $20 billion 
check with no provision for ongoing reporting or oversight. 
Many Americans and members of both parties are now demanding a 
concrete plan and timetable of a transition to Iraqi control. 
Americans want to know if our country is expected to pay the 
full cost of recovery, including war damage, looting, and 
infrastructure damage during Saddam Hussein's regime. Americans 
want to have a realistic, and I think they must have a 
realistic, assessment of potential contributions from our 
allies and understand how we will work with our allies going 
forward.
    Congress is rightfully concerned that by agreeing to this 
request, we are committing the United States for years to come. 
The construction request alone totals more than $15 billion. 
And even with a robust construction sector mobilized in Iraq, 
it would take 5 to 7 years to complete this work. These are 
appropriate and legitimate concerns. Our deficit will exceed 
$500 billion this year. Remember, every dime we provide for 
rebuilding Iraq will be paid for by future generations of 
Americans.
    I strongly believe that Congress must conduct the oversight 
we are responsible for under the Constitution, and I hope that 
the administration will not challenge that duty by claiming or 
delaying resources or undermining our purposes in Iraq. This is 
our constitutional responsibility.
    The request appears to have been assembled with little or 
no input from implementing Federal Government agencies. There 
is little, for example, if any, information about the basis for 
many of the cost estimates used. While you have committed to 
competitive contracting, we have no specific information on 
current or intended contracting procedures, and no information 
about anticipated contract or selection procedures. There is no 
schedule of implementation for most programs, no information 
about amounts expected from other donors, no sense of what 
funds already provided have paid for, and no timetable for 
completion or a phaseout of U.S. involvement.
    In short, I am concerned that this is a request, a wish 
list, without any context.
    Now, while the request is remarkable in its size, what is 
more remarkable is that it appears to have left out some vital 
elements. The request seeks $400 million for new prisons in 
Iraq at an amazing cost of $50,000 per bed, but apparently 
seeks no funding for basic education. There is $4 million 
requested to develop a new set of telephone numbers, but no 
funding requested for local governance or political transition. 
There is $200 million requested for an Iraqi-American 
Enterprise Fund, but no funds requested for food or 
agricultural development. Where programs have been started with 
prior funds, they apparently will be terminated when that 
funding runs out. For example, the oil-for-food program which 
currently feeds over half the country is being phased out, but 
we have no information on what will replace it.
    So, it is this lack of detailed information that upsets 
people and contributes to the call for a clear, comprehensive 
plan and a precise timetable. I am sympathetic, I want you to 
know, to how difficult this demand is. And I recall enduring a 
similar clamor from some colleagues on the other side of the 
aisle during the Kosovo and Bosnia crisis. But implementation 
of all the elements in this request and the seven steps to a 
political transition that you intend to follow commits us to a 
sizeable U.S. presence for at least the next 5 years. So, in my 
judgment, there should be a 5-year plan. When we are asking 
hard-working Americans to sacrifice, they deserve to know how 
great our commitment will be in time, people, and money. So I 
urge you and the administration to share the details of the 
comprehensive plan with us and the knowledge you have gathered 
with the American people.
    The Congress and the American people will have questions, 
but I believe they will support this very important effort. And 
it is my hope today that you will give us the basis for 
appropriating the $20.3 billion, which, frankly, is larger than 
our entire foreign operations allocation for the whole world, 
and it is higher by a few billion. That information is 
essential, because in the next weeks this committee will be 
making scores of critical funding decisions on domestic, 
homeland security and other foreign aid requirements, and we 
need to know the facts.
    Finally, Mr. Chairman, I hope and expect that the 
administration will work with us to fully develop a mechanism 
for necessary oversight of the CPA through the appropriate 
Federal agencies.
    I look forward to your testimonies. And, again, with great 
respect, I thank you for appearing before us.
    Mr. Kolbe. Thank you very much, Ms. Lowey.
    This subcommittee will stand in recess until after the 
second vote. We will resume immediately when the second vote 
starts. Please come back. We have about 4 minutes. I suggest 
you move quickly to the floor.
    [Recess.]
    Mr. Kolbe. The subcommittee will come to order. I know Mr. 
Young has an opening statement, and we will take that as soon 
as he comes back, but let us proceed with the opening 
statements here of General Abizaid and Ambassador Bremer. As 
you know, we have both of your opening statements. They will be 
in the record, and you may summarize them if you choose. And I 
am not sure which is going to go first on this.
    Ambassador Bremer.
    Ambassador Bremer. Thank you, Mr. Chairman. Members of this 
committee, thank you for this opportunity to address the 
Congress and the American people about the President's 
supplemental request.
    Before I begin, I want to pay tribute to the fine young men 
and women in our Armed Forces. Leading a coalition, our Armed 
Forces delivered a military victory without precedent. In 
roughly 3 weeks they liberated a country bigger than Germany 
and Italy combined with an army smaller than the Army of the 
Potomac. Our Armed Forces accomplished all this while absorbing 
and inflicting minimal casualties.
    Mr. Chairman, I know you and other Americans hate to wake 
up in the morning to the news that another American has been 
killed in the Iraq. I lived eight time zones away from you, so 
I hear this news even before you do. And let me tell you, no 
one regrets it any more than I do. But these deaths, painful as 
they are, are not senseless. They are part of the price America 
pays for civilization, for a world that refuses to tolerate 
terrorism and genocide and weapons of mass destruction. Those 
who ambush coalition forces, like those responsible for recent 
terror bombings and those who ambushed Governing Council member 
Aquila al-Hashimi last Saturday, are trying to thwart 
constitutional and democratic government in Iraq. They are 
trying to create an environment of insecurity. Mr. Chairman, 
they may win some battles, but they are losing the war with 
history.
    President Bush's vision, in contrast, provides for an Iraq 
made secure through the efforts of the Iraqis. In addition to 
greater security, the President's plan provides for an Iraqi 
economy based on sound economic principles and bolstered by a 
reliable infrastructure. Finally, the President's plan provides 
for a democratic, sovereign Iraq at the earliest reasonable 
date.
    Mr. Chairman, if we don't provide that kind of Iraq, we run 
the risk of turning Iraq into a haven for terrorists. 
Terrorists love state sponsors, countries that provide them 
with cash, arms, refuge, and planning. Saddam's Iraq was one of 
those countries. The Rome and Vienna massacres in 1985 were 
organized by terrorist Abu Nidal, who lived out his days under 
Saddam's protection. Similarly, Abu Abbas, the architect of the 
Achille Lauro hijacking and the murderer of American citizen 
Leon Klinghofer, lived in Baghdad as an honored guest of 
Saddam.
    Creating a sovereign, democratic, constitutional, and 
prosperous Iraq can deal a blow to terrorists. It can show that 
you can have freedom and dignity without using truck bombs to 
slaughter the innocent. It gives the lie to those who describe 
Americans as enemies of Islam, enemies of Arabs, enemies of the 
poor. That is why the President's request has to be seen as an 
important element in the global war on terrorism.
    Mr. Chairman, in your statement you made reference to the 
lessons of history. If I may, let me tell you my take on the 
lessons of history.
    When we emerged victorious from World War I, many Americans 
had opposed the war, and as a Nation we wished to shake the old 
world dust off our boots and solve our problems at home. We had 
spent and lent a lot of money. The victors celebrated their 
victory, mourned their dead, and demanded the money they were 
owed. We won the war, and we did not consolidate the peace.
    As the American people watched the emergence of Hitler and 
Mussolini, many grew disgusted with Europe and the world. They 
became isolationists, and their plan was simple and simplistic: 
America first. And Hitler came and Mussolini came and Tojo 
came, and the Second World War came.
    While we knew enough to discard the reparations-and-debt 
mantra, it was a full 3 years after Hitler died in his bunker 
before the correct response was articulated by then Secretary 
of State George Marshall. In the Marshall Plan, which was 
introduced in 1948, we embarked on the--the greatest generation 
embarked on the boldest, most generous, and most productive act 
of statesmanship of the past century with the Marshall Plan. 
Winston Churchill called it the most unsordid act in history.
    The Marshall Plan, as you noted, Mr. Chairman, was enacted 
with overwhelming bipartisan support, and it set war-torn 
Europe on the path of freedom and prosperity, freedom and 
prosperity which Europeans enjoy today. After 1,000 years as 
the cockpit of war, Europe became the cradle of peace in two 
short generations.
    The $20 billion in grants to Iraq the President seeks as 
part of this $87 billion supplemental bespeak a grandeur of 
vision equal to that of Marshall.
    Let me make a few points about this request. Several of you 
have mentioned the need for a plan. We do have a plan with 
milestones and specific intervals, milestones for the spending 
of this money and milestones for our overall strategy in Iraq.
    Secondly, no one part of this supplemental is dispensable, 
and no part is more important than the others. It is a 
carefully considered, integrated request.
    Thirdly, this request is urgent. The urgency of dealing 
with military operations is self-evident, but the funds for 
nonmilitary action are equally urgent.
    Most Iraqis welcomed us as liberators. Now the reality of 
foreign troops on the street is beginning to chafe, and some 
Iraqis are beginning to regard us as occupiers and not 
liberators. This was perhaps inevitable, but faster progress 
and reconstruction will help.
    Unless this supplemental passes quickly, Mr. Chairman, 
Iraqis face an indefinite period of blackouts 8 hours a day. 
The link to our safety, the safety of our troops, is real if 
indirect. We need to emulate the military practice of using 
overwhelming force in the beginning. Incrementalism and gradual 
escalation will not work. This money will be spent with prudent 
transparency, a subject I know is of concern to this committee. 
Every contract of the $20 billion for Iraq will be 
competitively bid.
    The money needs to be granted and not loaned. Initially 
offering assistance as loans seems attractive, but once again, 
Mr. Chairman, we need to examine the facts in historical 
context. Iraq today has almost $200 billion in debt which it 
cannot repay. These hang over it as a result of Saddam's 
economic incompetence and aggressive wars, and Iraq is in no 
position to pay this existing debt, let alone more debt. 
Mountains of unpayable debt contributed heavily to the 
instability that paved Hitler's path to power. We should not 
repeat that experience.
    The President's first priority in this supplemental is 
security, security provided by Iraqis and to Iraqis. He seeks 
$5.1 billion for three elements of security, which are outlined 
in the request. The first pillar is public safety. We would 
spend just over $2 billion for police and police training and 
related matters if the supplemental is approved. Already, 
40,000 police are on duty, and our plan will double that number 
in 18 months.
    The second pillar is national defense. We seek another $2 
billion in this request to build a new three-division Iraqi 
Army and Civil Defense Corps. The first battalion of the Army 
will graduate on schedule October 4th, and by next summer, if 
the supplemental is approved, we will have 27 battalions 
trained.
    The third pillar is a justice system to rein in the 
criminal gangs and revenge seekers, the murderers, rapists, and 
kidnappers who Saddam Hussein let loose from prison last year.
    Mr. Chairman, the security assistance helps the United 
States in four direct ways. First, Iraqis will be more 
effective at finding the criminals than we are. As talented and 
courageous as coalition forces are, they can never replace an 
Iraqi who knows his beat, knows his people, their customs, 
rhythms and languages. Iraqis want Iraqis providing their 
security, and so do we.
    Secondly, as Iraq security forces assume their duties, they 
replace coalition troops in roles that generate frustration, 
friction, and resentment, conducting searches, manning 
checkpoints, guarding installation.
    Third, this frees up coalition forces for the mobile 
sophisticated offensive operations that they are so good at.
    And, finally, these new Iraqi forces reduce the overall 
security demands on coalition forces and speed the day we can 
bring our troops home.
    Security is the first and indispensable element of the 
President's plan, but it is not by itself enough to assure 
success. A good security system cannot persist on the knife 
edge of economic collapse. When Saddam scurried away from 
coalition forces, he left behind an economy that was ruined not 
by our attacks, but by decades of economic mismanagement. There 
was a substantial underinvestment across the economy in all 
areas of infrastructure. Much is made of the underinvestment in 
electric power, and that is a major element of this 
supplemental. Saddam left also a Soviet-style command economy, 
a model that was made worse by cronyism, theft, and pharonic 
self-indulgence by Saddam and his intimates.
    Important changes are under way. You may have read that the 
Minister of Finance announced a bold series of economic 
policies in Dubai on Sunday, including the region's most open 
foreign direct investment law, the independence of a central 
bank, and the simplification of a tariff regime. On October 
15th, Iraq will get a new currency.
    These progrowth policies should bring real sustained growth 
and protect against something we have all seen and regretted, 
economic assistance funds disappearing into a morass of 
poverty.
    The way I look at it, the Iraqi Government has put into 
place the legal infrastructure that is necessary for good 
economic growth; but that growth cannot happen if Iraq has to 
reestablish itself with an unreliable electrical grid or an 
unreliable security environment.
    We have made significant progress in restoring these 
essential services, Mr. Chairman, but much more needs to be 
done, and that is why the President is requesting almost $15 
billion for infrastructure.
    You and the members of the committee know the main elements 
of the supplemental. Let me just quickly repeat them: About 
$5.7 billion for the electrical system; a little over $2 
billion for oil infrastructure; 3.7 for potable water and sewer 
system--the Chairman mentioned the lack of sewage system 
throughout the country--and water resources.
    The final area is moving forward on political reform, and 
here, Mr. Chairman, there is good news. We have encouraged a 
quick political transformation and transfer as fast as is 
reasonably responsible of sovereignty to the Iraqi people. 
Three of the seven steps necessary for this transformation have 
already been taken. You mentioned the Governing Council which 
took office on July 13th.
    In early August, the Council took the second step by 
appointing a preparatory committee for the Constitution. The 
third step was the appointment of 25 ministers to run the Iraqi 
Government 2 weeks ago.
    Four steps remain along the path: Convening the 
constitutional conference and writing the Constitution; next, 
getting that Constitution ratified by the Iraqi people; sixth, 
holding free democratic elections; and, finally, the transfer 
of sovereignty from the Coalition Provisional Authority to a 
sovereign Iraqi Government.
    There has been some pressure from some of our friends and 
some members of the Governing Council to shortstop and short-
circuit this process. Mr. Chairman, I think that would be a 
mistake. This is a government that has been under a 
totalitarian regime for almost four decades, and we need to be 
sure that they put in place the proper political and 
constitutional framework before we move to sovereignty.
    Every part of this plan, Mr. Chairman, depends on every 
other part. This is an integrated request, and it requires the 
help of the American Congress. Taking the lead, the United 
States can help restore Iraq as a democratic model not only for 
the Iraqi people, but for the people of the region. We cannot 
simply pat the Iraqis on the back, tell them they are lucky to 
be rid of Saddam, and then ask them to go find their place in a 
global market. To do so would be to invite economic collapse 
followed by political extremism or terrorism. Not only will we 
have left the long-suffering Iraqi people to a future of danger 
and deprivation, we will have sewn the dragon's teeth which 
will sprout more terrorists and eventually cost more American 
lives.
    Make no mistake, Mr. Chairman, these funds represent an 
investment in American national security, as Congresswoman 
Lowey pointed out in her opening statement.
    Mr. Chairman, members of the committee, we respectfully ask 
Congress to honor the President's request which responds to the 
urgent requirements to achieve the vision of a sovereign, 
stable, prosperous, and democratic Iraq, at peace with its 
neighbors. And as you said, Mr. Chairman, in your opening 
remarks, I do not believe this should be seen as a partisan 
issue. Like the Marshall Plan, it is important that all of the 
American people understand what is at stake in Iraq and support 
this request. I look forward to your questions.
    Mr. Kolbe. Thank you very much, Ambassador Bremer.
    [Ambassador Bremer's written statement follows:]

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    Mr. Kolbe. General Abizaid, we will ask you for your 
opening statement. And following that, I will call on Chairman 
Young and Mr. Obey for their statements.
    General Abizaid. Well, thank you very much, Mr. Chairman. 
It is an honor to be here.
    I know that all of you know that there are over 200,000 of 
our sons and daughters that serve in the Central Command's 
areas of operations. They do an absolutely outstanding job 
protecting our country. They serve in the East from Kyrgyzstan 
and the West to the Horn of Africa. Foremost among the missions 
that they have and the very, very difficult missions that they 
have is bringing stability to places like Afghanistan and Iraq. 
These are very, very difficult missions, they are very 
challenging missions, and they are very dangerous missions, but 
they are up to the task. We need to give them the tools to win, 
and I would ask you to support this supplemental. Thank you, 
sir.
    Mr. Kolbe. Thank you very much. Your full statement, of 
course, will be placed in the record.
    [General Abizaid's written statement follows:]

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    Mr. Kolbe. I would like to call on Chairman Young for some 
opening remarks.

                   Chairman Young's Opening Statement

    Mr. Young. Mr. Chairman, thank you very much. And 
personally, I want to thank Ambassador and the general for 
being here today. It is important that we vet the issues before 
us. I believe, having been counting votes on appropriations 
bills for a long time, I am satisfied we are going to pass this 
supplemental without too much difficulty, but I think it will 
serve the President well and the Congress if we know as much 
about it as we can so that our constituents back in our 
districts understand where we are, where we are headed, and 
what it is going to take to get there.
    I would tell you that it is important that we finish this 
mission. I just want to emphasize that. You have made the 
points very thoroughly. And it is very important that we 
protect our troops who are there to carry out this mission, and 
they should be provided whatever is required.
    I would say to the general that I am a little distressed as 
I visit with the wounded soldiers and marines who come back 
from Iraq, Afghanistan, and now Liberia with malaria. One story 
that I heard and I really found hard to believe, that a lot of 
our kids were there without body armour, and some who had the 
vests didn't have the plates to go into the vests. I talked to 
General Schoomaker about that. He said, if that is true, he is 
going to fix it, and I think that is important.
    But that is just an aside. It is important that we get this 
bill passed quickly. I understand that in some cases you have 
actually run out of money or are about to within a few days. So 
the question that you would have is how soon can you expect 
this bill to be passed? And I will tell you that this hearing 
today is the first of our hearings. Chairman Lewis, who was 
here, and you met with he and his subcommittee earlier today, 
will leave this weekend to go to Iraq, and when they return, we 
will determine whether or not they need to hold a hearing. And, 
as Mr. Kolbe said, that next week there will be another hearing 
with Secretary Armitage and others. It is my intent then to 
assimilate the information that we develop and take this bill 
straight to the full committee and save the time of going 
through each of the subcommittee markups so that we can have a 
responsible piece of legislation that we can put on the floor 
quickly; probably not as quick as some would like, but maybe 
quicker than some would expect. We are going to move it 
quickly.
    But we do need to know--there are going to be some tough 
questions here, and you should not feel that those questions 
indicate a lack of support, because that is not the case. But 
there will be some tough questions, and it is just so that we 
are able to perform our constitutional role as providing 
oversight for appropriations.
    There is one thing that I would like to mention. There is a 
lot of things I would like to mention, but I am not going to 
use up the chairman's time here. When I hear you talking about 
a reconstruction and rebuilding, I think it is important that 
we make the case that we didn't destroy this infrastructure. We 
are not rebuilding or reconstructing something that we damaged 
or that we destroyed. We are working to build an infrastructure 
for the people of Iraq that Saddam Hussein destroyed and 
allowed to deteriorate over these many, many years. And when 
the world, or at least some of the world, goes to the donor 
conference next month in October, I think that point should be 
made very strongly; that we didn't destroy Iraq's 
infrastructure, but we are willing to help build it back so 
that the Iraqi people can have a decent standard of living.
    You all have a tough job, and I want to be here in support 
of what it is that you have to do. I want to support the 
President. I know that when he moved out on this mission, he 
felt like the United Nations had voted to condemn Saddam and 
everything that Saddam was doing, but when it came to walking 
the walk, the U.N. sort of backed out on us, and we found 
ourselves going it alone, and that is not always easy. But I 
applaud the President for being willing to recognize this 
blight, especially on the free world, and be willing to do 
something about it.
    And, you know, we passed the defense appropriations bill 
today, and we also passed the Homeland Security appropriation 
bill. The way I see it, what we are doing in Iraq, what you are 
doing in Iraq to make this a peaceful nation that will not be a 
threat to anyone, is a very important part of our own homeland 
security, because if we don't stop the aggressor or the would-
be threat to our own interests--and we are talking today about 
terrorism and the real association that Saddam had with 
terrorists and al Qaeda--we are not doing everything we could 
to protect our own homeland.
    And so you will find us to be good allies. You will also 
find us to be penetrating in our questions in trying to 
determine answers to questions that we have so that we can go 
to our constituents and to the country and know that we are 
doing our oversight job as required by the Constitution.
    Mr. Chairman, thank you very much.
    Mr. Kolbe. Thank you, Mr. Chairman, for your participation 
and, as always, thoughtful comments.
    Mr. Obey.

                      Mr. Obey's Opening Statement

    Mr. Obey. Mr. Chairman, this request is by far the largest 
supplemental request in the history of the Republic. It amounts 
to more than $1,000 for every working-age family in America, 
and it is much larger than all but three of our regular 
appropriations bills. It is, in fact, nearly as large as 7 of 
the 13 bills that we pass each year. It is more money in 
unadjusted dollar terms than the entire defense budget during 
any year of the Vietnam War. The Iraq economic reconstruction 
portion of this package alone is more than 20 percent larger 
than the regular foreign operations bill produced by the 
subcommittee only a few months ago.
    Because we had allies who were part of the take-off and 
helped pay the bills, the first Iraqi War cost us less than $8 
billion. This ``my way or the highway'' operation has already 
cost us far more than $60 billion, and we are now being asked 
to spend $87 billion more. Going it alone is expensive. But 
this hearing is also important because it is an opportunity to 
try to rebuild a consensus about our policy in Iraq, at least 
domestically, even if the prospects of doing that 
internationally are fairly dim.
    I voted against unilateral invasion. I did not believe that 
the administration had produced sufficient evidence of an 
imminent threat to the United States. And the President himself 
has finally admitted that we had no evidence of Saddam's 
involvement in 9/11. That is a direct quote.
    I also believe that the greatest problem posed by an 
invasion of Iraq was the prospect that we would gain control or 
at least nominal control of a country that neither ourselves 
nor anyone else could afterwards govern. That concern appears 
to have been all too well placed.
    But this request is not about whether the war was a good 
idea or not. I recognize that the reality of our current 
situation is that Iraq under Saddam may not have posed an 
imminent threat to the United States, but what ultimately 
replaces Saddam could be highly problematic to our interests 
and even our security.
    Prior to the U.S. invasion, there were probably fewer 
terrorists plotting against the United States from Iraq than 
from most other countries in the region such as Iran, Saudi 
Arabia, Yemen, Syria, and Pakistan. That situation has changed 
dramatically. While Iraq is not currently a safe haven for 
anyone, it has certainly become a haven for precisely the 
individuals and organizations that do target our country.
    Further, the failure of the United States to install a 
stable government after the bloodshed that resulted from the 
invasion would create an environment throughout the Arab and 
Muslim worlds that would be highly conducive to organizing 
further attacks against the U.S. If an unfriendly government 
emerges, we face the prospect of an oil-rich country with a 
government interested in pursuing a nuclear program and no 
international sanctions to hinder that interest.
    So the stakes here are obviously huge, but that does not 
mean that I will automatically support this request. We have a 
responsibility to the American people and to the troops in the 
field to provide those funds that are necessary to protect the 
lives of American servicemen and to effectively accomplish the 
difficult mission before us, but the ugly truth is that the $87 
billion in this request is no more than a down payment. Even 
the most optimistic estimates about security, political 
stabilization, oil production and prices, reconstruction and 
economic recovery will produce more requests from the 
administration for additional amounts of U.S. taxpayer money to 
pay for this operation.
    The question today is whether the administration can 
demonstrate that it has a carefully developed plan of action 
that will turn the situation in Iraq around, that it has 
cleansed itself of the mentality that got us into this mess, 
and that it is capable of explaining in detail what money is 
needed and why it is needed, and that there is a reasonable 
chance that the overall plan will succeed. We cannot afford a 
flawed product that will not offer a reasonable prospect for 
success or does not carefully target funds toward the highest 
priority needs.
    And, last, we ought to pay for as much of this request as 
possible. Ambassador Bremer referred in his statement, and we 
have heard several other references, to Harry Truman and the 
Marshall Plan. I would submit that the difference between Harry 
Truman and this administration is that Harry Truman paid his 
bills. Harry Truman was the last President to balance the 
budget over his full term of office. That is quite a contrast 
to the existing administration.
    I would also say that there is another difference. The 
Marshall Plan was never popular. If you go back and look at the 
public opinion polls, it was never popular with the American 
people. But it was one of those foreign policy grace notes that 
the public allowed the President to pursue because the American 
people knew that good old Harry was taking care of the problems 
at home, and that also is a very big difference between then 
and now.
    And so I would submit that if this package is in trouble 
with the public, it is in trouble precisely because they see 
such a difference between the way Harry Truman took care of the 
problems at home as well as abroad versus the economic neglect 
that we face in this country now in comparison to the funds 
that are being requested for Iraq. Every dime that we spend in 
Iraq will be financed with debt, and that will be passed on to 
our children and will prevent us from making needed investments 
in education and health care here at home unless we find a way 
to pay for it now.
    If we are serious people, we cannot avoid tough choices. If 
it is truly important for us to spend this money for this 
mission in Iraq, the money that the administration has 
requested, then this President and this Congress must face the 
fact that we cannot afford to continue to provide $88,000 tax 
cuts for people who make over $1 million a year. We must 
rethink our actions on taxes in light of these new 
circumstances.
    Now, I expect this hearing to be a rocky one at times. I 
hope the two gentlemen before us today understand that we know 
that they are fine career servants of the American people. One 
is a diplomat, the other is a warfighter. They represent the 
very best that this Nation produces. We do not want to find 
ourselves shooting the messengers, but this hearing today will 
be conducted in large part in the wake of huge miscalculations, 
and our problem is that the people who are at the witness table 
today are not those who are responsible for those 
miscalculations; they reside in the civilian leadership at the 
Pentagon and will not be answering these questions today. I 
find it highly ironic that the administration that has so 
frequently ignored the counsel of top-notch career State 
Department and military personnel would now be relying on two 
of the very best of them to make their case on Capitol Hill.
    Gentlemen, I welcome you. I know you both have tough jobs 
to do. We don't unless we do ours right, and I hope we do.
    Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Mr. Obey.
    All right. We are going to go to questions and answers. And 
let me explain the ground rules. At the request of the 
Minority, we are going to go for a little longer time. It is 
going to be 8 minutes per person. I have a timer up here which 
will beep at the end of each 8-minute segment here. We will be 
absolutely rigid, including myself, on the time because we have 
to allow enough time for everybody to get in a round of 
questioning. I know that Ambassador Bremer has to leave by 5 
o'clock or a few moments thereafter, so we will be quite strict 
about timing. I will allow you to finish your sentence; but if 
you are asking a question, there may not be time for an answer 
for that question. And similarly, the witness will be asked to 
finish at the end of that sentence.
    We really have to follow these rules if we are going to 
allow everybody to have a chance. You can control your own time 
if you are getting a long answer from somebody, from one of the 
two out there that are testifying; you can cut them off and 
say, let us move on with the question here to the next part of 
it.
    And I don't think we will have time for more than one round 
of questioning here. And, as usual, we will take it on the 
order of the people arrived. After we do the Chairman and 
Ranking Members, we will do it on the order the people arrived 
from the moment we struck the gavel.
    And, with that, start the timer for me here.
    I want to start with General Abizaid. General, there has 
been some that have suggested that we should separate the 
amount of the money that is in here: Part for defense and part 
for reconstruction. I think there are others that obviously 
feel that this would be a serious mistake. Can you tell us, as 
the commanding general at CENTCOM, how important are the 
dollars that we are spending on reconstruction and to bring 
about Government in Iraq, and to the security of your forces 
there?
    General Abizaid. Thank you, Mr. Chairman. I believe that 
they are inextricably linked. And I think it is safe to say to 
the committee that--and they realize that there is no strictly 
military solution of the problems that we face in my area. It 
requires that we move together on the political front, on the 
economic front, on the reconstruction front in a manner that is 
synchronized and coordinated. If we don't do that, I do not 
believe we can be successful. So you can pay the military to 
stay there, but you are only paying us to stay forever.
    You have to, in my mind, fund the reconstruction, in 
particular the security portions of the reconstruction. But I 
am sure Ambassador Bremer can give you plenty of reasons why we 
need to fund all of it as well.
    So I think they are inextricably linked. I do not believe 
that General Sanchez can win the war in Iraq. Ambassador Bremer 
can. And he needs everything brought together in a unified 
package.
    Mr. Kolbe. Thank you.
    Ambassador Bremer, I am going to go to you next. But would 
you like to add a comment, a quick comment.
    Ambassador Bremer. I would just agree with General Abizaid. 
As I said in my opening statement, this is an integrated 
package; it all fits together.
    Mr. Kolbe. Thank you.
    Ambassador Bremer, I want to ask you, it is really not so 
much a question as a statement, and I would like to see whether 
you agree with this. Just so I would put this in the context of 
what we are requesting, the $20.3 billion that is in here for 
reconstruction, as I understand it, this is to cover 
reconstruction in Iraq over the next 15 months of 
reconstruction expenses, basically the remainder of calendar 
2003 and all of calendar year 2004. Reconstruction costs will 
be reflected in the President's regular fiscal year 2005 budget 
request that we would receive as normally in February. And the 
appropriated funds that we have here are not paying for the 
regular Iraqi budget expenses that would be covered by oil 
sales and future donations from other countries. Is that 
essentially an accurate statement?
    Ambassador Bremer. Correct on all counts.
    Mr. Kolbe. Thank you. Then I don't need to go any further 
with that one.
    Ambassador, this is a big question, and I think also 
extremely important for all of us here. When we did the last 
supplemental, the Coalition Provisional Authority did not 
exist, and we provided $2.5 billion for Iraqi relief and 
reconstruction from the ERF, as it is called, funds that were 
apportioned to other agencies and your organization. CPA is 
not, as you know, an authorized--doesn't exist in law, and as 
far as I know, there is no Executive Order that creates it.
    My basic question is what are the legal authorities, as you 
understand them, under which you and the people in your team 
operate? What are the legal authorities that you have for 
contracting, for personnel, for hiring, for firing? What is 
your understanding of that?
    Ambassador Bremer. I do not do any contracting, Mr. 
Chairman. I don't know what the form is in which I was 
appointed by the President, whether it is technically an 
Executive Order or--it was signed by the President, so I guess 
it is an Executive Order. But I am not an attorney, so I don't 
want to be caught up on that.
    When the President appointed me, he gave me authority over 
all U.S. personnel and resources, civilian and military, in 
Iraq except those serving under the command of a theater 
commander, which is a standard statement of authority that is 
reflected in the law for most ambassadors--for all ambassadors, 
for all Presidential ambassadors. That is my authority.
    Mr. Kolbe. Contracting then is done by--well, where does 
your paycheck come from, if I might ask?
    Ambassador Bremer. My paycheck comes from the Pentagon.
    Mr. Kolbe. From the Pentagon. From the U.S. Army.
    Ambassador Bremer. As an executive agent.
    Mr. Kolbe. That is correct. And, in fact, there is a line 
in this supplemental for all the overhead and operating 
expenses of the CPA; Is that correct? It is in the Army's 
personnel.
    Ambassador Bremer. That is correct.
    Mr. Kolbe. Okay. So contracting then is done by the 
different agencies to whom the money is assigned?
    Ambassador Bremer. Yes. And I would say here, Mr. Chairman, 
because I know it is of concern to the committee, my intention 
is to work closely with OMB to be sure that any appropriated 
funds are apportioned quickly to the appropriate implementing 
agency. And I intend to look at the capabilities of all U.S. 
executive agents, whoever may be the most appropriate one, AID, 
State Department, Justice, the Army, whoever it is, those 
people who have contracting authority. And the money will be 
expended, as I said in my opening statement, through an open, 
transparent process.
    Mr. Kolbe. Ambassador, that leads me then into my next 
question, which I hope I can get one more in. There is a lot of 
money in here for construction of infrastructure and facility 
projects, $5.675 billion for electricity, $875 million for 
water resources, on and on. Can you tell us, what are the roles 
and the missions of the various Federal agencies in executing 
this plan?
    What is going to be carried out by USAID, Corps of 
Engineers?
    I mean, yesterday we heard in our staff briefing from your 
staff that a certain amount is going to be taken over by USAID. 
How is that decided, how much are going to take over on the 
electricity, for example?
    Ambassador Bremer.  Well, let me state the general point, 
and then I'll answer that.
    I am going to set up a project management office which is 
going to oversee all of these, because it is a lot of money. We 
have already got a contracting office setup with, I think it is 
15 contractors there. We're going to have 19 auditors in place 
already from the Defense Contracting Agency, so we are watching 
the money carefully. It will be on a case-by-case basis.
    I understand, as we put this supplemental together, 
officials from AID expressed interest in some parts of this, 
and we will obviously then look to them to carry out those. I 
think they are, sir; they expressed an interest in something 
like $700 million worth of the electric power projects that are 
in here. I expect those would go to AID, but I am going to try 
to keep an open mind and instruct my project management office 
to keep an open mind, and we will use that obviously, working 
with OMB and through the OMB with the committee on the 
apportionment.
    Mr. Kolbe. One more follow-up, and this will be the last 
question. It is very important because it has to do with some 
of the provisions of our legislation which would require some 
reporting. And I don't think you would object to some reporting 
so you would be able to see how the progress is coming.
    Are you going to be able to give us some specific 
benchmarks, some metrics, some milestones, some things?
    Ambassador Bremer.  Yes, sir.
    Mr. Kolbe. How are we going to measure the success? Just 
take one thing. Electricity, are you going to measure in number 
of megawatts, number of homes that have hookups, meters that 
are on?
    What are going to be the measurements?
    Ambassador Bremer.  Well, we do have, and we will provide 
to the committee those metrics on each of these major events.
    We are going to look for megawatts, in the case of 
electricity. In most cases, we have targets over the next 2 
years for megawatts generated, but each project will have, 
obviously, milestones, what happens in 6 months, what takes 9 
months, what happens in 10 months.
    Mr. Kolbe. Thank you, and we will be looking to have those 
very closely on hand when we get started. And I am yielding 
back 5 seconds.
    Mrs. Lowey. Thank you very much, Mr. Chairman. I would like 
to focus for a moment on the public safety sector.
    One of the frustrations that we are having with this 
request, Ambassador Bremer, is trying to gain some 
understanding of how these cost estimates were put together and 
precisely what the American people are getting for this $20 
billion. One example I want to cite is the $800 million 
requested for international police training. Material you have 
provided indicates that this will pay for 500 field training 
offices, which translates into a cost of $530,000 per trainer.
    In my statement, I cited the $400 million requested for two 
new prisons at a cost of $50,000 per bed. Other information 
indicates that it costs $200,000 per man to field consultants 
in the security area. I would like to ask you three specific 
questions following up, and then whatever time you have I would 
appreciate it if you can submit it in writing.
    Does it cost $530,000 to field each international police 
trainer? How much does that pay for? How long will it be 
deployed? What can we expect of an Iraq police force and when 
can we expect an Iraq police force to be in a position to fully 
assume all police functions in the country?
    And what assumptions have gone into the $400 million 
requested for two new prisons at 50,000 per bed? Are we paying 
a premium for this work? Are the designs for maximum security 
something less?
    There are $200 million requested for security programs for 
a court system of Iraq, which includes protection of 400 judges 
and prosecutors at a cost of $50,000 per person, and hardening 
and X-ray machine installation for 130 courthouses at a cost of 
$1.3 million per courthouse. While I do not question the need 
for this, I wonder, are these judges in place today? What are 
their salaries? How will security details be handled, given the 
shortage of trained security personnel? And why is it necessary 
to harden all 130 courthouses?
    Now, in my opening statement, Ambassador Bremer, obviously 
we talked about many general goals. I cite these specific 
examples not because I expect you to be able to give me all the 
details today, but as you know, as the overall administrator, I 
do believe you have a responsibility to come to us with 
specifics; and when we see items like this, it really raises my 
eyebrows and causes me great concern. And I would be most 
appreciative, the extent to which you could respond to or 
follow up with some other explanation.
    Ambassador Bremer.  Okay, thank you. Those are perfectly 
reasonable questions. Let me answer them to the degree I can 
without commanding all the details in the case.
    In the case of the police, let me just give the broad 
picture. We have 40,000 police now on duty. They are basically 
police from the old regime; they therefore are really not 
adequate. We are putting each of them through a 3-week 
refresher training course in human rights and trying to teach 
them how to do standard investigative practices, which they did 
not have. We need to double the size of that force to 80,000.
    The 800 million here basically gets us from the 40 to 
800,000--sorry, from the 40- to the 80,000. This about a year-
and-a-half. It is very expensive. It is extremely expensive. We 
are hoping--we have been able to shorten it and reduce the 
number of trainers by working with the Jordanians to do much of 
the training in Jordan, but the police trainers are expensive.
    Mrs. Lowey. $530,000 for police training?
    Ambassador Bremer.  Well, there's more in there than that, 
I can't go through all of the detail. I think the cost of the 
trainers is more than a couple 100,000, but that is a loaded 
cost--salary plus, obviously, logistics and so forth.
     It is absolutely essential that we get a competent police 
force; and in the long run, Iraq security, like the security of 
any country, depends on a good police force--doesn't depend on 
an army, shouldn't depend on an army. Armies are not for 
internal security; it depends on a police force.
    This is an urgent, very important thing. It is very 
expensive.
    Mrs. Lowey. Let me say, Mr. Ambassador, I understand the 
concerns and I understand the urgency, but I personally, given 
our oversight responsibility, would be most appreciative for 
some understanding of how these numbers are computed. It almost 
looks to us as they were thrown into a box and pulled out.
    Ambassador Bremer.  No.
    Mrs. Lowey. Because the cost is so great. And how many more 
minutes?
    Three minutes.
    Because my time is so limited, perhaps you can respond to 
us and you can respond to us in detail.
    And let me deal with another area, security forces. In my 
review of the plans that were submitted to us, the plan calls 
for establishment and training of a myriad of at least 10 
separate security-related forces at a cost of over $4 billion. 
We have the plans--we have the obvious plan for a new army and 
police force, but we also have plans for a separate security 
force to guard oil facilities, traffic, customs, border police. 
They are all separate organizations, according to the plan. 
Fire, civil defense, these are all separate organizations.
    Now, a separate group will do security for the electricity 
commission. We not only have requests to hire and train all 
these forces separately, we also have a request of $274 million 
to build three new public safety academies to consolidate their 
training.
    Ambassador Bremer. Correct.
    Mrs. Lowey. Now, was any thought given to consolidating the 
security forces, similar to our own Homeland Security 
Department, in order to speed training and save money?
    When do you anticipate that the three new public safety 
academies will be functioning, when can we expect any one of 
these 10 new security forces to be functional?
    Ambassador Bremer. Yes, we did consider that. Most of these 
forces, in fact, are under one single command, which is the 
ministry of interior, so it is as if they are free floating. 
None of them are under one ministry. I am trying to look to see 
when the actual new facilities are supposed to be up and ready.
    The first--of course, the military is already under way, 
the army, as I said; the first battalion will graduate October 
4. The other--the other training is already under way for the 
police--as I said, the refresher training.
    We already have hired some of the facilities' protection 
services. The oil ministry has--is paying for some oil police 
out of its 2003 ongoing budgets, and the same is true for the 
electricity ministry, so some of these forces are already in 
being.
    The Iraq civil defense corps is already being recruited.
    We have four battalions already?
    General Abizaid. Four.
    Mrs. Lowey. Mr. Ambassador, I am not questioning the goals 
and I am not questioning the plan. I am questioning, and I 
think we have a responsibility to request a justification for 
those extraordinary numbers.
    Twenty-eight seconds left.
    Telephone numbers I referred to. It includes $4,000,000 to 
develop a nationwide numbering system and a 911 emergency 
response system. Why would it cost $4,000,000 to develop a new 
system of telephone numbers?
    I only have 11 seconds left, and I want to explain to you 
again how much I appreciate your courage and that of the 
General in coming before this committee. But we have the 
responsibility, and I would hope that those who have the 
specific information could respond to us in detail.
    Thank you very much.
    Mr. Kolbe. Thank you, Mrs. Lowey.
    Chairman Young.
    Mr. Young. Thank you, Mr. Chairman.
    Mr. Ambassador, Iraq has a lot of wealth, a lot of natural 
resources. They also have a lot of debt. I am not sure whether 
their resources are paying off that debt.
    Is there any plan that any of the funds in this $87 billion 
request would be used to pay off Iraq's debt to other nations?
    Ambassador Bremer. No.
    Mr. Young. Would there be any objection if we had a line in 
there that said that none of the funds could be used to repay 
Iraq's debt?
    Ambassador Bremer. I certainly wouldn't object.
    Mr. Young. I want to talk to you about Ahmad Chalabi. If it 
is politically sensitive, that's okay, don't respond. But we 
have--here is a fellow that we have nurtured and kept for years 
as an Iraqi opponent of Saddam Hussein, while he enjoyed life 
in the United States, and I believe maybe the Department of 
Defense more so. You weren't involved there at this point, but 
maybe the Department of Defense has something to do with 
Chalabi being put in an important role in Iraq after the war 
was declared to be completed.
    But now it seems like he is no longer one of us. He seems 
to be one of them now, and it appears to me that he is 
supporting moving the U.S. interests out quickly so that there 
can be a new government in Iraq, which I expect that he intends 
to head.
    Can you--can you tell us where--where Chalabi is, why he is 
there, what effect he is having on what you're trying to do?
    Ambassador Bremer. Well, I met Dr. Chalabi only after I 
moved to Iraq myself, of course. I had never met him before. He 
is a respected member of the Governing Council. As it appears, 
the Governing Council has a rotating chairmanship, and he is 
chairman of the Governing Council this month which is why he is 
leading the delegation to the United Nations.
    These days, as you said, he has called for a very quick 
turnover of sovereignty to the Governing Council. As I 
mentioned in my opening statement and I have said publicly, we 
do not agree with that. The President's program is quite clear. 
There has to be a constitutional process, and again I think for 
most Americans it is pretty clear that you don't rush to 
elections before you have a constitution nor, in my view, is it 
appropriate to turn over to a nonelected body, which is what 
the Governing Council is, responsibility for appropriated 
funds.
    He also wants to spend the $20 billion, and I frankly don't 
think that is right.
    Mr. Young. What role--regardless of who is chairman this 
month or next month, what role would the Governing Council have 
in making those decisions?
    Ambassador Bremer. On--on the constitution? You mean the 
political decisions?
    Mr. Young. On the creation of a government.
    Ambassador Bremer. Yeah.
    Well, they will have a very important role because they 
have the responsibility now--we have given them the 
responsibility to convene a constitutional conference or a 
constitutional convention to write the constitution. They are 
expecting a report from their preparatory committee next week 
on the alternatives of how to go about doing that, and they 
will then have to decide how to convene that convention.
    Mr. Young. Mr. Ambassador, some have suggested that this 
whole effort on the part of the United States was to get 
control of Iraq's oil. I don't believe that. I believe that the 
President's motives were very genuine.
    Would you--will you comment on that, what is happening with 
those?
    Ambassador Bremer. Well, I heard that allegation and I 
simply reject it. In fact, we have been meticulous in 
respecting the Iraqi people's desires to control their oil, 
their oil resources. Every single dollar that comes from oil 
revenues today in Iraq goes to the Iraqi people.
    When they passed this new foreign direct investment law 
that I referred to in my opening statement, the Iraqi Governing 
Council and minister of oil excluded natural resources from an 
area that is open to foreign investment, and we said, That is 
fine; that is your national right to do that. And we are 
perfectly comfortable with that.
    Mr. Young. Mr. Ambassador, thank you very much.
    General Abizaid, thank you very much for the very important 
role that you played during the, quote, ``war,'' unquote, and 
postwar. We appreciate both of you very much and have just 
great confidence in, if anybody can get this job done, that you 
guys can lead it.
    Mr. Chairman, thank you.
    Mr. Kolbe. Thank you very much, Chairman Young.
    Mr. Obey.
    Mr. Obey. Thank you very much.
    I would like to follow up on Chairman Young's questions 
about Mr. Chalabi, Ambassador Bremer. It would be my judgment 
that you will have great difficulty being able to reconstruct 
Iraq until you get control of the security situation and that 
you will have difficulty getting control of the situation, the 
security situation, if all of the ethnic and religious elements 
of the country are not reasonably comfortable with the 
political framework in which they are all being placed.
    I would think that would, in particular, apply to the Arab 
Sunnis.
    Chairman Young has referred to Mr. Chalabi, and I have a 
lot of questions about him and his ability to work with all 
peoples, but let me ask a simple question: Why was Mr. Chalabi 
appointed to the Governing Council in the first place since he 
hadn't lived in the country since the late-1950s and 
represented nobody, as far as I can determine?
    Ambassador Bremer. Well, Congressman, without going into 
detail on particular people, the Governing Council is made up 
of 25 men and women of whom 11 did not live in Iraq during 
Saddam's time.
    Mr. Obey. Because of the time limit, let's confine it to 
Mr. Chalabi. Why was he appointed?
    Ambassador Bremer. Dr. Chalabi represented a party with 
significant experience in Iraq in the resistance, as was the 
case with many of the other people who had not lived in Iraq. 
There is nothing--what I am trying to say is, it is not 
surprising that he was appointed.
    Many people, 10 others, did not live in Iraq.
    Mr. Obey. Did any of the political appointees at the 
Pentagon discuss his appointment with you prior to your 
decision to place him on the council?
    Ambassador Bremer. No. No, sir.
    Mr. Obey. None whatsoever?
    Ambassador Bremer. No.
    Mr. Obey. The Jordanians, who are consistently our 
strongest allies in the Arab world, say this man is a crook and 
a charlatan. The CIA has been implying that for years, 
certainly privately, if not publicly, and so have several 
people at State.
    I have great difficulty understanding why, if we are trying 
to win the hearts and minds of people in that part of the world 
we would appoint someone to that council with that reputation.
    Let me ask you another question. Has Dr. Chalabi--or any 
business he owns or any of his family members, have they in any 
way received any contracts in Iraq or any payments of any kind?
    Ambassador Bremer. Not to my knowledge.
    Mr. Obey. Are we certain of that?
    Ambassador Bremer. I am certain of it. I don't--you know, I 
can't tell whether there may be companies owned by some cousin 
somewhere, but to my knowledge, none at all.
    Mr. Obey. Thank you.
    Cost, I hate to legislate on the basis of loss leader 
principles. I like to know that we are not just making a down 
payment.
    Can you tell us what is your best professional estimate, 
and I would like this from the General as well--assuming that 
the administration gets its way on the timetable and other 
issues--what is your best professional estimate of how much we 
will be asked to appropriate over the next 5 years above and 
beyond what we are being asked to provide today?
    Ambassador Bremer. On this--on this, we have said very 
clearly that this is the amount which we believe the United 
States needs on a supplemental. We do not anticipate coming 
back to Congress with another supplemental of this magnitude 
for Iraq, as the chairman has said----
    Mr. Obey. The question--with all due respect, you are 
playing with words when you say ``another supplemental.'' That 
doesn't preclude the fact that you may build into next year's 
budget request additional funding.
    Ambassador Bremer. That is possible. That is possible.
    Mr. Obey. So let's not play word games here.
    What I want to know is, in addition to this supplemental, 
how much can we expect to lay out through any device, whether 
it is regular appropriation bill, supplemental or theft, 
whatever you want to include, how much can we expect that we 
will be asked to appropriate through any spigot, through any 
faucet, over the next 5 years.
    Ambassador Bremer. I can't answer that for the military.
    Mr. Obey. Because we were told by OMB--well, I'll ask you.
    We were told by OMB in March that there would be nothing 
beyond what they asked us for then.
    Ambassador Bremer. Right.
    Mr. Obey. They only missed it by 87 billion bucks, so I 
want to know, what can we count on? If we approve of this, what 
are we getting ourselves into for the next 5 years in terms of 
dollars?
    Ambassador Bremer. I don't have a figure for you, 
Congressman. It certainly is nothing like this, because we 
have, in constructing this supplemental, we have said what is 
it that the American Government should do in the next 12 to 18 
months to get the Iraqis to a place where they will be able to 
do their own reconstruction, and that happens by the year 2005.
    Mr. Obey. Can you tell me, when our staff talked to you, we 
were given estimates of $14 to $16 billion for rebuilding the 
electrical system, $14 to $16 billion----
    Ambassador Bremer. Right.
    Mr. Obey [continuing]. For dealing with the water system.
    Ambassador Bremer. Correct.
    Mr. Obey. We have far less than that in this package, and I 
think the President hardly met with spectacular success in his 
appeal to the U.N. yesterday, so those private estimates don't 
match what you are telling us.
    Ambassador Bremer. Congressman, no, I am afraid you are 
mixing two things up.
    Mr. Obey. I hope so.
    Ambassador Bremer. The World Bank has estimated Iraq's need 
at $60 billion over the next 4 to 5 years. That is sort of the 
macro number.
    What we have said is, okay, of that need, how much is 
urgent and serves American interest, security, critical 
infrastructure, and can we do it quickly?
    Our fair share, we said, an urgent amount and essential, is 
$20 billion. We are not planning to spend, as you point out, 
$16 billion on water, which is the U.N.'s number. We are not 
planning to spend $13 billion on electricity, which is the 
U.N.'s number, because we do not consider that to be urgent and 
right away, so one should not take the World Bank's $60 billion 
as a mark and say, sooner or later America is going to have to 
pony up for that. That is not the plan.
    Mr. Obey. General, what about the military side?
    General Abizaid. Well, Congressman, as you know, the 
military costs are very much associated with the number of 
troops in the region, and currently CENTCOM is operating at 
about 10 times what it has normally operated with in terms of 
the number of troops. But when you look at the security 
situation in the region--and the CENTCOM area is really at the 
heart of the global war on terrorism--that doesn't only include 
Iraq, it also includes Afghanistan.
    I would not be able to make an estimate on how many----
    Mr. Obey. Seventeen seconds left, if I could ask you to 
supply that for the record.
    And tell me, how much do you estimate the total reset cost 
to be for all of our equipment over there now?
    General Abizaid. Sir, I would have to provide that for the 
record. I don't have those figures. I mean, we have been told 
it could be as much as $15 billion.
    Mr. Obey. Is it that far off?
    General Abizaid. Sir, I would not want to guess. I will 
have to provide it for the record.
    [The information follows:]

    Estimating the total reset cost for all our equipment 
currently in Operation IRAQI FREEDOM is best answered from 
sources outside USCENTCOM because the Services are responsible 
for these efforts under Title 10, US Code. I am aware that OSD 
is preparing a brief for Members of Congress.
    As mentioned previously, the Services and OSD are 
clarifying their estimates.

    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Mr. Obey.
    We will next go to Mr. Knollenberg.
    Mr. Knollenberg. Thank you very much.
    Ambassador Bremer, I think it is entirely appropriate that 
the two of you are here together today, because we are asking 
questions that relate to both of you. Sometimes I suspect there 
is a mixture. Our reconstruction mission and our military 
mission, I think, are strongly linked.
    As I see it, the funding for reconstruction in Iraq is 
directly related to supporting the mission of our troops there. 
For example, there is in your request $2.1 billion to equip and 
train the Iraqi forces. This is the army. There is about $76 
million for the civil----
    Ambassador Bremer. That's right.
    Mr. Knollenberg. I think you called it civil defense group.
    Ambassador Bremer. That's right, civil defense corps.
    Mr. Knollenberg. In order for our troops to be successful, 
I think there must be a functioning Iraqi army in place, the 
sooner the better. I think you've got some goals along those 
lines.
    And the other thing I would say, too, is that our ability 
to root out terrorists depends in part on the Iraqi people, and 
I don't know how successful that is right now. In a word or 
two, could you comment on that?
    Ambassador Bremer. Yes. Actually in the last 2 months or so 
we have seen an increasing number of Iraqi citizens coming into 
either the Iraqi police that have stood up or to our tactical 
commanders in the field with information about criminals, 
terrorists and Baathist loyalists and that has led to more 
detentions and arrests of those people.
    Mr. Knollenberg. General, would you have a comment on that?
    General Abizaid. Yes, I would say there are three 
variables. One is the security situation, obviously; the other 
is the number of international forces; and the third, which I 
consider most important, is the number of Iraqi security 
forces. The more that we build up Iraqi security forces, 
ultimately the less we will have to provide in Iraq itself, and 
we are very satisfied with the direction that we have taken. We 
believe that acceleration of Iraqi security capacity will, over 
time, allow us to draw down.
    Mr. Knollenberg. In establishing these basic services, I 
think it is also important to having a positive relationship 
with the Iraqi people.
    Ambassador Bremer. Well, absolutely. I think you will find 
Iraqis more persuaded to cooperate with us if they have the 
essential services.
    You may have noticed a poll that was released yesterday, 
Gallup Poll, which says despite all the hardships, two-thirds 
of the Iraqi people believe that it has been worth it to be 
liberated from Saddam, so the general political environment is 
favorable to us. We just have to fix the essential services.
    Mr. Knollenberg. Thank you.
    Would you, General Abizaid, comment on how the funding for 
reconstruction affects the mission of our troops. I know that--
the chairman touched on this a bit, I think, in his questions, 
but would you give us kind of a picture of how it does connect 
with the troops?
    General Abizaid. Well, clearly, clearly, the money in the 
reconstruction part of the supplemental includes all of the 
security services; and the security services, I would like to 
point out, are not unlike our own security services here at 
home. I mean, we have an Army, a Navy, an Air Force. We have 
local, national, and regional types of police forces, et 
cetera, and in rebuilding these forces, we will achieve a lot 
in being able to bring down our own levels and ultimately turn 
over Iraq to the Iraqis, which is our ultimate goal.
    In regard to the other services, it is just so important, I 
think, that we provide an ability of the Iraqis to have--at 
least to show that they will have a better life ahead. And so, 
being able to show that the electricity can be repaired and 
brought back on, that the water systems, et cetera, can all 
work properly, all have a definite security component.
    We know for a fact down in Basra there were riots that were 
directly associated with the lack of electricity, and the 
security component of it is that we have to protect the lines, 
of course, but we also have to ensure that we develop the 
capacity to feed civil demand at least to a minimal level.
    Mr. Knollenberg. Let me go on to another topic. It is 
water.
    I know that water has been a problem on a scale of 1 to 10, 
10 being the worst and one being the best. What is the 
situation just quickly on the water? Is it extremely severe, 
the quality of the water?
    Ambassador Bremer. Yes, it is very bad. It is an area where 
there was almost no investment in infrastructure. As the 
chairman mentioned in his opening comments, only 6 percent of 
the population has access to sewage treatment.
    Mr. Knollenberg. That is a figure, I picked up in doing 
some reading on this situation.
    The water infrastructure, one of the comments that was made 
is that currently 60 percent of the potable water from 
treatment plants is being lost----
    Ambassador Bremer. That's right.
    Mr. Knollenberg [continuing]. Largely because of leaks. But 
under your reconstruction plan, that water loss will be reduced 
to 40 percent. I guess we are dealing with something that is 
really minimal in terms of any kind of strength.
    Ambassador Bremer. Yes. And there again is an example of 
where we take an immediate need, we try to alleviate it, and we 
leave the rest to the Iraqis to figure out or other donors to 
figure out in the years ahead, but try to get it from 60 to 40 
percent quickly.
    Mr. Knollenberg. Is it countrywide, this water problem?
    On a point that I might bring up, and I know money--we are 
talking about money here, but let me offer this:
    I have been involved personally in doing some things back 
in my district. There is an organization or company, or several 
companies, that offer a technology; and what it really amounts 
to is simply this: Instead of replacing the entire 
infrastructure, the pipe, you merely put this sleeve in. It is 
a pipe within a pipe.
    Ambassador Bremer. Mm-hmm.
    Mr. Knollenberg. Much cheaper, less than a third as costly. 
They can put it in in no time; in fact, some will argue they 
can do it in a day. And it is a foam that they blow in. You 
have probably heard of this.
    Does this have any application perhaps?
    Ambassador Bremer. Might very well. I would certainly 
encourage them to be in touch with us.
    Mr. Knollenberg. Well, I will tell you what I will do. I 
have got something I would like to include in the record 
because my time is a little shy. It is a liner, a sleeve, that 
coats the inner part of an older or a damaged pipeline; and 
this can double the life of a pipe at less than a third of the 
cost.
    We have done that right in my own district, and I know they 
have done that around the country; so I think that perhaps is 
something that could be looked at, because those figures are 
scary. Because if you are going to get--60 percent of the 
potable water is only reduced to some 40 percent, that is not 
much of a gain.
    I don't know if this application would work either, but 
with all the things you have got, all the problems you have 
got, $3.7 billion, is it in the water and sewage money that is 
a part of this?
    Ambassador Bremer. Yeah.
    Mr. Knollenberg. That's something I would be happy to 
include for the record and be sure you get copies.
    Is my time up, Mr. Chairman?
    Mr. Kolbe. Forty-eight seconds.
    Mr. Knollenberg. Forty-eight seconds, that's not much time 
to do anything with; but no, I don't yield back for the moment.
    I am getting down to a point--the market economy, you are 
doing some things on that. On the 15th of October you are going 
to introduce the new Iraqi dinar?
    Ambassador Bremer. That is right.
    Mr. Knollenberg. Which will float against other countries' 
currencies?
    Ambassador Bremer. Correct.
    Mr. Knollenberg. Is that risky?
    Ambassador Bremer.  Well, I don't think it would be risky 
if we had a responsible fiscal policy, but since I am balancing 
my budget this year and next year, it is not that risky.
    Mr. Knollenberg. But that is something that could be done.
    I think maybe China could learn from that.
    Ambassador Bremer. I have got my hands full in Iraq, 
Congressman.
    Mr. Knollenberg. Well, thank you. Thank you both very much. 
I appreciate your response.
    Thank you.
    Mr. Kolbe. Thank you very much, Mr. Knollenberg.
    Mr. Jackson is back and Mr. Crenshaw's on deck and before I 
call on Mr. Jackson, I think we should note that 
congratulations are due to what is probably, safely, the newest 
father in the room here.
    Congratulations.
    Mr. Jackson. Thank you, Mr. Chairman.
    Mr. Kolbe. It is your turn.
    Mr. Jackson. I want to start by welcoming Ambassador Bremer 
and General Abizaid to our subcommittee and thank them both for 
their service to our country.
    Gentlemen, I want to follow up on a line of questioning 
begun by our ranking member, Mr. Obey. Depending on who you 
listen to, the overall costs of Iraq reconstruction range from 
$50 billion to $100 billion. Until this request arrived, every 
indication we have had from the administration has been that 
the initial $2.5 billion, plus anticipated oil revenue and 
funding from other donors, would take care of reconstruction 
needs.
    One administration official, who candidly estimated the 
costs of the war at $100 billion to $200 billion, Larry 
Lindsey, on 9-15 of 2002, is no longer on the job; and another, 
Mitch Daniels, on 4-21-03, who indicated earlier this year that 
Iraq would not require sustained aid, has also left the 
administration. So everyone in the administration who had 
projections that have great implications for this committee 
have left; and it appears that we are now getting pieces of 
that request.
    I am asking Ambassador Bremer, how much can we expect from 
other bilateral donors and when can we expect it? The President 
spoke to the United Nations yesterday and asked them to pony 
up, and there is some evidence that that may or may not happen.
    How much do we anticipate from the World Bank, and when can 
we expect them to begin lending? And how much will the 
estimated $200 billion in debt owed by Iraq be dealt with in 
the context of international lending? Will lending proceed 
prior to resolution of the debt issue and are these costs being 
factored in as well, Ambassador Bremer?
    Ambassador Bremer. Thank you, Congressman, and 
congratulations.
    Mr. Jackson. Thank you, sir.
    Ambassador Bremer. In terms of other donors and where money 
can come from, there are essentially three points: First, we 
already have pledges of about $1.5 billion from some 61 
countries for reconstruction. Some of that money is already 
flowing.
    Secondly, we are trying to get frozen Iraqi assets from a 
number of countries. These are assets which were frozen in 
accordance with the U.N. Resolutions. They total about $2.5 
billion. They are spread around lots and lots of countries, and 
the Treasury Department is leading a very aggressive effort to 
see if we can't get some of those funds back to the Iraqis.
    Thirdly, as you suggest, there will be a donor's 
conference. We are hoping for substantial contributions from 
other countries and, as well, from the international financial 
institutions like the World Bank and the IMF.
    Nothing--none of this is going to fund the full gap of the 
60--the number I think that people are now sort of circling 
around is $60 billion, because that is what the World Bank has 
said they think the needs are in Iraq over the next 4 to 5 
years, so that is sort of the total number people are looking 
at.
    Mr. Jackson. My understanding is that the administration 
anticipates that the fiscal year 2005 budget will contain 
follow-on reconstruction funds for Iraq, but that it will not 
be of the magnitude of $20 billion. Can you give us a range of 
what kind of requests we can expect in 2005?
    Ambassador Bremer. This is really the question that Mr. 
Obey asked me before, and I simply don't have a number at this 
point. I am sure we will have one at some point, but it 
certainly isn't going to be anything like this size and it will 
come through the regular appropriations process, as the 
chairman asked me at the top of the hearing.
    I didn't answer your question on debt, sorry.
    The situation on debt is that the Group of Seven, at its 
support meeting in France in June, agreed that we would 
postpone any payment on Iraq's very large amount of debt for a 
year-and-a-half, giving time to try to figure out what to do 
about that debt. So I think that problem will be worked on over 
the next 18 months, which suggests that people making 
contributions in the future are going to have to understand 
that the debt question is still open.
    Mr. Jackson. Ambassador, let me take this opportunity to 
yield to our ranking member, Mr. Obey, for any additional 
questions that he might have along the lines that we have 
asked.
    Mr. Obey. I thank the gentleman very much.
    Mr. Ambassador, I want to go back to a question that Mrs. 
Lowey asked you, and it is on page 17 of this document, the 
justifications.
    Again, it says two new 4,000-bed maximum security prisons, 
400 million bucks. That works out, I think, to $50,000 per bed. 
How can it possibly cost us that much to build that kind of a 
prison in Iraq? I mean, you could build a prison in the United 
States for that amount and have money left over.
    Ambassador Bremer. Congressman, I asked the budgeting 
people about that, and I will give you their answer, which you 
may or may not find satisfactory. They did some cost analysis 
and the only immediate number they could come up with was a 
cost of something like $32,000 a bed for maximum security 
prison in the United States 10 years ago. I don't know what it 
would be today.
    One of the problems we have is, it is more expensive in 
Iraq because we have shortages of cement, for example. We are 
going to have to work with imported cement. That, incidentally, 
is a factor because we don't have enough electricity; and we 
don't have enough electricity because----
    Mr. Obey. Who has the contracts?
    Ambassador Bremer. Nobody has the contracts. None of these 
contracts have been let.
    Mr. Obey. Do we know that these will not be sole-source 
contracts, that they will be competitive?
    Ambassador Bremer. Yes. I said in my opening statement that 
they will all be competitively bid.
    Mr. Obey. I mean, I would have thought that the one thing 
Iraq was good at is providing plenty of prison space.
    Ambassador Bremer. There were 151 prisons on April 9. Every 
single one of them was burned to the ground out of rage at the 
former regime. There are the remnants, the skeleton of the one 
maximum prison----
    Mr. Obey. I cannot believe that the Iraqis can't build 
prisons for less than $50,000 a bed.
    Ambassador Bremer. Well, there was only one--this is the 
maximum security prisons, which are specially constructed.
    There was only one out of the 151, which is Abu Ghareb, 
which was also destroyed by looters, which we have now begun to 
repair to hold some of our detainees.
    Mr. Obey. Well, I can tell that you, we had better have a 
detailed explanation of items like this, because this is going 
to--I mean, the American public is going to look at this the 
way they used to look at appropriations for the Lawrence Welk 
museum, and I don't want to take that kind of heat, so I think 
we had better have some more information from you fellows.
    The other thing I would ask: I find it very difficult to 
believe that after expending this huge amount of money over the 
15 months that you referred to that we are not going to get 
additional funding requests from the administration on both the 
military side and the reconstruction side.
    Ambassador Bremer. Sir, I didn't say there wouldn't be. I 
said there would not be a supplemental request. Other requests 
will come through the standard appropriating----
    Mr. Obey. Well, that is a non-answer. We are not asking--I 
am not asking which window it is going to come in. I am asking 
how much.
    Ambassador Bremer. I understand; I said earlier, I don't 
have a number for you. But you said, there would be no more 
requests. That is not right; I never said there would be no 
more requests.
    Mr. Obey. Do you have a range? I mean, if you have a plan, 
you certainly know what you are going to do beyond 15 months, 
or it is not a plan.
    Ambassador Bremer. This, we think, is what we need over the 
next 15 months.
    Mr. Obey. That doesn't tell us much about the next 5 years.
    Mr. Kolbe. Thank you very much.
    Mr. Obey. We need the whole story.
    Mr. Kolbe. I understand that Mr. Crenshaw and Mr. Kirk are 
willing to yield their place to Chairman Lewis of the Defense 
Subcommittee.
    Chairman Lewis.
    Mr. Lewis. I thank my colleagues for yielding.
    Thank you, Mr. Chairman. Our full chairman suggests that I 
am getting ready to go to Iraq tomorrow and there is a meeting 
I must go to in preparation for that. I spent a couple hours 
earlier today with Ambassador Bremer, and so I have one 
question, so I don't take all of my time, of General Abizaid, 
and then I will wander on.
    General, it was suggested yesterday in the Senate that of 
160,000 troops in Iraq, about 144,000 are U.S. It is also 
suggested that there is great pressure, conversation about 
reducing those numbers of U.S. Troops in the region.
    Can you discuss with us what the prospects are for 
expanding numbers in terms of help from countries like India 
and other parts of the globe?
    General Abizaid. Congressman, I can tell you that we have 
for a long time been looking to get another coalition framework 
division to come and join the coalition forces in Iraq. We 
have, as you know, two framework divisions now, one led by the 
British, the other led by the Poles. They are down in the 
south. They are doing a great job.
    What we are looking for is another framework division that 
could possibly go into the north or the north central part of 
the country.
    We have certainly looked to the Turks, to the Pakistanis, 
to the Moroccans, to other Islamic nations, because we believe 
that, number one, it is good to internationalize the force 
where we can; and number two, getting some sort of a Muslim 
military component in a major capability way would be good for 
the mission as well.
    I can't really tell you where we are politically. I also 
know that the administration has approached other nations, as 
well, to provide large capacity. We would very much welcome a 
third division, a third coalition division to be part of the 
force.
    And that is the best I can do for you now, sir.
    Mr. Lewis. Thank you, General.
    Mr. Chairman, thank you very much for this hearing, and I 
must say for all of those who are willing to listen to the 
gentlemen who are before us, it is very apparent that we have 
magnificent leadership in the region and we all should be 
grateful for it. And we appreciate the work the committee is 
doing, as well.
    Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you, Chairman Lewis.
    We will go next to Mr. Rothman, and then Mr. Crenshaw.
    Mr. Rothman. Thank you, Mr. Chairman.
    If I may impose upon you, Mr. Kolbe, if you could show me 
the clock, so I can see how my time is ticking down.
    Oh, I lost 10 seconds asking for the clock.
    Mr. Ambassador, General, it is a great privilege to be with 
you both. I consider you each to be great patriots, each to be 
very brave men who have made great personal sacrifices to do 
what you have done already and have pledged to do in the 
future. My thanks to you and your families for the sacrifices 
you have made, the jeopardy you have put yourselves in--and 
will be doing so in the future. And also my thanks to all of 
those under your respective commands for their bravery and 
their dedication, as well.
    Having said that, let me say how very troubled I am--even 
as someone who supported President Bush's request to send 
troops to Iraq, how very troubled I am with this new request 
for $87 billion.
    The President said and the Bush administration said a great 
many things to persuade the Congress and to persuade the 
country to go to war in Iraq--talked about weapons of mass 
destruction, talked about the imminent threat to the United 
States, people bringing smallpox over, people bringing unmanned 
aerial vehicles over, et cetera. None of those turned out to be 
correct.
    They told the American people about what kind of resistance 
we could expect from Saddam's army. They told us about what the 
postwar scenario would look like, what kind of help we would 
get from the people of Iraq. They told us about what other help 
we could get from other nations of the world to help rebuild 
Iraq and to protect the infrastructure in Iraq. On every single 
count, the Bush administration was wrong.
    Now, just about a month-and-a-half, Mr. Ambassador, before 
you took over this position, Secretary Rumsfeld on March 27 
came before the Senate and said, quote, ``I don't believe the 
United States has the responsibility for reconstruction. In a 
sense, reconstruction funds can come from those various 
sources, frozen assets, oil revenues, a variety of other 
things, including oil for food, which has a very substantial 
number of billions of dollars in it.''
    On the same day, Deputy Secretary Wolfowitz testified 
before the House Appropriations Committee, and I quote, ``There 
is a lot of money to pay for this, regarding reconstruction. 
That doesn't have to be U.S. taxpayer dollars. It starts with 
the assets of the Iraqi people,'' and as a rougher 
recollection, The oil revenues of that country could bring 
between $50 and $100 billion over the next 2 or 3 years.
    That was obviously wrong.
    We are dealing with a country, he said, that can really 
finance its own reconstruction and relatively soon, and that 
was Deputy Secretary Wolfowitz in March of 2003.
    Now, we are being asked, the American people, for $87 
billion more.
    A lot of people have been asked to make sacrifices in the 
last several years of the Bush administration, but in 
particular, in Afghanistan and Iraq, our military men and 
women, our Reservists, our National Guard, extraordinary 
commitments of time, sacrifices no one ever believed they would 
be called upon to make, totally out of any historical 
perspective for these respective organizations.
    Veterans are told they can't go to the veterans hospitals, 
their drug costs go up, seniors can't get prescription drugs, 
no money for schools, no money for all kinds of things. Two 
percent of the containers are inspected here in America for 
homeland security, because the President said we don't have 
enough money to inspect more than 2 percent of the containers 
coming into the country.
    Now he wants $87 billion for your very important work. And 
by the way, I agree with you that the post-Iraq success or 
failure will be incredibly important to the national security 
of the United States. The problem I have is believing what the 
Bush administration says is true on issues like Iraq. They said 
we didn't need money for reconstruction. Now you say we need 
$87.5--$87 billion.
    The General said earlier, the General said earlier--may I 
speak?
    The General said earlier that his determination about the 
number of troops, American troops in Iraq, and the length of 
time that we would have to be there, was directly related to 
the reconstruction efforts and the success. That was his 
testimony. But, Mr. Ambassador, you have been unable to tell us 
what our projected 5-year plan is for reconstruction, so how 
can we know what our 5-year military commitment is going to be?
    We have already spent, adding up the military and 
reconstruction numbers, it is $152 billion already with this 
$87 billion package, and we don't even--we can't even predict 
what the military will be because you have not told us what the 
plan will be for the full 5 years. And, coincidentally--and I 
hate to bring this up, but it is a fact--you present us a 15-
month plan that brings us right up to the next Presidential 
election.
    And then we don't know, and you are not telling us and 
haven't told us, what the cost would be after the next 
Presidential election; and that bothers me not because of 
questions about your integrity or the General's, because I 
think you are fine, wonderful men of great integrity, but this 
administration has consistently made statements to the Congress 
and the American people that have not been true.
    So I am going to have difficulty and the American people 
are going to have difficulty swallowing this $87 billion figure 
if we are led to believe by this administration, that is all we 
are going to need, or we can't really tell you how many more 
years our military is going to be there because we can't tell 
you how many more years or how many more dollars we are going 
to put into reconstruction, because we thought, by the way, a 
lot of nations were going to give us money for the war.
    Well, gee, I guess we were wrong. Well, maybe that had 
something to do with the manner in which this administration 
decided to go it alone.
    Why should the Congress, why should the people of the 
country believe that these numbers are real? I ask that. I know 
it is a difficult question. And they sent wonderful messengers 
here and probably the folks who created all of the--made all 
those statements that Congress was asked to rely on, that the 
American people were asked to rely on, they are not here; and 
many of them are still in office and I wonder why.
    Do you have any comments, gentlemen?
    Mr. Rothman. I yield back.
    Mr. Kolbe. With fairness, with that long statement, I think 
we should certainly allow the gentlemen to answer even though 
there are only 12 seconds.
    Mr. Rothman. I said I certainly am inviting either of these 
gentlemen to make a comment.
    Mr. Kolbe. Do either one of you have any--all right.
    Mr. Rothman. With that, I yield back.
    Mr. Kolbe. Mr. Crenshaw.
    Mr. Crenshaw. Thank you, Mr. Chairman. And I want to add my 
words of thanks to the Ambassador and the General for the work 
they have done.
    I know, Ambassador, when I was in Baghdad in early August 
and you were kind enough to spend an hour or so to go over 
where you were, I came away with two lasting impressions. One 
was that there is a disconnect between what I had expected, 
what I had been reading and hearing and what I actually saw on 
the ground that day, the tremendous success that had taken 
place in those first 90 days, and since then, another 2 months. 
But the other impression I came away with is that it is just a 
huge, huge undertaking; and for both of you all, I just think 
that I don't know why you would want that kind of job.
    But you have got it, and I think it is critical that you 
continue to do the things that you outlined. And I know, as I 
have watched some of your critics over the last month or so 
come up with so-called ``new ideas,'' the kind of things that 
you went over almost 3 months ago.
    But I want to turn just--my question, it kind of relates to 
an area we haven't touched much on. We talked about security, 
and I know that was one of the primary focuses that you all 
have been involved in, to build a security environment so that 
a new nation can be born. I know that the political side, 
writing the constitution, having free elections, that is 
obviously important. And the economical side, I think, is 
really critical as well, because with the security, with the 
political environment, if you create a vibrant economy there in 
Iraq, that is going to go a long way to bringing the kind of 
stability that we are looking for. And I know in this package 
there is a little bit of money to be used to work in the 
private sector development, and I do think that is critical.
    Maybe could you talk a little bit about where that money is 
going to go, how that is going to be spent and what you see--
your vision of recreating the economy that was probably there 
35 years ago before Saddam Hussein ran it into the ground.
    Can you tell us a little bit about how you are going to 
spend that money and what you hope to achieve in terms of 
private sector development?
    Ambassador Bremer. Thank you, Congressman.
    It is clear to me if we are going to succeed in Iraq, we 
have to have a vibrant private sector. In most countries that I 
am familiar with, a vibrant private sector is really the 
balance wheel that keeps the government in check, because it 
gives people another place to work, rather than, as they had to 
do in Saddam's Iraq, depend on the government for their jobs. 
So it is not just an economic fact; it is a political fact. It 
is a very important political fact.
    The key now to success, now that the Iraqi Government has 
put into effect very broad, liberal economic policies, is to 
get credit into the hands of Iraqis who want to go into 
business, because there is no credit system. There are banks, 
but as I think you know, the banks there were essentially 
bureaucratic mechanisms for putting credit into the state-owned 
enterprises, very much like the experience in China that was 
touched on briefly a minute ago. These banks are not real 
banks, and what have we got to do is develop lending processes 
and lending windows.
    We have a proposal, as you pointed out, for $200 million 
for an American-Iraqi Enterprise Fund, which is modeled on the 
very successful Polish-American Enterprise Fund which was set 
up in Poland after the liberation of Eastern Europe, and the 
idea is to try to use that to try to push money out to 
encourage entrepreneurship.
    The International Financial Corporation, the IFC, which is 
a subsidiary of the World Bank, is also setting up a fund, 
similar, for miniloans and microloans to encourage very quick 
dispensing of credit, so we can get the economy turning over, 
create jobs, and create a competitive, vibrant private sector.
    Mr. Crenshaw. And just as a closing comment, Ambassador, 
what I saw in terms of people on the streets and people in the 
markets and people driving and, in particular, it appeared that 
about every other Iraqi house had a satellite dish on top, so 
it seems to me that there is a real market there, there is a 
real entrepreneurial spirit; and I certainly, along with, I 
think, the other members, wish you the best as you work toward 
developing those three goals.
    Thank you.
    Mr. Kolbe. Thank you very much.
    Ms. Kilpatrick, and then Mr. Kirk.
    Ms. Kilpatrick. Thank you, Mr. Chairman, and to the 
distinguished gentlemen with us today. I, too, appreciate your 
service, your sacrifices, and what you are doing and have done 
for this country.
    I am most concerned about the troops and that they get what 
they need to be protected, that they are able to serve in the 
military and have the best in terms of what they need in 
training, in personal items such as deodorant, and other kinds 
of personal things that my office has received calls that they 
are not getting; and the Flak jackets that have the protective 
shields in them. I am told 40,000 of our soldiers don't have 
that.
    Why is that, General? Why are we not protecting our troops 
to the best of our ability?
    General Abizaid. Thank you, Congresswoman. I appreciate 
that question.
    I want you to know that there is nothing more important to 
me than our soldiers, sailors, airmen and Marines, and I would 
also like to say to you that not only is it personal to me 
because I am their commander, but I am also a father of a 
soldier, a father of--a father-in-law of a soldier, and so I 
take this very, very personally.
    These young people that are there absolutely, positively 
deserve the best the country can give them.
    Now, I can't answer for the record why we started this war 
with protective vests that were in short supply, but I can tell 
you that by November every soldier that is serving in Iraq will 
have one. It is very important.
    I can't tell you, by the way, that every soldier will live 
a good life in Iraq. They won't. They never will, because it is 
hard duty. It is tough duty. We ask them to sacrifice, and we 
will do the best we can to not only protect them, but also to 
make their quality of life better every day; and we will do 
that.
    Ms. Kilpatrick. Less than 6 months ago, this Congress gave 
the administration a blank check, $79 billion of which this 
member still has a hard time, getting details in terms of where 
that money went.
    Today, we are before the Congress asking for $87 billion, 
$87 billion--as was mentioned earlier, larger than 10 of the 13 
budgets that we work on as the Appropriations Committee. And 
even in saying that, the servicemen and women who were there, 
who are poorly trained in many cases, whose lives are 
threatened every day, and now more killed than during the 
active participation in the war before May--we have got to do 
better, General.
    And I know that being a general, four-star general, you 
have been in many conflicts. Have you ever been in a conflict 
where one country paid 95 percent of an international war bill?
    General Abizaid. Well, Congresswoman, I can't say that I 
have. I don't know whether I have, because I have never really 
thought about it. It is--it is possible that we are definitely 
paying more than people might have thought with regard to other 
international contributions that might come forward. But I can 
tell you that I think you are wrong and, as a matter of fact, I 
know you are wrong in one sense.
    Ms. Kilpatrick. Help me, please.
    General Abizaid. That our people are poorly trained.
    Ms. Kilpatrick. Oh.
    General Abizaid. They are not poorly trained. They are 
well-trained.
    Ms. Kilpatrick. I beg to differ.
    I am saying to you what comes into this Congressperson's 
office, representing 680,000 people--over 20,000 are in Iraq 
and in the conflict in Iraq and Afghanistan as we speak--
families that call our office, families that we have met with.
    I want to correct it. I don't want to debate that it 
doesn't exist. I am telling you that it does, and it needs to 
be corrected as soon as possible. I want to respect your 
generalship, the responsibilities that you assume and the 
commitment that you have made, and the area that you are now 
responsible for. But I am telling you, General, it does exist, 
and we will talk about it later. I don't want to spend the time 
doing it now. Please correct that, please work to do that; and 
I believe in your heart, as well, that you will do that.
    Mr. Ambassador, as we talk about the $87 billion, it 
troubles me that you can't tell us how much you think it will 
cost. We will be getting the 2005 budget in a few months. This 
supplemental before us, I am not sure where I will be on it. I 
would much rather take out what the servicemen and women need. 
We need to reconstruct our own country. We need to invest in 
our own electric system and water and the like, so it is hard 
for this member now to talk about Iraq, as we have now gone 
there and decimated it.
    And Iraq is not a poor country, by the way. I am told that 
there are hundreds of barrels of oil, if not thousands, that 
can be used now; and the last figures I saw, although proposed 
before May, there were a number, that their oil reserves were 
helping the reconstruction. Now I am told that that number is 
zero. Is that true, Mr. Ambassador?
    Ambassador Bremer. No. The situation is the following, 
Congresswoman: Oil revenues are substantially lower than they 
were before the war because of destruction, largely by sabotage 
and by looting. We estimate that Iraq has a maximum production 
capability of some 3 million barrels a day. That was its level 
before the war. We believe we can return to that level in about 
a year, using $1.2 billion of the $20 billion that is here, to 
return them to that.
    Even then, next year, in the 2004 budget--their budget year 
is a calendar year, even though--even with that, we will still 
not have enough oil revenue next year to pay for all the 
expenses of the government. There are no extra funds being 
turned out by oil revenues until their 2005 year.
    Ms. Kilpatrick. Thank you. Can you stop right there?
    Thank you. I appreciate that.
    Iraq is a Muslim country. Sometimes I think we, as 
Americans and many Christians, we don't have enough respect for 
other cultures and religions.
    Within Iraq which is, the size of California--and you have 
been there, you know--Sunni Muslims are the largest sect, I do 
believe, and that is one of the biggest problems today with the 
disenfranchisement that they feel.
    How is this appropriation that we are considering going to 
help you to alleviate some of the real problems on the ground, 
some religious, of course, that a gun and a machete and other 
things cannot solve?
    How does this appropriation help you to mitigate those 
conflicts?
    Ambassador Bremer. Congresswoman, actually, it is the Shia 
who are the largest sector. I think you probably meant to say 
the Shia.
    The fundamental issue before us is to try to give the Iraqi 
people a sense of hope for the future, a sense that things are 
going to get better. And the way it helps alleviate a lot of 
the tensions is by making things better. And that is what this 
does, particularly the part that is related to security, which 
also serves to make our men and women in the Armed Forces 
safer. It also helps by getting Iraqis more in the front line 
of doing those security deeds, and that helps us get a more 
secure environment, an environment in which Iraqis have hope. 
And it is interesting that the polls that have been taken show 
that something like three-quarters of the Iraqi people have 
hope about the future. They believe their lives will be 
substantially better in the next 5 years.
    Ms. Kilpatrick. And over half in that same poll believe 
that we should leave the country and let them rebuild.
    Ambassador Bremer. We believe we should leave the country. 
The question is when and under what conditions. And we should 
do it as soon as security has been resolved. We are not staying 
there because we like to be there.
    Ms. Kilpatrick. What percent of their security force that 
we are building----
    Mr. Kolbe. The time has expired.
    Mr. Kirk.
    Mr. Kirk. Thank you, Mr. Chairman.
    Well, I think things are better. The last time I was in 
Iraq, the air defense network was shooting at me. And I will be 
joining Chairman Lewis in Iraq this weekend.
    When I look at what we should do, I generally focus on five 
key principles: One, that we fight the war on terror overseas 
and not in America's cities. Coming from Chicagoland, where we 
are home to the Sears Tower, and it is still standing, that is 
very important to us.
    Next, that we finish the job; otherwise, we condemn a 
future generation of Americans to refight this war.
    Third, that our goals must match the ideals of the American 
people that we have an Iraq that does not invade other U.N. 
Members each decade, an Iraq that governs by the consent of the 
Iraqis, and an Iraq that cooperates with the United Nations, 
doesn't confront it.
    Fourth, if we accept this mission, as we have, then we have 
to give you the tools to succeed.
    And, fifth, this mission must be completed to defend our 
Constitution as we both were sworn to uphold.
    Now, to summarize your mission, I think you are trying to 
rebuild a civilized government in a country that invented 
civilization, if we honor the historic heritage of Iraq. And I 
know from your briefings prior, the situation as you took it 
over in May, all jails were destroyed, all inmates released, 
there were no border guards, they had all been deserted as your 
materials point out. All the firehouses were destroyed, and 
firemen had no equipment. Iraq's children suffered the highest 
infant mortality rate in the Middle East, and electrical 
generation totalled one small town's 300-megawatt generator.
    In 22 weeks you have done quite a lot. The economy is 
growing. You have hired police. Polish peacekeepers are 
arriving. I look at other U.S. occupations. I asked CRS, in 
Japan U.S. Armed Forces took over in August of 1945. The first 
elections weren't until September of 1946, 13 months. Germany, 
we had the policy of denazification. So U.S. Armed Forces took 
over in May of 1945; elections were not until June of 1949, 4 
years later.
    People talk about the cost, but if we keep it in context--I 
am told the cost of World War II was 130 percent of our GDP; 
the Korean conflict cost 15 percent of America's income; and 
that the total war on terror, Afghanistan and this $87 billion, 
is 1.5 percent of U.S. GDP.
    I am going to support you based on that, both your military 
and your civilian requests. But I want to ask you one tough 
question, because I want to defend this Constitution, both the 
Article II part of the Constitution in the executive branch 
that you represent and the Article I part of the Constitution 
for the Congress.
    Now, we funded the President's September 11th supplemental 
request, but we rejected a couple proposals, and the kind of 
proposals we rejected are in this proposal. I actually have the 
reputation, being a former staffer, that I actually read the 
bills before they come up. And so I read this proposal, the 
actual legal language. In it, you have authority to transfer 
funds for any government activity. That sounds awfully broad. 
Now, we rejected that in the September 11th supplementals. 
Also, you have a contingency fund, a $100 million contingency 
fund, to be spent in the national interest. Now, this Congress 
should not appropriate any funds of any kind that are not in 
the national interest, but ``in the national interest'' sounds 
overly broad.
    Can you talk about how deeply essential you need funds for 
any government activity or to be spent in the national interest 
entirely?
    Ambassador Bremer. Our colleagues are telling us that that 
particular reference is to a part of this fund which goes to 
the State Department on which neither of us is competent to 
answer.
    Mr. Kirk. Okay. Well, I would hope that--Mr. Chairman, I 
would hope that the committee will follow our precedent on 
completely open-ended appropriations for any government purpose 
and not permit that.
    But let me ask one other tough question, because I am going 
to support this overwhelmingly. But the hospital. We have a 
$150 million children's hospital in Basra for cutting-edge 
research, and postgraduate development, and state-of-the-art 
care. Meanwhile, you have a $393 million request to give 
basically $350,000 for 1,105 clinics and other health care 
facilities. Is this huge, brand-new children's hospital really 
needed, because we could increase the aid to other health 
clinics in Iraq by 40 percent if we just don't build this one 
state-of-the-art research institution.
    Ambassador Bremer. Congressman, the idea here--and I 
support this children's hospital--is first that Basra is the 
second largest city in the country and does not have a 
children's hospital. And I have been to the children's hospital 
in Baghdad, and it, like most hospitals in Iraq, is in dire 
need of better equipment.
    The idea here is basically an idea from Project Hope. They 
did a similar project like this in China, which also has many, 
many needs in the health care area, particularly in the rural 
areas, and the concept is, you make a model that attracts 
technology, attracts doctors, and becomes a place where 
children throughout the country can go for the very best care. 
And as you pointed out, there is a really dire need for better 
child care in Iraq. The children mortality rate is extremely 
high.
    I think it is a useful project, and I think it is useful 
particularly that it is in Basra, not in Baghdad where there 
already is a hospital, but that it shows an interest in the 
second largest city in the country, and it will become a magnet 
not only in Iraq, but also in the region for the best 
technology and medical care for children.
    Mr. Kirk. I have got an open mind, but I am also thinking 
that for General Abizaid's troops, having more money and more 
clinics might help the environment that our troops are facing 
rather than one state-of-the-art, very expensive facility.
    But I yield back, Mr. Chairman. Thank you.
    Mr. Kolbe. Thank you.
    We have one or two more questioners, and then we will 
hopefully get just a few more questions in by Members again.
    Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman. Before I begin my 
questioning, I would just like to ask you as Chair, or Mr. 
Young as Chair of the full committee, whether Secretary Powell 
was invited to testify at this hearing or Secretaries Rumsfeld 
or Mr. Wolfowitz, as they were the architects of the policy 
that we are discussing today?
    Mr. Kolbe. Let me just tell you that since we are 
considering a supplemental, no. But Secretary Armitage will be 
up here next week, Under Secretary Armitage will be up here 
next week to talk about the Afghanistan part of the request.
    Ms. Kaptur. And, Mr. Chairman, why would a supplemental be 
different than a regular request, and especially one of this 
magnitude? Why would not the architects of the policy be 
invited to testify before this committee?
    Mr. Kolbe. Ms. Kaptur, the architects of this request put 
this together. Ambassador Bremer and his team at the CPA who 
put this together are testifying before us right here today. 
The person who is the architect of the supplemental is here.
    Ms. Kaptur. Well, I can remember when Secretary Powell came 
before this committee before the war in Iraq, and I asked him 
several questions at that point. And a lot of these dollars are 
going through the State Department and going through the 
Defense Department. And I find it objectionable that this 
Member does not have the ability to ask my questions of the 
policymakers.
    The other opinion I would like to express, Mr. Chairman, 
with all due respect, you have given us 8 minutes each. That 
means we have about 1 minute to review every billion dollars we 
are being asked to expend when I divide the time, not counting 
votes that we cast on the floor today. I think this is an 
abhorrent way to run the Republic. I don't think the 
subcommittee should function in this manner, and I think we 
should have sufficient time to examine every single billion 
dollars we are being asked to take from the American people.
    That is my comment. I appreciate your listening. I respect 
your chairmanship, but I resent being pigeonholed into 8 
minutes.
    Now, let me just say----
    Chairman Young. Would the gentlelady yield?
    Mr. Kolbe. I will not take it off your time.
    Ms. Kaptur. Yes.
    Chairman Young. This is just the first of a number of 
hearings that will be held, and the gentlelady will have many 
opportunities to question other architects or those who are 
partially architects of the policy. But this is the first of 
several hearings.
    Ms. Kaptur. Well, I thank you, Mr. Chairman. I know what a 
gracious gentleman you are, but I doubt that we will have the 
opportunity to talk to the people who shape the policy, and 
that is what I would like to do. That is what my constituents 
expect me to do.
    Mr. Obey. Mr. Chairman, if I could take 30 seconds to 
respond to your chairman. As he knows, I sent him a letter 
yesterday urging that we sit down and work out a bipartisan 
understanding of the number, the length, and the nature of the 
hearings that we ought to have, along with the appropriate 
witnesses, because, as I pointed out earlier, this is so large 
that it equals--almost equals the total of seven appropriation 
bills that we have passed so far this year combined. And it 
seems to me that since those seven subcommittees for an 
equivalent amount of dollars held some 56 hearings to examine 
how that money would be spent, that we do indeed need more than 
the 8 minutes that was provided to the Senators on Monday or 
the 8 minutes here today, or, for that matter, the limited 
amount of time that we will be afforded in what other hearings 
I know of.
    Mr. Kolbe. I appreciate the gentleman's comments and 
Chairman Young's comments. We are trying the very best we can 
to make as much time available. Ambassador Bremer has a number 
of committees that he is testifying before.
    And we will now return, and return to the time of Ms. 
Kaptur, and any further discussion about the procedures will 
come out of that time.
    Ms. Kaptur. Thank you, Mr. Chairman.
    And, of course, this, if approved, will provide every Iraqi 
citizen indirectly with at least $3,400, if you divide the 
population of Iraq by what this request proposes.
    And I have a question I will ask Ambassador Bremer about 
the Governing Council and its unrepresentative nature. But let 
me just mention that, in view of the amount of money that we 
have already given the administration and the lack of 
accountability to this committee, with no-bid contracts being 
given by the Department of Defense, by funds that even these 
witnesses don't understand, pictures like this appearing around 
the world, dollar bills being distributed all over Iraq, and I 
say, oh, is that the message that we really want to give to the 
world? Dollar bills, dollar bills, in a country that is known 
for dinars. It seems to me that there is a lot of 
accountability that needs to occur before committees like this 
one.
    Now, in my district of Toledo, Ohio, we need $400 million 
for a wastewater treatment plant, and if I count up all the 
needs of the States, the debts that they have had, the deficits 
they are facing this year, they probably need somewhere between 
$15- and $40 billion. So when we give this money for this 
effort, it means we are taking away from our own people.
    Ahmed Chalabi is a convicted felon in Jordan, extradited 
from the country. How can we possibly allow this type of 
individual to be president of a Governing Council that 
underrepresents Shiites, underrepresents Sunnis, and includes 
11 of 25--one now assassinated and one attempt this past week--
to be representative of a nation that is struggling to find its 
way?
    When you are swallowed in the belly of a whale, at least 
you ought to know where you are. And the nose of the whale is 
stuck between Bubiyan Island and Kuwait and Iraq, and the tail 
is floating in the Caspian Sea near Baku. Of course, this is 
about oil. It is about the politics that oil created. It is 
about terrorists who are attempting to topple regimes, not 
unlike we faced with Iran. We were on the wrong side then, too, 
and we have yielded very bad relations in that region for a 
number of years. America is totally dependent for her 
industrial and military base on the import of foreign fuel. Of 
course this is about oil.
    When President Bush, former president of Harken Energy, 
invested in Bahrain, why would he invest there? Where the Fifth 
Fleet is headquartered? Well, what about Vice President Cheney? 
The CEO of Halliburton Corporation now getting no-bid contracts 
amounting to the billions from my constituents? Not about oil 
and the politics that oil has created?
    Retired President Bush, a partner in the Carlisle Group 
with friends in Saudi? It is not about oil? It is about the 
politics that oil has created. When President Bush picked 
Philip Carroll, the former CEO of Shell Oil in Texas, to head 
oil operations, and then over 12 gas stations blew up in 
Pakistan that just happened to be Shell outlets, why would that 
happen? Why would the terrorists do that?
    So, my first question actually goes to General Abizaid. 
Yesterday, President Bush said Iraq is the major front in the 
war on terrorism. But on Friday he said Saddam Hussein had 
nothing to do with 9/11; 15 of the 19 hijackers were from Saudi 
Arabia. Taliban forces are regrouping and fighting again in 
Afghanistan. Madrasas in Pakistan are churning out their 
hateful youth every day. And the Israeli and Palestinian 
killing fields are bloodier than ever.
    General, do you agree with the President's assessment that 
the front in the war on terrorism is Iraq?
    General Abizaid. I agree that Iraq is part of the global 
war on terrorism, and I believe that the 3,000 citizens that 
lost their lives on September 11th lost them because we had 
failed to confront the menace of terrorism when we should have 
years before. We now must confront that menace where it exists, 
and it is in the Middle East, it is in Afghanistan, it is in 
Iraq, it is in the Horn of Africa. We have got to not only face 
it ourselves, but we have got to face it with those nations 
that are trying, such as Saudi Arabia and Pakistan, to fight it 
themselves.
    It is not about oil. It is about defending our way of life 
against people who would kill us just because we are Americans. 
That is what we are fighting for, and that is why we have got 
to win.
    Ms. Kaptur. Well, General, you and I don't see the world 
the same. It is all about the politics that oil has created. It 
is all about the regimes that cannot hold. And at some point we 
have to recognize we are in the belly of a whale, and the way 
you get out is by recognizing you are in it. And one of the 
first initiatives I would expect to come from the 
administration is energy independence.
    And I know my time has expired.
    And, Mr. Chairman, let me just ask on behalf of our troops, 
They are having to pay a dollar a minute to contact their 
families back in America. If we can provide $87 billion to 
Iraq, why can't we provide satellite time for our own kids to 
call their families back here?
    I thank the Chairman.
    Mr. Kolbe. The time of the gentlelady has expired.
    General, since the question was asked, we let you respond 
if you have any response or you want to get something on for 
the record.
    General Abizaid. I have no response.
    Mr. Kolbe. Thank you.
    Mr. Wicker.
    Mr. Wicker. Thank you, Mr. Chairman.
    Let me just say before I get into some questions, I have to 
take issue with my friend from Ohio that this is all about oil. 
After all, the testimony has been already today that we have 
taken the oil off the table, and that will be totally 
controlled by the new Government of Iraq. I have a question 
about that later, but certainly this is not all about oil; this 
is all about the global war against terrorism.
    Also, the gentlelady mentioned a particular infrastructure 
need in her district. I have infrastructure needs in my 
district. I have a bypass that I am not going to be able to get 
funded for several years, if not decades. The cost of an 
international war against terrorism assists us all in the sense 
of security, and it doesn't take away from our districts to say 
that we are funding the portion of the reconstruction costs 
that deal with security, and that has been the testimony before 
us today. And I certainly intend to support you, Mr. 
Ambassador, on this.
    Earlier, a statement was made by another friend on the 
committee that we have gone in and decimated this country. Now, 
I want to get back to that. We started off with Chairman Young 
flatly pointing out that the construction needs that we intend 
to pay for, the $20 billion of the construction that we intend 
to pay for, we did not cause by our operation, by Operation 
Iraqi Freedom. These are reconstruction needs caused by the 
Saddam Hussein regime. So to say that we have gone in and 
decimated this country, I think, is far from the truth.
    As I understand it, Mr. Ambassador, we estimate the entire 
reconstruction cost to be between $50- and $75-billion; is that 
correct?
    Ambassador Bremer. Yes. I think it has been refined a bit 
by the World Bank to more like $60 billion, but that is the 
range.
    Mr. Wicker. Okay. And so we propose to pay for a third of 
that by the U.S. taxpayers.
    Ambassador Bremer. Yes, sir.
    Mr. Wicker. Now, earlier today--and your testimony, it is 
also correct, that we are paying that portion which we deem to 
be necessary for security reasons?
    Ambassador Bremer. Necessary and urgent. And the $60 
billion, I repeat again, was a 5-year projection. It is not 
that that is what is needed all at once.
    Mr. Wicker. I see. Now, Mr. Ambassador, I saw some aerial 
footage today taken by a colleague of mine who visited just 
about a week or so ago in Iraq. From looking at the footage, it 
would seem that a person could fly over Baghdad for miles and 
miles, over an hour, and see very little evidence that a war 
had taken place. It looked to me that the roads were intact, 
the bridges were intact, most of the homes were intact.
    You testified earlier at the meeting of Chairman Lewis's 
delegation that when you came in in May, Baghdad was on fire. 
How much was on fire? It didn't look like there was much burned 
out to me. How do you square that statement with what I saw in 
the aerial footage?
    Ambassador Bremer. The Chairman was right. The amount of 
battle damage is extraordinarily low. I can't imagine any war 
where so little collateral damage was done. There were 
buildings damaged by our special munitions, and the fires that 
had been set when I arrived were mostly people taking revenge 
on people, like the Ministry of Interior was on fire. So what 
was on fire when I was there were fires set by looters and 
revenge seekers against the former regime.
    Mr. Wicker. And even that doesn't constitute any great 
portion of the existing infrastructure----
    Ambassador Bremer. No.
    Mr. Wicker [continuing]. In Baghdad.
    Let me move on to your statement about the need for a 
vibrant private sector, and have you comment about what you see 
in the future as control by publicly held corporations in 
foreign investment. I understand that we are taking natural 
resources off the table. What percentage of the gross domestic 
product of Iraq do you estimate comes from oil revenue and 
other revenue from natural resources?
    Ambassador Bremer. Well, it is hard, because I don't know 
what the denominator is. We think the gross domestic product is 
in the range of $30 billion a year. Oil revenues next year 
should be on the order of $12 billion. Now, those are the two 
numbers I can give you. I don't have an awful lot of confidence 
in the $30 billion.
    Mr. Wicker. Well, you told the delegation earlier today 
that when you arrived in May, this was one of the most 
controlled economies that you had ever seen. It was a 
Stalinist-controlled economy. Now, what I am understanding from 
you is that roughly 40 percent of the economy is still going to 
be controlled by the central government. What does that say to 
you--and I think it is an important statement for us to make to 
put an end to this accusation that we are there for the oil 
money. But what does that say to you when we are taking 40 
percent of the GDP and leaving it in the centralized Stalinist 
economy about the ability for publicly held corporations to 
thrive with foreign investment and publicly owned corporations 
owned by the Iraqi people?
    Ambassador Bremer. Well, I think the future of the oil 
industry there is quite obviously sort of a central economic 
and political question for the Iraqi people, and that is why we 
have said, it is your decision. They decided not to allow 
foreign investment in oil. We agreed with that because that was 
their decision. I don't know what they will do in the future, 
Congressman. We have encouraged them to think creatively and to 
think about ways to assure that we do not have an 
overconcentration of revenues in the hands of the central 
government, and there are models on how that can be done in 
other oil-producing countries. This is a discussion that we are 
going to continue to stimulate with the Iraqi Governing Council 
in the months ahead.
    Mr. Wicker. Members of this committee would tell you, Mr. 
Ambassador, that I almost always try to get around to ownership 
of private property. I would like to know how we are doing in 
that respect. I understand that there are ongoing land 
disputes. You are asking for $30 million for a property claims 
tribunal. How is this process going, and what do you see is the 
future of resolving these property claims and funding a land 
title regularization program?
    Ambassador Bremer. The property claims are an exceptionally 
sensitive political issue, because Saddam, borrowing again from 
Stalin, used the system of moving people around, large-scale 
migrations in this case of Arabs into the Kurdish regions in 
the north, as a system of--sort of a population engineering. 
And that has to be unpicked over the months ahead, because 
there are lots of people whose property was essentially 
confiscated.
    We are going to try to set up a system to adjudicate those 
in a fair way and try to take some of the pressure off of this 
very sensitive political situation. That is what that money is 
for.
    Mr. Wicker. Thank you.
    Mr. Kolbe. Thank you, Mr. Wicker.
    The General and the Ambassador are going to have to leave 
in just a couple minutes. We are going to try to see if we can 
get just a couple questions in, and make them very, very quick. 
I am going to ask just one, and then go to Ms. Lowey, and go to 
Mr. Young and on to see if we have another question here.
    The question was asked earlier about having competitive 
bidding. You answered it, so I want you to know, however, that 
it is very important that there be full competitive bidding for 
all the contracts that are included in that supplemental.
    My question to you, Ambassador Bremer: If you look through, 
go through the total of your supplemental request there, you 
have got a lot of additional personnel, 2,000 for border, 
Customs, police; 25 for immigration inspectors; 5,000 
firefighters; 20,000 facility protection guards. I didn't add 
it all up, I don't know if you have, to know how many personnel 
you are actually talking about. Have you given any thought to 
the sustainability of this over the long haul of how these are 
going to be paid for?
    Ambassador Bremer. Well, we think, as I suggested, that 
once the oil revenues come back up to the level they can be, at 
3 million barrels a day, that the Iraqi Government will be able 
to pay for these things on an ongoing basis.
    Mr. Kolbe. You would expect them out of their oil and other 
revenues----
    Ambassador Bremer. Yes, sir.
    Mr. Kolbe [continuing]. To pay for those?
    Ambassador Bremer. Yes, sir.
    Mr. Kolbe. Are they paid for the first year out of----
    Ambassador Bremer. The training.
    Mr. Kolbe. But also the salaries are being paid for out of 
this?
    Ambassador Bremer. Yes, sir.
    Mr. Kolbe. Ms. Lowey.
    Mrs. Lowey. Thank you very much, Mr. Chairman.
    And I thank you for appearing here. And I just hope again 
that we get careful responses to those questions regarding the 
costs that I discussed before.
    With regards to the new Iraqi Army, over $2 billion in the 
justification has been requested to field the new Iraqi Army. 
The first battalion is set to graduate in October, about 4,000 
men, and you have indicated that the $2 billion is required to 
have 9 brigades, 40,000 men fully operational by August of 
2004. And we fully support the goal and look forward to 
reaching it, but two questions, if I have time.
    In Afghanistan, we now have about 900 U.S. troops and 
several hundred allied forces training a new Afghan Army. It 
has taken about 6 months to field the initial 4,000 troops, and 
a retention rate hovered about 50 percent. In short, despite 
their goal to field the new 70,000-man army quickly, we are 
years away from accomplishing it. In Iraq, we will actually 
achieve 4,000 trained men by October. General, perhaps you 
could lay out for us how is it possible to achieve this goal of 
having a fully operational 40,000-man Iraqi Army in the next 10 
months, by August of 2004.
    General Abizaid. Yes, Congresswoman. I believe that there 
are very large differences between what we had to deal with in 
Afghanistan and what we are dealing with in Iraq in terms of 
trained military manpower. Also, I would like to say that the 
first battalion is about 7- or 800 strong, and we can reach our 
40,000 goal by October of 2004--I believe that is the time, 
September, October of 2004--primarily because we have a very, 
very well-trained military manpower pool in Iraq. We are able 
to use previous officers that we vet, of course, to make sure 
are part of the team. We have got a much more robust training 
system in place there. And the infrastructure that we are using 
in Iraq didn't have to be built from zero like it did in 
Afghanistan.
    So I believe that the goals are realistic. I think we can 
build an army of 40,000, but I would like to remind you that it 
is about 25 percent the strength of the previous Iraqi Army.
    Mrs. Lowey. Thank you very much, and I appreciate your 
coming.
     Mr. Kolbe. Mr. Young.
    Chairman Young. Mr. Chairman, I have one question I would 
like to propound.
    We are going to eventually have this mission completed. We 
are going to leave Iraq, hopefully with a government in place 
and police and court system, military. What happens, though--
knowing how volatile Iraqis can be, what happens if we are 
gone, the international community is gone, and all of a sudden 
some of those guys that disappeared when those two divisions 
disappeared, all of a sudden they decide to bring about a coup? 
They have some supporters inside the military or inside the 
constabulary. Is somebody making a plan to deal with that in 
the event that somebody should try to by force take over the 
new government?
    Ambassador Bremer. Well, Mr. Chairman, one of the reasons 
why we are taking great care in training the new army and 
keeping it focused on security matters and not internal 
security, and training them to an American style view of the 
military as being a nonpolitical institution, is to avoid 
falling into the trap of coups. Iraq has the unfortunate 
distinction of having been the first country in the Middle East 
to have a coup, which they had in 1936 and set off a bunch of 
coups all around. We do not want to fall back into that.
    The best safeguard for that is a robust Constitution, a 
robust political situation, a vibrant economy, and a 
professional army that stays out of politics. That is all I can 
tell you. I don't know, I hope we don't ever have to have a 
contingency plan for that.
    General Abizaid. Mr. Chairman, you know, you can never 
quite predict what the future is going to bring. But really, 
this whole mission in Iraq is about moderation versus 
extremism. What we are trying more than anything else in this 
great experiment is to ensure that moderation comes forward in 
Iraq and that the Iraqi people have a chance for a better 
future where they are not dominated by one or the other end of 
the extremes. If we build the institutions right, this is a 
very courageous and talented bunch of people that can be 
successful. And I think you could never be 100 percent sure of 
what is going to happen, but I believe there is a very good 
chance that we will be successful there, that we must be 
successful there, because if moderation can't take hold 
somewhere in the Middle East, we have a very long road ahead 
for all of us.
    Mr. Kolbe. Mr. Obey, a final question.
    Mr. Obey. Gentlemen, the chairman just asked a question, 
and he phrased it in terms of when this mission is completed. 
So I want to repeat the question I have asked earlier, since 
you are appearing on behalf of the administration today. When 
this mission is completed, if things go as you expect, how much 
additional funding beyond the amount that is in this package 
today do you think that we will have spent on the 
reconstruction side and on the military side?
    Ambassador Bremer. Well, Congressman, I haven't gotten an 
awful lot smarter in answering this question in the time you 
first asked it until now. I don't have an answer for you. We 
believe that this amount is what is needed now. There will be--
--
    Mr. Obey. Since we are limited in time, let me interrupt to 
simply say, with all due respect, if you had a plan, you must 
have some idea, some range of what a reasonably expected cost 
would be. The budget for next year is being prepared right now. 
Somebody has got some numbers somewhere.
    Ambassador Bremer. I do not, because I believe the $20 
billion is what I need. If I needed more, I would have told 
you.
    Mr. Obey. You told me earlier, the last time I asked this 
question, you said, no, you weren't saying that it wouldn't 
cost more money. Now you are saying----
    Ambassador Bremer. Well, what I said was--I never said we 
would not need more. I said, if we needed more, it would come 
through the regular appropriation procedures.
    Mr. Obey. Well, with all due respect, we are back to the 
word games again. You know what I am trying to get at. I mean, 
when I buy a house, I don't just need to know what the down 
payment is, I need to know what the monthly payments are and 
what I will have paid out over the 30-year or 15-year loan. And 
the Congress, exercising its fiduciary responsibilities to the 
taxpayer, has an obligation to ask those questions, and you 
fellows have an obligation to have some range of figures in 
mind. If you don't, you don't have a plan, you don't have a 
clue. And I cannot be expected to vote for a package if I can't 
get a clue from you of what the final costs within reason--
within a reasonable range are expected to be. With all due 
respect, if you can't give us an answer, you are stiffing us.
    Ambassador Bremer. Well, Congressman, I resent that.
    Mr. Obey. Well, I do, too.
    Mr. Kolbe. All right. Well, I thank the gentleman for his 
questions, and I thank the gentlemen for their testimony. 
Unfortunately, the Ambassador has to leave at this time; he has 
to be, I believe, at the White House. We will, of course, take 
questions for the record here.
    And I think we have been very fair in trying to give 
everybody an equal amount of time. We did get one question from 
each of the Ranking Members here in our second go-around.
    I think it might be worth just noting here that much talk 
has been made here about the Marshall Plan; that in today's 
dollars, 2003 dollars, the Marshall Plan would have cost $101 
billion. So I think that just helps to put some of this in 
perspective.
    I have a number of questions for the record that I will 
submit, and I know others will have some.
    I want to thank both of you for being with us today, for 
your patience, and for the answers that you gave us. I want to 
thank all the Members for their cooperation in making sure that 
they got through this hearing, and everybody was cooperative in 
making sure that everybody got a chance to ask questions. I 
thank you all very much. The subcommittee stands adjourned.
    [Questions and answers for the record follow:]


GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
                                       Tuesday, September 30, 2003.

   PRESIDENT'S FY 2004 SUPPLEMENTAL REQUEST FOR IRAQ AND AFGHANISTAN

                                WITNESS

RICHARD L. ARMITAGE, DEPUTY SECRETARY, UNITED STATES DEPARTMENT OF 
    STATE

                     Mr. Kolbe's Opening Statement

    Mr. Kolbe. The Subcommittee on Foreign Operations, Export 
Financing and Related Programs of Appropriations will come to 
order.
    This morning, we are considering the continuing review of 
the President's supplemental request for fiscal year 2004, 
primarily for Afghanistan and Iraq.
    We have asked that the chairman and ranking member of the 
Commerce, Justice, State Committee, Congressman Wolf and 
Congressman Serrano, to join us here; and I think they will be 
here at some point, because there are several items under their 
jurisdiction that are included in this request.
    Last week, in our first hearing, we heard from Ambassador 
Bremer and General Abizaid. This morning, the subcommittee 
welcomes Deputy Secretary of State Rich Armitage. And, upon 
completion of his testimony, we are going to hear from the 
USAID Administrator, Andrew Natsios.
    Our hearing today is going to focus more on the almost $2 
billion requested in the most recent supplemental, as well as 
the underlying fiscal year 2004 budget for security and 
reconstruction in Afghanistan, which is not to say that we 
won't get into other areas, but that will be a large part of 
our focus.
    While the media and the public have largely turned their 
attention to Iraq, we cannot forget Afghanistan where, truly, 
an international effort has been assembled to create and 
support a stable government that is capable of denying 
sanctuary to international terrorists. Now we are rapidly 
approaching a decision point where success or failure hangs in 
the balance.
    In addition to questions about Afghanistan, as I suggested 
a moment ago, I expect Deputy Secretary Armitage to discuss the 
larger policy context of our efforts in Iraq, and the impact of 
both of these areas on U.S. Policy and programs in the Middle 
East.
    Last week, when the subcommittee heard from the CENTCOM 
commander, General Abizaid, we heard words that I think frame 
the significance of the foreign operations part of this overall 
effort--this supplemental request. In his response to 
questions, the General said, quote:
    ``There is no strictly military solution to the problems we 
face. It requires that we move together on the political front, 
the economic front, on the reconstruction front, in a manner 
that is synchronized and coordinated. If we don't do that, I do 
not believe we can be successful. So you can pay the military 
to stay there, but you are only paying us to stay forever,'' 
unquote.
    I have recently visited both Iraq and Afghanistan, and our 
staff have spent a total of 10 days in Afghanistan within the 
past 5 weeks. Our chief clerk just returned a few days ago and 
Mr. Murray was on that trip, as well.
    I completely agree with what the General had to say. The 
reality is that our commanding military presence is 
inextricably linked to building civilian security forces, 
starting economic development, creating the institutions for 
political democracy. We need to pursue an orderly transition of 
power for stable and representative governments in both of 
those countries--Afghanistan and Iraq. We need to train and 
hire civilian police and border enforcement guards to free our 
military from such duties.
    Basic services such as electricity, water, and waste water 
treatment are desperately needed to give more Afghans and most 
Iraqis a better future. And, lest we forget, security also is 
necessary so that these infrastructure projects such as the 
Kabul-to-Kandahar road construction project are completed on 
cost and on schedule, and are usable by the people who need to 
be able to travel freely and safely on them.
    It has been just over 2 years since the United States 
suffered the most deadly attack by a foreign power on our 
homeland in its history. It has been 2 years since America 
responded and took the battle overseas to nations that support 
terrorists. Our men and women in uniform have performed nearly 
flawlessly, defeating the forces of the Taliban and al-Qaeda in 
Afghanistan, and Saddam Hussein's tyranny in Iraq.
    Now we are moving from the initial military phase against 
regimes harboring terrorists to helping build nations that are 
stable and at peace with their neighbors. Nurturing an 
Afghanistan and an Iraq that cease to be threats to their 
neighbors and a safe haven for terrorism will not be easy, and 
it will not be without significant cost. But with our support 
and that of other nations, we can and we will rebuild the basic 
infrastructure, support health care and education, and create 
governments ruled by law and not by tyrants.
    This is a difficult task. It is a costly task. It will 
require patience. It is a responsibility the United States did 
not seek. And yet it is very much linked to the protection of 
our own citizens here at home.
    We cannot afford to fail, for if we do, future generations 
of U.S. men and women in uniform will be returning to fight 
again in these nations, just as the sons of World War I 
veterans returned to the same battlefields in Europe less than 
a generation later.
    Deputy Secretary Armitage, it is a pleasure to have you 
before the subcommittee again. We appreciate your service and 
the dedication of the Department of State and the USAID 
personnel who represent us in these nations and, I might add, 
in all of our posts overseas.
    And let me now ask my good friend and colleague, the 
ranking member, Congresswoman Lowey, if she would make her 
opening statement. Then we will see if we have statements from 
Mr. Obey and Mr. Young, if he is with us; and then we will hear 
yours, Secretary Armitage.
    Mrs. Lowey.

                     Mrs. Lowey's Opening Statement

    Mrs. Lowey. Thank you, Chairman Kolbe. And I welcome Deputy 
Secretary Armitage and Administrator Natsios, whom we will hear 
from later, to the second of what I hope will be a series of 
hearings on the President's request for supplemental funding 
for Iraq and Afghanistan.
    As you know, last week we heard from Ambassador Bremer and 
General Abizaid on the Iraq request. Today, I intend to focus 
on several policy issues surrounding the war in Iraq and the 
plan to accelerate rebuilding efforts in Afghanistan.
    We had an intense hearing last week and asked some 
difficult questions. Unfortunately, many of our specific 
questions on the details of the $20 billion reconstruction 
request could not be answered adequately, and we hoped that the 
DOD and the coalition provisional authority intend to work with 
us as we move forward to clear up these ambiguities.
    However, I want to again, at the outset, express my support 
for all of the men and women deployed in support of the various 
missions around the world, both military and civilian, who are 
being asked to risk their lives every day. My concerns and 
questions are not meant to reflect on their dedication and hard 
work.
    As you know, Mr. Secretary, this committee took the 
position during discussion on last spring's Iraq supplemental, 
that the State Department, not the Defense Department, should 
take the lead in the reconstruction of Iraq. The conference 
committee ultimately provided the initial funds to the 
President and gave him the discretion to designate the lead 
agency. The decision to give DOD responsibility for both the 
conduct of the war and the reconstruction was, in my judgment, 
a grave error. The result has been that the Coalition 
Provisional Authority seems to be operating completely 
independently of the State Department.
    There were very serious disagreements in Congress about 
whether we should go to war, and there remain very grave 
concerns about the veracity of the intelligence we relied upon 
when debating this decision. We were told that we would be 
welcomed with open arms by the Iraqi people, and that Iraqi 
institutions would be quickly restored. That vision, put 
forward primarily by political appointees at the Defense 
Department, has proven to be seriously flawed and will 
ultimately be paid for by the next generation of Americans.
    Did the State Department have a different view of the 
complexities that would confront us in postwar Iraq? Did anyone 
in either the State Department or DOD foresee the chaos that 
would occur after the invasion? Did the U.S. rely too much on 
information from Iraqi exiles, many of whom have lived outside 
of Iraq for years? Why were there no plans for reconstituting 
the Iraqi police force prior to the invasion? And why were we 
so unprepared for the lawlessness that occurred?
    It is hard to conceive of this as anything but another 
massive failure of intelligence.
    And I also wonder why no one seems to have heeded the 
lessons of history that rebuilding war-torn societies takes a 
huge commitment of resources and time. Were these tough issues 
ever addressed by the State Department, or did they clash too 
much with the preconceived notions of DOD?
    Now that our troops are engaged, there is broad support in 
this committee and in this Congress to give them the resources 
they need to finish the job and to create a stable democracy in 
Iraq. And that is precisely why I am so disturbed by the 
irresponsible approach taken by the CPA for the reconstruction 
request and the continued refusal of the administration to 
level with the American people about the ultimate cost of the 
war.
    As we considered the initial request for Iraq funding last 
spring, we were given the distinct impression that $2.5 
billion, along with other donor resources--oil revenue, seized 
assets--would be sufficient to cover rebuilding costs. Now we 
have a request for $20 billion in front of us, no information 
about future costs and, you know, the estimates of the World 
Bank and the IMF and others; and the entire process is being 
managed by scores of government consultants largely obscured 
from congressional oversight.
    I fear that because many Members of Congress traveled to 
Iraq in August and advised Ambassador Bremer to accelerate his 
efforts and request the funding he needed, there was a rush to 
put forward a plan that is nothing more than a comprehensive 
wish list with no contracting plan or implementation schedule 
behind it.
    In spite of the growing costs and the President's appeal to 
the United Nations, the prospects for major participation of 
other donors, unfortunately, appear dim; only a few thousand 
troops and a million dollars were pledged, and many experts 
believe that the opportunity for significant allied 
participation in Iraq's reconstruction is essentially gone.
    As I indicated last week, the request for Iraq's 
reconstruction was put together by the CPA, without, it appears 
to many of us, the input of key implementing agencies. One 
result is that there is no additional funding sought for basic 
education; and if there is one thing I thought we had universal 
agreement on, it is the need for basic education programs, 
especially in Muslim countries.
    There also are no funds for food or agricultural 
development, local governance, or political transition, areas 
where the State Department is experienced and tested.
    I hope that we will have a frank discussion today, Mr. 
Secretary, about what role the State Department is playing and 
will play in postwar Iraq, what is the best path to political 
transition, and what the real prospects are for donor 
participation or more allied troops deployed to Iraq.
    With respect to Afghanistan, I strongly support efforts to 
accelerate our reconstruction efforts there. But I do have 
questions about precisely how some of this funding can be put 
in place and the time frame envisioned. But we need to provide 
the tools to give that country a fighting chance to stabilize 
itself.
    I am quite disturbed about continuing reports about the 
limited cooperation we are receiving from our Pakistani allies. 
The Afghan Government remains very concerned, and has been 
quite frank in saying that Pakistan may be cooperating with us 
in fighting al-Qaeda elements, but they are not cooperating in 
our efforts to root out the Taliban.
    We have provided a robust aid package for Pakistan, and we 
are being asked in this request to again waive the sanctions on 
assistance for nuclear activity and provide explicit authority 
to forgive their debt. Pakistan continues to receive sizable 
reimbursement from us for their, quote, ``costs'' in support of 
DOD's mission there. And, in fact, $1.4 billion is requested in 
this supplemental for foreign country reimbursement, most of 
which will go to Pakistan.
    I hope you can provide us with a frank assessment of their 
cooperation in the war on terrorism that will give us 
confidence that continued aid is warranted.
    I am also disturbed by reports that the administration 
intends to reorganize our effort in Afghanistan by bringing in 
a new team of top advisers. My assessment, based on my 
discussion, is that we are working feverishly on many fronts 
with a sound team of U.S. personnel and other experts. Progress 
in rebuilding is always slower than everyone expects. And there 
are some problems with cooperation among the various Federal 
agencies that work there. But those can be solved with better 
leadership.
    There is a plan which accompanies this request for more 
aid, so I would hope that you are prepared to address it in 
detail today. Afghanistan, as we all know, desperately needs 
more trained teachers, new schools, a modern curriculum, more 
customs officials, more trained government officials, a new 
Army and police force.
    Afghanistan, it appears to me, does not need a new set of 
recently minted senior advisers whose arrival will complicate 
ongoing efforts to accomplish all of these things. Both our 
military and civilian personnel, based on all reports, are 
working extremely hard under difficult physical circumstances 
and under constant security risks. They are confused by what 
this new plan means, and I fear that it will have the opposite 
effect of what you may intend, that it will slow things down 
rather than speed them up.
    I have also consistently expressed my concern about the 
plight of women in Afghanistan, who make up about 46 percent of 
the population and have been denied the opportunity to 
participate in their society for years.
    I have met with Dr. Sema Samar, chair of the Afghanistan 
Independent Human Rights Commission and former Minister of 
Women's Affairs, and know that there is progress being made. 
And just in the last week, a group of women, including those on 
the commission that is drawing up the draft constitution, met 
to write a bill of women's rights. Those rights would include 
freedom of speech, freedom to vote and stand for election, 
equal representation in parliament and the judiciary, equal pay 
with men, and mandatory education for girls through secondary 
school.
    But there is much more that needs to be done, as you well 
know, to make the promise of law a reality for women. The women 
of Afghanistan need and deserve us to make an extra effort to 
plan and implement programs aimed at helping educate men and 
women and empower women in that society. I see nothing in this 
new plan that responds to these concerns, and hope you will 
address that in your remarks.
    Thank you again for appearing before us, for your service 
to your country, and I look forward to hearing from both 
Secretary Armitage and Administrator Natsios.
    And I thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Mrs. Lowey.
    Mr. Obey, do you have some remarks?

                       Mr. Obey's Opening Remarks

    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Secretary, before we get into the subject matter of the 
hearing today, I do think that we ought to note that this is a 
special day in the history of the Republic. Because today 
George Will and I stand as one in rooting for the Chicago Cubs 
to beat the devil out of the Atlanta Braves come this evening.
    In fact, I have a proposal for national unity. This country 
has been divided on a lot of issues. People say that it is 
politically divided right down the middle. Can you imagine how 
we would unite this country if the Chicago Cubs and the Boston 
Red Sox actually played each other in the World Series?
    I wish we could continue in that vein, but I guess we have 
to get serious.
    I want to say that I agree with virtually everything said 
by the distinguished ranking minority member of the 
subcommittee, Mrs. Lowey. And I also want to say that I agree 
with much of what the chairman said, and nothing that I say 
should be interpreted in any way as criticizing the way the 
military conducted the war.
    What I find is, every time someone questions what happened 
in the postwar situation, we often have administration 
defenders who will go back and say, I don't know what you are 
squawking about; the military conducted itself quite well in 
the field. And I absolutely agree with that.
    I would also point out that before the war, virtually 
everyone understood that if it occurred, we would win it. I 
think it stands to reason that if you are going to spend $350 
billion-plus on defense and the other guy is going to spend 10, 
that you are likely to win.
    But having said that, I want to get into my discussion 
about, or my concerns about, the postwar period. Last week when 
Ambassador Bremer and General Abizaid appeared before this 
committee, I said that I found it ironic that the people coming 
before our committee to ask that we pay the bill for a number 
of the miscalculations that preceded this $87 billion request 
were not the political appointees who ran those policy 
decisions through the government, but instead, from the 
professional military and diplomatic services who, in my view, 
were given insufficient input into the decisions on how we 
ought to go to war or plan for reconstruction after the war.
    And I find it equally ironic that the first political 
appointee to appear before us in arguing that we have to pay 
the price is someone who, I believe, would have led us down a 
more sound route if the judgments that he had made had been 
more closely followed than the judgments of the people who 
actually won most of the arguments.
    I am sure, Mr. Secretary, based on our past histories, that 
if you and I had a chance to compare notes about issues around 
the world, we would find a number of issues on which we could 
easily disagree. But I think also that it needs to be said that 
you represent an approach to policy which is information based, 
and I, for one, appreciate that.
    There are facts that represent essential realities in any 
situation, and people of different political philosophies and 
perspectives can often find agreement about the nature of those 
facts and develop policies that will receive and sustain broad 
support both at home and abroad, even if it is necessary to cut 
through differing philosophies in the process.
    What I am saying, Mr. Chairman, is that I believe the 
gentleman who is testifying before us today lives in the real 
world, and his approach is, I think, much more disciplined than 
the approach that I think got us into this mess.
    So far as I know, the gentleman before us today does not 
rely on selective intelligence. He does not generate new 
intelligence when there is little available that fits his 
preconceived notion of the way things are.
    Mr. Secretary, I got my degree in political science, both 
at the undergrad and the grad level. But I have to tell you, 
lots of times political scientists drive me nuts. And I can't 
help but recall my major professor in undergrad was a fellow by 
the name of Ralph Hewitt. And I admired him because he was a 
practical Texan who taught about government as it existed, not 
as some theoretician thought it ought to exist.
    And I think you often remind me of Ralph Hewitt, because I 
think you have a pragmatic way to approach these issues. I wish 
I could say the same for a number of other political scientists 
who populate the government these days, who I think have never 
gotten over the effort to fit the reality of the world into 
their philosophy rather than the other way around.
    And, Mr. Chairman, I believe that the witness before us 
represents an approach that is much like Secretary Baker or 
Secretary Eagleburger, an approach that tries to bridge 
partisan differences and build international coalitions, rather 
than easily allowing them to fall apart. So I find it ironic 
that he has been given the task to come up here and ask us to 
borrow the $87 billion and ship it to wherever it is going to 
be shipped in support of this endeavor.
    We are talking about two packages, as we all know, of 
assistance and reconstruction aid. By far the largest is for 
Iraq. And I have to say, Mr. Secretary, that the materials and 
testimony that we have received from the administration thus 
far leave me increasingly uneasy about the direction of that 
effort. It would appear that the administration wishes to deal 
with the struggling and underdeveloped economy, bereft of 
infrastructure and experiencing unemployment of 50 percent or 
more, by bringing international corporations with highly 
capital-intensive construction techniques into the area to 
provide hospitals, prisons, sewer lines, transportation, and 
electrical systems at a significantly higher cost than if they 
were to be built here at home.
    I think we have made a lot of fundamental mistakes in Iraq, 
and I hope we don't make another one in using a high tech 
approach to reconstruction in an area that ought to be much 
more modest in terms of the kind of technology and approach 
that we use.
    To me, if we go down the road that these justifications 
seem to indicate we are going to go down, we are going to be 
handing the taxpayers here at home an enormous bill to 
transport all sorts of heavy equipment across the ocean to 
build all of these things in ways that have never been built in 
Iraq before.
    I don't understand again why we should be paying to build 
Iraqi prisons at $50,000 a bed when Iraq has probably been 
building prisons for years at no more than $500 a bed.
    A less-expensive approach would be more labor-intensive. If 
you are interested in helping to resurrect the economy in Iraq, 
I would think that it would be better if we did that than to 
have the highly capital-intensive approach that appears to be 
put together in these justifications.
    Frankly, when I look at some of those justifications and 
when I look at some of the postwar planning in general, two 
thoughts strike me: one, that it looks like it was put together 
by the President of an Optimist's Club, rather than someone 
with an understanding of the world; and secondly, it looks like 
the execution plans have been put together more like an MBA 
term paper than a document that reflects a realistic 
understanding of the society that we are wishing to operate in.
    So those are my concerns, and I hope that we can get into 
them in some detail. We can have arguments about whether we 
should have or shouldn't have. The fact is, we did. We are 
there. We are stuck. And now the question is, how do we deal 
with it in the least expensive and most effective fashion?
    Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Mr. Obey.
    Mr. Secretary, we are pleased to have your statement at 
this time. Of course, the entire statement will be put in the 
record. So if you would like to summarize it, your statement, 
we would do that, then we will go to questions.

                    Mr. Armitage's Opening Statement

    Mr. Armitage. Mr. Secretary, Mrs. Lowey, Mr. Wolf, ladies 
and gentlemen, thank you very much. I will just put it in for 
the record. In 1 minute I will reiterate exactly what our 
request is. And, of course, I will try to do my best to answer 
any questions any of the members want to raise.
    I came here to talk about the State portion of the 
supplemental request for $1.14 billion. It is a total of $810 
million for Afghanistan, of which $799 million would be in 
foreign ops moneys, and $11 million would be in Mr. Wolf's 
bailiwick; $140 million for Iraq, of which $50 million would be 
in the Foreign Ops account. This money would be for another 
multinational division which will be provided to Iraq--and I 
will get into that; Mrs. Lowey raised it; I will be glad to get 
into that during your questions--and $90 million in State Ops 
funds. Again, that would be in Mr. Wolf's bailiwick.
    And finally there is $190 million for the global war on 
terrorism, which has $140 million in your Foreign Ops budget, 
of which $100 million is a complex contingency fund, and $40 
million is proposed in operating expenses for USAID.
    Finally, there is 50 more million in State Ops funds. This 
is primarily the rewards money. I am fairly tapped out after 
Uday and Qusay's identification and death in terms of rewards 
money. I am trying to get well on that in the hope and 
anticipation that we will be paying that money out, as I say, 
in the hope for Osama bin Laden and Saddam Hussein.
    That is where we are today. And I will be happy to try to 
answer any questions that you have.
    [Mr. Armitage's written statement follows:]


GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
    Mr. Kolbe. Well, obviously, Mr. Secretary, you are a lot 
briefer than the members are, in your opening statement.
    Mr. Armitage. Well, I know who does what up here.
    Mr. Kolbe. Thank you.
    We will use the 5-minute rule today. We have fewer numbers 
of members here today, so hopefully we will be able to get 
through a couple of rounds.
    Before I begin my questions, Mr. Secretary, let me remind 
members that whether or not we agree with it, the details of 
the supplemental request for Iraq were prepared and handled 
through DOD, so it would be helpful today if the questions 
either deal specifically with the specifics of Afghanistan or 
the general broad policy issues of Iraq and the Middle East, 
rather than details of the supplemental request for Iraq.
    And in that light I have two questions, both of them in the 
general political area here, which I hope to get to in this 
first round, the first dealing with Afghanistan and 
reconstruction.
    Mr. Secretary, the attacks on the government of Afghan 
forces and private groups are limiting the reconstruction in 
the south and the east of Afghanistan. I think it is safe to 
say that. We have seen that over and over again. It has been 
reported to us by the people who have been here and continues 
to pose a threat to American and Coalition forces in and around 
Kabul.
    Can you give us your explanation? I know you are about 
headed to the region, and maybe we should be having this 
hearing next week after you return. But can you give us an 
explanation of the revival of the Taliban in so many parts of 
Afghanistan? And to what extent do the Governments of 
Afghanistan and Pakistan need to do things differently in order 
to reduce this threat to Afghanistan reconstruction?
    Mr. Armitage. I think we need to do it a lot differently.
    You are exactly right. The problem areas are the south and 
the southeast primarily. This is a classified chart, but it has 
the west and the north basically green, and the south and the 
east, and occasionally the north, yellow, where we have had 
increased Taliban activity.
    I believe the reasons are quite obvious why these areas are 
so fractious. It has to do with Pashtuns coming across from the 
Pakistani border, particularly the tribal area, causing trouble 
and running back into the federally administered tribal area.
    I believe it is fair to say that they have some differences 
of opinion about the direction that Chairman Karzai is going, 
even though he himself is a Pashtun.
    It is our hope to get more and more provincial 
reconnaissance teams out there. I am going to Kandahar 
deliberately because of the situation that you mentioned, 
before I go to Kabul, because I want to be able to talk with 
the new governor about what we mutually have to do to get that 
area into better shape. The Taliban, we believe, over the past 
4 or 5 months have increased in number.
    But I must say, Operation Mountain Viper, which is ongoing, 
has been quite consistent in being able to root out and bring 
down a certain number. Their numbers are up, but I think our 
soldiers are finding their contacts bearing much more fruit in 
terms of enemy KIA and whatnot.
    Mr. Kolbe. Would you add something to that about Pakistan 
and their role in this, and what they should be doing? I know 
you are going to be meeting with President Musharaf.
    Mr. Armitage. I will indeed. I think President Musharaf, 
first of all, has a tough row to hoe. He is trying to manage a 
political process. He is trying to manage the situation with 
India, and he is also trying to manage with President Karzai.
    We have engaged with both Pakistan and Afghanistan in the 
trilateral arena to try to bring a little more understanding 
between, particularly, President Karzai and President Musharaf. 
I personally believe that President Musharaf is intent on being 
supportive of President Karzai.
    The ability of the Government of Pakistan, particularly the 
military of Pakistan, to operate in the federally administered 
tribal areas is significantly inhibited, and is one of the 
reasons in our regular Foreign Ops budget that we have put a 
certain amount of money in to try and develop roads, schools, 
and clinics, to try and get a little more government insight 
and inroads into the tribal area. But it is basically, as far 
as I am concerned, a no-man's land.
    There is one other reason, I think, that I would like to 
call to your attention: There are problems in the south. This 
is the Kabul-to-Kandahar road. This road is troublesome to the 
Taliban, because it is rather dramatically empowering everybody 
who lives along it, even if they are 10, 15, 20 kilometers off 
the main road. It is cutting down dramatically the amount of 
time it takes products and goods to move that you are getting 
people empowered. This is not what the Talibs want. This is why 
they are trying to kill the workers on that road.
    I am sure that Andrew Natsios can go into excruciating 
detail on this. He has spent so much time on that road.
    Mr. Kolbe. I have limited time, but I am not going to 
forget this next question, because I think it is so important. 
This is also broad policy, a question on policy, and it relates 
back to Iraq.
    I think what we are going to find up here on this 
supplemental is a large effort--and, frankly, a bipartisan 
effort--to try and convert the supplemental into a loan, 
basically, to Iraq.
    I am not sure who signs that commitment on the part of Iraq 
since there isn't a government and there won't be an elected 
government for some time. But I am wondering if you would 
provide your views about this issue.
    Why not? Everyone says lots of oil revenues. Why not do 
this as a loan instead of giving it as assistance? And you 
might add to that, in your answer, if it was done as a loan, 
what kind of impact do you think this would have on the Madrid 
donor conference?
    Mr. Armitage. Yes, sir. That would be part of my answer 
anyway.
    I think I have three basic views. First is one that was 
well discussed up here; that is, when the total of debts that 
Iraq owes, plus reparation debts, both brought about by Saddam 
Hussein--there is a pretty crushing debt burden on the people 
of Iraq, and one I don't think we would want to increase.
    Number two, the Madrid donor conference on the 23rd and 
24th of October, which will be attended by Secretary Powell on 
our side, is meant to be, in the large sense, a grant donation, 
rather than loans. I think if we went to loans, then that would 
probably encourage other countries to follow suit and provide 
loans.
    And, third--I think this is not inconsequential--the 
perception of coming as both liberators and staying there and 
loaning money.
    I think they are three considerations that are worthy of 
some discussion.
    Mr. Kolbe. I think we will probably have some more 
discussion on that as we go forward.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.
    And, Mr. Secretary, what I would like to do, because there 
is limited time, is pose several questions regarding the State 
Department role in Iraq; and then, if you could respond in the 
limited time, I would appreciate it.
    First of all, Secretary Powell is apparently exploring with 
allies the concept of installing a provisional government in 
Iraq, backed by the 1958 constitution. And this conflicts 
directly with Ambassador Bremer's insistence here last week 
that a new constitution, ratified by a popular referendum, 
would precede any new government in Iraq.
    Number one, can you clarify where we are on this? Do State 
and CPA have different views? Who calls the shots on these 
matters? And how often do Secretary Powell and Ambassador 
Bremer speak to each other?
    Number two--I know you can keep all of this in your mind--
what precisely is the State Department's role in postwar Iraq? 
Because it seems to me that other than INL programs for police 
training, and the Secretary's periodic entreaties to other 
potential donors, it seems to me that the State Department is 
essentially out of the game.
    Number three, can you realistically assess what support we 
can expect from other allies to the rebuilding of Iraq? What 
magnitude of pledges do you expect from next month's donor 
conference? The need is $60 billion. Will we even get close to 
a billion from other donors?
    Fourth, do you have any comment on why our planning for 
post-invasion Iraq did not anticipate the immediate need for 
police to prevent the chaos and destruction?
    And, lastly, did State have an input into Ambassador 
Bremer's decision to disband the Iraqi army, which put 
thousands of armed men on the street without any pay, no reason 
to support America.
    And if you could just address those issues, I would 
appreciate it.
    Mr. Armitage. Thank you, Mrs. Lowey.
    I am unaware of Secretary Powell's trying to put a 
provisional government in place. In fact, when we had 
interagency discussions prior to the formation of the Governing 
Council, we had reacted against--the whole administration had--
against a provisional.
    Mr. Bremer--Ambassador Bremer and Secretary Powell speak to 
each other on the phone occasionally, but they e-mail, if not 
every day, pretty close to that.
    What is our role in postwar Iraq? We have 42 officers there 
now. And I don't want to make light of it, but both Ambassador 
Bremer and his second, Clay McManaway are both State officers, 
and the guy who is running the ``railroad'' is Pat Kennedy, one 
of our administrative officers.
    The other officers are spread out. We have them, like Mike 
G. Foeller, down in the southern region working with the Shi'a. 
We have others working with the Kurds. It is our hope, now that 
Ambassador Bremer has asked us to come forward with another 
approximately 60 officers, that we will be able to people many 
more of the provinces with State officers, the high majority of 
which we hope will be fluent language speakers.
    On the question of the Madrid conference, I am not going to 
prove myself a fool by estimating a number which I can't back 
up with anything other than air. But I will say that Secretary 
Powell sent Under Secretary Larson out tonight to go to Berlin, 
Paris, and Madrid in preparation for this conference. The 
Secretary and Secretary Rumsfeld are in a series of 
consultations trying to get more money.
    We have worked intensively with the Japanese, and I predict 
that they will have a generous pledge at Madrid. I can't put a 
figure to it. With your indulgence, I think our effort will be 
aided enormously if we are able to move forward with another 
resolution.
    Secretary Powell and the President engaged in discussions 
of a new resolution with many of our friends and allies last 
week in New York. The Secretary spent yesterday, and, indeed 
now, in internal deliberations with our colleagues here in the 
administration to fashion a proposal to put forward.
    If we move forward on a resolution--that would mean toward 
the end of this week--would result in much more in-depth 
consultations with particularly the 15 members of the Security 
Council. And if we are successful eventually in getting one, it 
will have several elements, two of which will directly address 
your question, Mrs. Lowey.
    One of the operative paragraphs would clearly be a call 
from the United Nations for bilateral donors to step up. And 
the second, and perhaps even more importantly, would be 
sufficient authorization, we feel, to allow the international 
financial institutions and the World Bank to make moneys 
available. Under their bylaws, as I understand it now, since 
there is not an entity, a state, they cannot move forward. But 
it is our understanding that the United Nations resolution, if 
we are successful in getting one, would allow that.
    Did we have any input to disband the army? We did have 
input. We had discussed this, interagency. In fact, we were not 
of a mind to disband the entire army at once. We were of a mind 
to decapitate it down to a certain level, and keep soldiers 
there.
    When Ambassador Bremer went into Iraq, he confronted a 
situation, I believe, which was not satisfactory. We had had 3 
weeks when nothing was going on. The situation had been allowed 
to deteriorate. Jerry stepped up and made a rather bold stroke 
and disbanded the army. And he also had a decree on de-
Ba'athification, which he would say, I believe--he has said to 
me and, perhaps, to Mr. Lewis this week--was one of the most 
popular things that he did. Now we are in the process of having 
to call some of those young men back and training them as 
facilities protection people, et cetera.
    On the question of the current planning, I guess your real 
question is, Why was it so lousy?
    We did a lot of planning, and I know, because I had to sit 
there, and I was part of the planning. And it wasn't so much 
that the assumptions were so terribly flawed. I believe it was 
that--and I have said this self-critically--there were two 
elements that I personally dramatically didn't understand. The 
first was the aura and fear of 35 years of Saddam Hussein. I 
didn't realize the corrosive nature of that on the psyche. It 
was only brought home to me when someone finally said, Well, he 
ruled three times as long as Hitler ruled Germany; you should 
have known. And I guess I should have known.
    And the second was the extent to which the society, because 
of sanctions oddly enough, had become such a criminal 
enterprise as well as a thuggish enterprise. I had no concept 
of it.
    Mrs. Lowey. Thank you very much.
    Mr. Kolbe. Thank you very much.
    Mr. Lewis. And we welcome you back from your recent visit 
to Iraq.
    Mr. Lewis. Yes. We have just come back from a very 
intensive and grueling weekend in Iraq. But an incredible, 
incredible experience. And before anybody speaks a lot about 
this subject--that is, Iraq in general and the direction we 
should be taking--I would recommend that those who would choose 
to do so involve themselves in such a trip in this kind of 
depth--while grueling, very, very important in terms of 
information base.
    I was intrigued with your being here. As David suggested, 
one of the real talents within State's operation, and I 
appreciate the work that you do. I must tell you that I would 
much prefer to come to a hearing like this and listen to your 
detailed evaluation and analysis of circumstances in 
Afghanistan or Iraq or otherwise, rather than have you speak 
for 3 minutes while we talk for a half-hour.
    But in the meantime, that is part of the process around 
here; this is the Congress. But sometimes I worry about members 
answering their e-mail while witnesses are testifying. If they 
don't testify at all, well, I guess that is okay.
    But back to another point. We spent a couple of hours in 
what was supposed to be about a half-hour meeting in a session 
with the Coalition leadership that was run by Ambassador 
Kennedy. Ambassador Bremer was back in country here; we met 
with him just before we left.
    But that session with the Coalition leadership was 
incredible in terms of its information base. There were 17 
members on this trip; each of them participated actively in the 
session. But they did so because the information--in response 
to our questions, was so good--a great job being done by those 
people in terms of recognizing that we are there to provide the 
opportunity for freedom and hopefully a government that is of 
their making, that would be designed in democratic form. But 
clearly a sense that progress is being made that is very, very 
important.
    I am concerned about Afghanistan, concerned very much about 
Iraq. But the question that I would like to pose to you is that 
very clearly over the last many years we have made many a 
mistake in a country like Afghanistan. We came together, we 
played a significant role in forcing the Soviet Union out of 
Afghanistan. And suddenly, some years later, we find ourselves 
with the Taliban; that the base of those forces that we would--
we judged to be the key elements of the war on terrorism.
    We left a vacuum following that first effort. There was no 
foreign policy over a number of years. And there is no single 
administration involved here; it covers the gamut, and the 
Congress--for we tend to respond to crises only, it seems. In 
Iraq we have got challenges that are similar; and there is 
every chance that we will leave a vacuum there once this 
immediate crisis is over.
    Would you help me with the Iraq--the Afghanistan problem 
and relate that to our challenges in Iraq?
    Mr. Armitage. You really strike a chord with it.
    First of all, this process is one that actually we--I think 
the chairman would verify this, or Secretary Powell, my 
colleagues at the State Department--enjoy. We do view it as a 
process.
    I was joking with Mr. Obey before we started. I brought a 
copy of the Constitution because the last time he questioned me 
very closely on whether I had read and understood the 
Constitution. And I know what Article I and Article II are.
    We see this as a process. That is the way we look at it. It 
is not to be feared or not to be run away from; it is to be 
enjoyed and to use it as an exchange.
    I am very troubled by my own participation in Afghanistan 
in the 1980s. I was an Assistant Secretary at the Department of 
Defense, and among my duties was, about once a quarter, to go 
to Afghanistan and to Peshawar and make decisions, along with 
our CIA colleagues, about provisions of weapons, et cetera, to 
the different--seven different groups which we were involved 
with.
    But we were so single-focused on the objective of getting 
the Soviets out and jabbing them in their soft sort of Islamic 
underbelly that we--I can't speak for the Congress, I will 
speak for us--we didn't care. That was our objective. We wanted 
to get the Soviets out. And we were left with a vacuum because 
we didn't even think about what would come next, and we 
couldn't imagine the horror of bin Laden.
    I have got a little self-criticism.
    I think having been through that, most of us don't want to 
leave it in that kind of situation again. Certainly, in 
Afghanistan, this acceleration of success is all aimed towards 
the June elections. No matter who wins, we want the Government 
of Afghanistan to feel that we were with them, we led the 
international community into the betterment of that society, 
whether it was the empowerment of women--and I would say, very 
much part of that empowerment of women is something you didn't 
mention, Mrs. Lowey, which is health and maternal health and 
cutting down the infant mortality rate, which is in this 
supplemental, which is about as empowering a thing for women as 
I can think of.
    In Afghanistan, I think we are proven. In Iraq, it is a 
much more complex situation. The whole debate we have had in 
the international community surrounding--or the major debate--
has been about how fast we turn things over to an Iraqi 
authority, hopefully, an elected authority. Our view is that 
the best chance to make this lasting is to have a constitution 
and have an election, at which time Ambassador Bremer and his 
colleagues are no longer sovereign, and Iraqis are sovereign.
    Some of our international friends want to have it tomorrow 
or next month. I defer to you, but it is a little quick. We are 
not quite ready. In that regard, the development of this 
constitution is perhaps the most important thing, because if we 
can get a non-homogeneous society to agree on a constitution, I 
think we will have really done ourselves a favor.
    Mr. Lewis. Well, Secretary Armitage, to that point, one of 
the most significant impressions of our entire group was the 
progress that is being made in Iraq, in a very, very serious 
way, with people like Ambassador Greenstock, who is a fabulous 
guy, a fellow by the name of Clayton McManaway. Their response 
was very much on target. We want to, hand in hand, take Iraqis 
down a pathway where they can build their own government the 
way they would have it.
    And the progress that is being made, relative to training 
the police force, beginning to lay the foundation for a new 
army that can secure their borders, et cetera, we hear none of 
that news. That is not even reportable. Clearly, it is not of 
interest to those who are in the public carrying forward the 
public dialogue, at least from the media side of this question.
    Little doubt that the stage is set for them to develop 
their own Constitution and a referendum, putting, I must say--I 
would like you to respond to this specifically--and Secretary 
of State suggested that this would be done in 6 months.
    I personally wonder if that is not a serious mistake to put 
a 6-month deadline when Iraqis ought to choose when they are 
ready with the presentation of their Constitution. Surely, one 
might be setting themselves up for failure, because the media 
has set a date out there and at that point in time if they 
haven't done it, if it is not ready, then obviously they are 
stumbling, incapable and a failure.
    Mr. Armitage. Yes, sir. The question of leading people to 
progress is a tricky thing, first of all because we want to do 
it as a partner, not as a patron. These are not unsophisticated 
people, and that is tough. That is a tough thing to figure out 
how to do it as a partner and not as a patron.
    On the question of the deadline, when Secretary Powell 
mentioned that he was in complete coordination with Ambassador 
Bremer and he said that he thought 6 months was sort of a 
reasonable time period and interpreted it as a deadline, the 
reason he did that was to try to give a certain sense of 
urgency to make Iraqis sit down and think about it, but he 
didn't intend to put himself in a box of exactly 6 months and 
after that it is a big failure. It is a sense of urgency that 
we want to inject, and it is for Iraqis to take control of 
their future. That does not mean in 7 months they would have 
elections. The Secretary went on further to say on one of the 
national TV shows that a year, year-and-a-half, that is more 
the whole time period that we can envision this thing taking 
place and that way it was very closely coordinated with 
Ambassador Bremer.
    I questioned the Secretary on this, knowing that someone 
would ask me about this, sir, this morning.
    Mr. Lewis. Thank you.
    Mr. Kolbe. Thank you, Mr. Lewis, Mr. Secretary.
    Mr. Obey.
    Mr. Obey. Mr. Secretary, one question on Pakistan.
    As you know, if you talk to people in the Afghan government 
around Karzai, they will tell you that it is their belief that 
the Pakistani government cooperates with them with respect to 
al Qaeda but does not cooperate with them with respect to the 
Taliban, and that Pakistan is, in fact, playing a ``did you 
believe'' game with us on the issue of the Taliban.
    I don't see how we can sufficiently bring that area under 
control until we are able to deal with both, and I see the 
gentleman who just walked in the room knows as much about this 
as anyone, Charlie, but I guess I would ask you to comment on 
that.
    Mr. Armitage. Are you asking Mr. Wilson or me, sir?
    Mr. Obey. No, I am asking you. If Charlie wants me to ask 
him, he is going to have to run again.
    Mr. Armitage. Yes.
    Mr. Obey. But I would like to know your response.
    Mr. Armitage. Your analysis of what those around Karzai say 
is exactly correct about their feelings and their feelings are 
based on several things. The major security ministries around 
President Karzai are manned by Panjshir, not all of them but 
many of them, and they have had a conflict with the government 
of Pakistan and the policy of the Pakistani government for a 
decade or more. That is one of the reasons. They would be 
springloaded to be having this opinion.
    The second is, as I have indicated, the tribal areas are 
rife with Pashtun supporters who are running across and causing 
trouble. I personally believe that President Musharraf is 
genuine when he assists us in the tribal area and he has from 
his side of the border, but I do not think that affection or 
working with us extends up and down the rank and file of the 
Pakistani security community.
    Mr. Obey. Well, I don't know how we deal with this problem 
eventually without getting better cooperation from Pakistan on 
that.
    Mr. Armitage. Absolutely.
    Mr. Obey. Better than we are getting.
    Let me ask you with respect to Iraq, and this is a 
complicated question: Who is really doing the shooting at us?
    I mean, I am sure you have some who are simply diehard 
Saddam regime supporters who are still out to nail us, and I 
would expect that some of them are outside terrorists who have 
come into the area in the turmoil and are now using the 
opportunity, and I would suspect that some of them may also be 
from the Sunni population who have run the country for years. 
They don't think that our future plans will do much to include 
them in a significant way, and how we answer that question has 
long-term implications for American policy and long-term 
implications in terms of what the American people and this 
Congress need to be prepared to face on this issue.
    Mr. Armitage. Yes.
    Mr. Obey. So what is your answer to that question?
    Mr. Armitage. I will give it to you in descending order in 
terms of numbers, as I understand. The first is what we refer 
to as FRL, which is former regime loyalists, and they included 
Baathist and obviously Sunnis who would be disenfranchised.
    Second in descending order would be foreign fighters. Let 
me be clear, I am not saying these foreign fighters are al 
Qaeda. They are not unlike the people who travel to Bosnia and 
other places--if you will allow me the expression--to make 
their bones. These foreign fighters number anywhere--estimates 
from several thousand to 1,200. There are more coming in. The 
Syrian border is quite porous, the Iranian border is somewhat 
porous. And already in captivity we have got Sudanese, Yemenis, 
a few Saudis, and I think the largest number in captivity of 
foreign fighters are Syrian.
    Third, from my point of view, is Ansar Islam, perhaps the 
most dangerous, who we believe is involved in the major 
terrorist activity. I am talking the bombings, sir, the major 
bombings.
    And lastly criminal activity. Those would be those who are 
shooting at us.
    Mr. Obey. What do you think will happen to our relationship 
with the Sunnis over time if they don't begin to feel that they 
are going to be cut into more of the deal than they appear to 
be cut in right now?
    Mr. Armitage. Well, they are cut to a certain extent into 
the governing council already, and we have to continue to make 
sure that, as we put forth our views, to have human rights, 
that they feel they are included. I can't gainsay Mr. Lewis' 
recent trip out there, but I would say I was so heartened by 
what happened yesterday and the day before where we had U.S. 
Forces and Iraqi forces together going into Tikrit, into the 
alleged hometown of Saddam Hussein, in a joint operation. These 
are the kind of things that seemed to me to indicate that some 
Iraqis are standing up and saying we are not bad guys, but it 
is like anything else. Speed is of the essence.
    Mark Twain reminded us, even if you're on the right track, 
you get knocked over if you're not going fast enough. I think 
there is some of that, too.
    Mr. Obey. And what about the question I raised in my 
opening statement? Isn't there a way that we can bring into 
that country, in terms of the reconstruction efforts, less 
ambitious technology, lower cost approaches to dealing with 
health care and to dealing with some of the other major 
reconstruction issues?
    Mr. Armitage. I think the short answer has to be yes, but I 
saw your exchange with Ambassador Bremer, Mr. Obey, last week, 
and I also saw the answers which he gave, which were good. He 
knew stuff I didn't know, and I am talking about availability 
of concrete and cement and all that. Can we do it more cheaply? 
Yes. Should we? I don't know.
    Mr. Obey. My time is limited so let me make my last point.
    What I am concerned about is that I think we are committed 
to an old way of doing things, which is very expensive because 
we are relying on these big international companies, and to me, 
we need to get into a micro approach to these problems.
    Mr. Armitage. It is a question worthy of some discussion, 
and I hope when Andrew Natsios comes up he will address it. He 
also told me something today that made me very happy, but it 
was that Bechtel, which is one of those companies, was 
employing 29,000?
    Mr. Obey. 35,000.
    Mr. Armitage. 35,000 Iraqis, which sounded pretty good to 
me. So it is a worthy question.
    Mr. Obey. Thank you.
    Mr. Kolbe. Mr. Obey.
    Mr. Secretary.
    Mr. Lewis before you came in, I acknowledged that you were 
going to be joining up, and we appreciate your being here today 
because we know some of the items in this request--Mr. Wolf, 
excuse me--deals with your subcommittee and we would like to 
recognize you now.
    Mr. Wolf. Thank you, Mr. Chairman. I am flattered that you 
thought--that you called me Jerry Lewis, and I want to share 
Mr. Lewis' comments with regard to the vacuum, too.
    Mr. Secretary, I appreciate your being here, I appreciate 
your service, not only at the State Department, but I believe 
you wore the uniform, sir, in Vietnam once or twice?
    Mr. Armitage. Four times.
    Mr. Wolf. Four times, and I want to thank you for your 
candor.
    Mr. Armitage. It is important.
    Mr. Wolf. Your candor is very important. I want to read 
today the editorial in Sunday's Washington Post, which says 
whatever one's position on the war is it would be foolish now 
to withhold the resources needed to enable the enterprise to 
succeed. And I am going to support it in its entirety, although 
I would not want my support to be viewed as I completely agree 
with everything and every way that is being done. But this is 
not the time to say we are not going to do it or we are going 
to do it only in a loan, and I would hope that the 
administration would be more open to suggestions and ideas and, 
quite frankly, more humble sometimes if there is a better idea 
that comes from some other place.
    When John Hamre went to Iraq in July, the CSIS, he came 
back with a number of recommendations. One was he said the 
Coalition must facilitate a profound change in the Iraqi 
national frame of mind. This would involve an effective 
intensive communications and marketing campaign, not the status 
quo.
    We had looked at the language and there is not a single 
dollar for a program to communicate our view. Should we not 
have something in there with regard to a major public diplomacy 
program?
    Mr. Armitage. I think it is covered in the $2.4 billion in 
the previous supplemental.
    We have had, as I have privately been able to explain to 
you when we met, a lot of angst about our left-footedness on 
the question of public diplomacy. We were very slow off the 
mark and the one who is maddest and most angry about it is the 
President of the United States. I think we have righted it 
somewhat. We are taking some programming from Kuwait, I think, 
and some plan to take some programming from Dubai and program 
it in, things of that nature. This is particularly important as 
we move into Ramadan, and people are at home and not so 
vigorously traveling in the streets.
    We have also sent new personnel out there, and I think we 
have turned a corner. But someone who had just been there 
perhaps is better informed, and we wouldn't argue at all with 
the absolute need for public diplomacy and the absolute fact 
that we were slow off the mark, but I know Ambassador Bremer 
has been all over it because the President has been all over 
it.
    Mr. Wolf. So perhaps we should put some additional money 
in, particularly to compete with al-Jazeera and some of the 
other ones.
    Mr. Armitage. There is no word that the governing council 
decided that al-Jazeera and al-Arabiya are not worthy of 
broadcasting into Iraq.
    Mr. Wolf. The other issue is, to leave this subject a 
little bit, Liberia. The United States recently voted in the 
Security Council to establish U.S. Peacekeeping forces, 15,000 
troops. Liberia is continuing to fall apart, if you have been 
reading the stories, as I know you have. We pay a large share 
of the mission there and the force will be deployed next week 
and the Department expects to receive a bill from the U.N. for 
2004 for well over $200 million. There is no money in the 
request for 2004 or in the supplemental.
    Should we not deal with that now?
    Mr. Armitage. I knew both you and Mr. Jackson are 
interested in Liberia, so I brought the latest on it. When we 
put together the supplemental, the decision was made to be 
absolutely clean and clear on Iraq and Afghanistan.
    However, I described earlier the section on $100 million 
for complex contingencies. While members of the administration 
have been up here briefing both the House and the Senate, we 
made it clear that that money, if the Congress finds favor with 
it, could be made available for Liberia or to a lesser extent 
Sudan, sir.
    Mr. Wolf. Well, that was my next question: Shouldn't we put 
something in here for Liberia? Or, okay, I am not trying to put 
you in a spot. It does seem to me that if there was a 
commitment and the bill comes and the bill would be well over 
$200 million, then the special relationship that the U.S. has 
had with regard to Liberia, the next vehicle would be in 2005.
    Mr. Armitage. Yes, and by the way, we do have FY 2005 money 
that we suggested to OMB. The bill will move forward eventually 
to both Sudan and Liberia.
    Mr. Wolf. Okay, I think I understand your answer.
    The other one is Sudan.
    Mr. Armitage. Thank you for the press release.
    Mr. Wolf. The administration has done an outstanding job, I 
think the President, you, Assistant Secretary Kansteiner, 
former Senator Danforth. The peace agreement was signed last 
Friday.
    Should the Congress not have some money in the supplemental 
to deal with an issue that has been going on for 20 years, 2.1 
million people killed, slavery? Osama bin Laden lived in Sudan 
from 1991 to 1996. I am afraid if we don't have something to 
help out here and we are using that allocation for Liberia for 
this and for that, should there not be something in here for 
that?
    Mr. Armitage. My lack of response is kind of along the 
lines of Liberia. However, on Sudan you have been very much 
part of it. We have been working so rigorously on it that I 
realized I have had to have one eye taking some money out of 
hide. We'd have to come with a reprograming, should we be so 
fortunate on the 14th or so to get a solid agreement instead of 
an initial agreement, and I would be able to move forward with 
some moneys in the south. There is an absorption question 
there, but I would be able to do that, while in the north the 
things that we would be doing would be more political, such as 
moving to a more normalized relationship. We don't need the 
sort of assistance in the north as we need in the south.
    Mr. Wolf. Well, thank you, Mr. Chairman. I thank you for 
the opportunity and, Mr. Secretary, I thank you for testifying.
    Mr. Kolbe. Thank you.
    Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman, for the time and I 
want to welcome Deputy Secretary Armitage back to our 
subcommittee.
    Deputy Secretary Armitage, I want to discuss Liberia, an 
issue that is very dear to me and many members of the 
Congressional Black Caucus, and if there is time in the second 
round I will focus more on the issues of Afghanistan and Iraq.
    As I shared with you in our last hearing, I have grave 
concerns about whether or not gunpoint democracy will actually 
work in Iraq. If this democracy is not born of and by the 
people of Iraq and as long as we have troops in Iraq, it will 
always be seen, and has the potential to be seen, as the 
oppressor's government or the government of occupation's idea 
of how we should be living.
    I am very interested in hearing your comments at the 
appropriate time for the groundswell for democracy and whether 
or not it is a generally led movement by the people to 
establish a Constitution and move in that direction, but I want 
to go to the question of timing as it relates to Liberia and 
pick up on some of the comments raised by Chairman Wolf.
    As you know, the past several months have witnessed the 
removal of Charles Taylor from the presidency of Liberia, a 
ceasefire agreement ending the civil war and the ceding of 
transitional government to bring the beginning of a democracy 
and permanent peace to Liberia.
    Liberia was still at war when your fiscal year 2004 budget 
was presented to Congress and that budget does not reflect the 
recent progress made towards peace and reconciliation.
    Through this supplemental we now have an opportunity to 
move this process forward and bring peace, security and 
democracy to Liberia and the neighboring countries. Because of 
recent positive developments in Liberia and because there is 
inadequate funding in the fiscal year 2004 foreign operations 
bill to address these developments, do you think this 
supplemental provides the only opportunity to immediately 
support the progress towards peace, security and democracy in 
Liberia?
    Mr. Armitage. No, sir, I don't. I think it is an 
opportunity with complex contingency moneys, but I don't think 
it is necessarily the only opportunity. We have already been 
able to move some moneys around internally to accommodate the 
most pressing needs in USAID, and their disaster assistance 
teams have been all over Liberia. I don't dispute your analysis 
of where we are, but we are looking right now at Mr. Blah 
leaving on, I think, the 14th and Jyude Bryant taking over the 
transitional government for 2 years. He is taking over a 
government which consists of nothing.
    Mr. Jackson. There is nobody?
    Mr. Armitage. There is nothing. It has been looted, it is 
all gone, zero, including capacity. I think in the short to 
medium term--and I stand to be corrected by my colleague Mr. 
Natsios--we are going to be spending a lot of time continuing 
to stabilize the humanitarian and the health and malaria, et 
cetera, situation.
    The humanitarian situation has been stemmed because of the 
port opening and the ships coming in and we will have to move 
gently but steadily into a rule of law and governance situation 
and some conflict resolution as well.
    Mr. Jackson. Mr. Secretary, but you are well aware, sir, 
that it will be October first of next year before this Congress 
and this committee are able to provide appropriations for 
Liberia, money needed to secure the peace in Liberia; you are 
well aware of that?
    Mr. Armitage. Yes, I am.
    Mr. Jackson. And you are telling us there is sufficient 
money available in order to secure the progress that has been 
made since this committee considered its last bill?
    Mr. Armitage. I did not say that.
    What I said is this is one vehicle but not the only 
vehicle. I did not talk about sufficiency, and I don't have any 
sense myself of how great those needs are. I suspect they are 
pretty considerable.
    Mr. Jackson. Mr. Secretary, peace and stability in Liberia 
will stabilize the whole Mano River subregion and surrounding 
countries and open the way for West Africa to become a stable, 
democratic sub-Saharan region of Africa.
    We must support the transitional government to lay the 
groundwork for free and fair elections and support the 
development of a transparent and efficient new government.
    We provided support for the ceasefire and the peace process 
and now have a transitional government in place. Our assistance 
now is needed in order to consolidate the peace, help the 
transitional government, establish the basis of a sound, 
legitimate and transparent government and prepare for 
elections.
    If we fail to act on the progress toward peace and 
stability that has been made in Liberia, do you think Liberia 
and Western Africa are in danger of becoming a potential 
breeding ground for terrorism?
    Mr. Armitage. Yes, I do.
    Mr. Jackson. Would you explain?
    Mr. Armitage. Well, it has been a terrible neighborhood and 
through the tremendous efforts of the British and ourselves 
with the support of the Congress, we have made a lot of 
progress in Sierra Leone. We have stopped the madness. The work 
that has to be done with maternal mortality and death rates of 
infants is staggering. It is the worst country in the world for 
that.
    To have the same sort of disarray next-door, almost next-
door in Liberia, would be an automatic invitation for 
terrorism.
    Mr. Jackson. But, Mr. Secretary, you do agree that this is 
a potential breeding ground for terrorism, if, in fact, I 
assume that Congress and this government does not act to secure 
the peace?
    The vehicle that is presently leaving Congress, the 
terrorism/post-Iraq reconstruction supplemental, it appears 
that this is the appropriate vehicle for addressing terrorism 
in terms of the U.S. Government's commitment to addressing 
potential breeding grounds. The President has been very public 
in his statements and his concerns that without this money Iraq 
could indeed slip into a terrorist haven, that securing 
democracy is important now.
    Mr. Secretary, it just appears, consistent with Chairman 
Wolf's concerns, that this is the appropriate vehicle as we 
advance the global war on terror to secure democracy in an area 
that you yourself acknowledge to be a potential breeding ground 
for terror.
    Mr. Armitage. Mr. Jackson, if I might try to respond. I am 
not empowered to say open up the bill, but I will tell you 
where the majority of our efforts have been and where they are 
going to go, in addition to what Mr. Natsios' excellent team is 
doing on the ground.
    This is not a secured peace, although we will hopefully 
transfer to Jyude Bryant here on the 14th or so the 
transitional government, and the reason I say that is there is 
still some instability. We are looking for a total of 15,000 
blue-helmet troops. We have 3,566 ECOWAS troops in there now. 
They will be joined within the next 10 days to 14 days by 
Bangladeshis and Irish to bring the number up to 5,000. I think 
it is in March or April, 2004 that we will be flowing other 
voluntary contributions, and we will have to pay our share of 
the peacekeeping. It is going to take about 15,000 troops, 
according to Jacques Klein, the Secretary General's Special 
Representative, so we have to do that, too. And I am not 
suggesting that we can't do two things at once, that securing 
the peace can't go hand in hand with securing the movement 
toward some sort of representational government, but I would 
say we are pushing hard on the first right now. But I am not 
arguing with you for the need.
    Mr. Jackson. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary.
    Mr. Armitage. Thank you.
    Mr. Kolbe. Before I call Miss Kilpatrick, let me note just 
in response to the questions both from Mr. Wolf and Mr. Jackson 
that there is--and the Secretary has alluded to this--there is 
the request, the item in this request, for the emergency fund 
for complex foreign crises, $100 million to support peace and 
humanitarian intervention operations to prevent or respond to 
foreign territorial disputes, armed ethnic and civil conflicts, 
proposed threats to regional and international peace and acts 
of ethnic cleansing, mass killing, or genocide. It seems like 
it is tailor made for the situation we have in Liberia.
    Just to point out that there is something available there.
    Miss Kilpatrick.
    Ms. Kilpatrick. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, again for coming and for the service that you have 
provided for this country over the years.
    Mr. Armitage. Thank you.
    Ms. Kilpatrick. This supplemental includes--and I am just 
going to read a couple of them because this is appropriations. 
I haven't heard numbers too much this morning. We need to hear 
that background.
    I, too, agree with what was said earlier. I would much 
rather have you come and give us picture because many of us 
haven't seen it, and I do want to hear from you.
    We tend to ask our own questions and not get lost in the 
total picture for this Member.
    Mr. Armitage. You are scaring me.
    Ms. Kilpatrick. I don't mean to do that.
    Mr. Armitage. Which means trouble when I go back home.
    Ms. Kilpatrick. I do not mean to do that, but this 
supplemental includes among other things $222 million to 
support a multi-ethnic national army in Afghanistan, $35 
million for the presidential protective detail, $10 million for 
rule of law projects, such as training prosecutors, judges, and 
so forth, $37 million to support a border education drive, or 
we say drive. It will probably be something else there.
    $105 million for roads, and we could go on and on.
    There are a couple areas I want to point out, $45 million 
for private sector initiatives, $40 million for schools and 
education, $28 million for 90 additional health centers.
    Iraq is about the size of California; Afghanistan something 
a little smaller. I think the American people support this 
initiative that we ought to rebuild. I think the magnitude of 
it in reconstructing Iraq and Afghanistan better than they were 
before, much better it seems to me, the way this country's 
going if we don't watch ourselves. I think my constituents or 
what I heard all the month of August and right before coming to 
this meeting today, many feel that we are really reconstructing 
both Iraq and Afghanistan to the disadvantage of our own 
country. Why are we, as was mentioned earlier, and I think my 
ranking member mentioned the word the ``optimist club.'' We 
would all like to see better, we would all like to see the best 
but also here in America as well.
    I am for rebuilding it as much as we can, but not at the 
risk of our own education, our own roads, our own health 
centers, which is what I see here.
    Please provide your perspective for me. Why are we going to 
the Cadillac when we can give them the Ford?
    Mr. Armitage. You want me to speak of Afghanistan in that 
regard or Iraq, ma'am?
    Ms. Kilpatrick. Both.
    Iraq is what----
    Mr. Armitage. Afghanistan, I don't believe, is too much of 
a Cadillac, and I will just take a second there, and then I 
will move to Iraq.
    We are talking about trying to bring health care into 
schools, to women, to people who haven't had care at all. The 
difficulty is that about 16 million Afghans live outside of any 
of the major cities, and our goal is to try to get every man, 
woman and child within about 4 to 6 hours of a clinic.
    Ms. Kilpatrick. You understand that people in America don't 
have similar situations, right? You understand in America there 
are 43 million people that don't have health care?
    Mr. Armitage. I understand very well, ma'am.
    Ms. Kilpatrick. So my point, and I heard what you said 
about Afghanistan and we do need to help them and I think 
America has said let's help them, but with over 60 percent 
saying it is not to the tune of $87 billion, and I am trying to 
understand it.
    Mr. Armitage. Yes, Mr. Obey and I, as you saw, engaged in a 
little bit of this. I think he would agree with you it is 
somewhat of a Cadillac model in Iraq. I think it is quite a 
different situation. It is quite a different situation when you 
talk about educational levels in Iraq. It is also quite a 
different situation when you talk about potential in Iraq.
    We have a lot of workto do, and so do the Afghans, to come 
up to any sort of standard, whether it is in health care or 
education. In Iraq you can have, I believe, if we are 
successful, a functioning society which can have a very 
moderating effect on the whole Middle East. And it gets to one 
of the questions the chairman alluded to in his opening 
statement, about how Iraq fits into the Middle East, and I will 
go through what our policies are in the Middle East in a 
second, but I think you have to see Iraq as part of something 
that is connected to other things.
    Ms. Kilpatrick. I do. I do, and that is the other thing 
that I am talking about.
    We were presented last week by Mr. Bremer and others, this 
is a 15-month operation, this $87 billion will last for 15 
months.
    First of all, you won't spend $87 billion in 15 months to 
do all the things that you have testified about this morning as 
well as what we heard about last week. You won't spend it. At 
the same time, it is adding to our debt. We can't invest in 
these very same things at home. It doesn't make a lot of sense. 
I want to support it. It is just hard for me to support it. You 
are not going to spend it in 15 months. You can't. There is too 
much start-up time.
    We gave you $79 billion 6 months ago. Was any of the $79 
billion that we already appropriated spent in these areas?
    I mean, I can't get any details that I want and need to 
see. That one question, $79 billion that you got in May, where 
is it?
    We didn't ask for anything. $87 billion now, you are going 
to spend it in 15 months?
    You are not going to do it. That is $166 billion.
    Mr. Armitage. You are connecting the dots. You are 
connecting them one way. I am trying to get you to connect them 
another way.
    Ms. Kilpatrick. Okay, let me do this.
    Mr. Armitage. In the foreign policy way, a success here has 
implications on every element of what is important to us as a 
nation in terms of security. It has Israel-Palestinian 
implications, I think. It has implications for WMD more broadly 
in the region.
    Ms. Kilpatrick. You mean WMD----
    Mr. Armitage. I did it deliberately, and I followed it by 
saying we are working so rigorously on other areas than in the 
IAEA, et cetera. It has implications for terrorism----
    Ms. Kilpatrick. Let me stop you. Secretary of State Colin 
Powell is in my district now, was in there last night to speak 
to my Arab community and leaders all over the Arab world and 
our Arab Chamber of Commerce International Conference right 
now, been there for 3 days. I respect and support that he is 
there.
    We have got to make the world safer and we have got to have 
peace in the Middle East, but there has got to be a balance. 
You can't have a $500 billion deficit, take general fund 
dollars that is not offset in any kind of way, and then think 
Americans are going to live the life that we are supposed to 
live and also rebuild Iraq and Afghanistan.
    You have an awesome job, Mr. Secretary. I want to support 
you. It is just hard for me to see that matching.
    Mr. Armitage. I hope you can.
    Mr. Kolbe. We have been advised that the Secretary has to 
leave shortly, but we have gotten a little bit of a stay of 
execution here so we are going to go to a second round. We are 
going to be really rigid here on the time.
    Start that clock there.
    Okay. I want to ask a question about Pakistan assistance. 
Mr. Secretary, in a recent interview with, oh, I guess it is 
ABC here, yes, ABC news, to Peter Jennings, he was asked about 
the assistance and he said there is 3 billion dollars--this is 
Musharraf's response, President Musharraf's response: $3 
billion over the next 5 years, which is $600 million per annum, 
that has been given half for military and half for the social 
center, but we don't want it for the military by the way. I 
don't want it for the military at all. Jennings: The U.S. Wants 
to give money for military affairs and you don't want it? 
President Musharraf: Yes, indeed, sir; yes, indeed.
    So my question to you, Mr. Secretary, is why are we doing 
this? Why are we pushing this money on the military side, $300 
million, when there isn't a desire apparently on the part of 
the Pakistanis to have that assistance?
    Mr. Armitage. First, Mr. Chairman, let me be clear. There 
wasn't an agreement to give $3 billion. There was an agreement 
to seek it. We could make no promise and made none to President 
Musharraf. Second, that is news to me, and I will be meeting 
with him Saturday, and I will just ask him.
    Mr. Kolbe. We will be happy to give you a transfer.
    Mr. Armitage. No, I got it.
    Mr. Kolbe. So you don't really have an answer as to why----
    Mr. Armitage. No, I was there when it was presented, and 
there was no push back, and he realized he had to have an army 
that could fight in the tribal areas against Taliban and 
others. You have raised it, and I will raise it.
    Mr. Kolbe. There is also a request for $200 million for 
debt relief.
    Can you tell us what portion of the debt, Pakistani debt, 
that would retire?
    Mr. Armitage. Yes. My ever ready staff says $200 million of 
the 2004 would reduce the debt by $500 million, or about 25 
percent of the total, Mr. Chairman.
    Mr. Kolbe. That is about 25 percent of the total?
    Okay, let me turn here to Afghanistan and I want to ask you 
about--when Ambassador Bremer talked to us about Iraq, he 
described the U.S. objectives as a strategy for reconstruction 
in Iraq, and it seems that that strategy guided--whatever we 
think of the request it guided everything that was in the 
request that he made in terms of a cohesive mix towards our 
objectives. But seeing the fact in response to an earlier 
question, when others were asked about a plan for Afghanistan, 
a vision, idea and concept, a timetable, we don't really have 
such a plan, an objective and strategy for Afghanistan. In 
fact, at the moment I believe our five top positions that are 
either vacant or about to become vacant. The Ambassador, we 
don't have an Ambassador. We don't have a Military Group 
Commander. We are about to use a U.S. Force Commander. We don't 
have a Coordinator for Coalition Assistance, and we don't have 
a USAID Mission Director there. What is going on in Afghanistan 
in terms of our policy?
    Mr. Armitage. First of all, on the question of vision I 
think we laid it out, I hope, in Bonn, and it includes the Loya 
Jirga, which has been delayed 2 months, and which I believe 
will be completed in December, which will validate a 
Constitution and international elections in June. The vision 
was to move with some urgency, but not undue haste towards 
that.
    Second, the reason Afghanistan is so complicated, I 
believe, is that we won't be successful in what we all want in 
a pluralistic society in Pakistan unless we are successful in 
Afghanistan, and vice versa. Afghanistan cannot be successful 
unless Pakistan continues in a positive direction.
    I can give you the individual answer for each of those 
people. Zalmay Khalilzad has been nominated by the President to 
be the Ambassador. He is still the Special Envoy. In his 
Special Envoy duties he is out there now.
    The DCM is brand new. The Mission Director, as you know----
    Mr. Kolbe. So this is just a coincidence? It does suggest a 
vacuum of our leadership there, or would you disagree with 
that?
    Mr. Armitage. No, the Secretary has asked me to take a look 
there. We are suggesting that we purchase, or take possession 
of rather, the buildings behind the Embassy. We make those 
office spaces and use them. The Secretary wants me to go out 
and see if we have really got this thing hung together and I am 
going to do it this week.
    Mr. Kolbe. I have a number of other questions, but I thank 
you.
    Mrs. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman, and I want at the 
outset to thank you again, Secretary Armitage, for your 
forthrightness and your openness with us. It really is truly 
appreciated.
    One of the issues that we really haven't discussed this 
morning was the administration's position that our primary goal 
in Iraq is not only the transformation of Iraq into a 
democratic government, but the transformation of the Middle 
East into a stable democratic region of the world.
    Mr. Armitage. Right.
    Mrs. Lowey. Now, this is clearly an admirable objective. 
However, I have some concerns about what we are requesting from 
our allies in the region, such as Saudi Arabia, Kuwait, et 
cetera.
    Could you discuss the participation of Saudi Arabia? For 
example, what are they doing to police their own border? Are 
they planning to attend the donor conference? What kind of 
money have they put up for this transformation in the region? 
What is their involvement, and given the complexity of our 
relationship with Iran, specifically with regard to the nuclear 
issue, could you comment on the status of their role vis-a-vis 
our efforts in Iraq and given Syria's severe complicity in the 
harboring of terrorists? Can you comment on the United States' 
assessment of Syria's role in the region? So, basically, what 
are they doing, how are they helping us? Are they in fact 
working with us or against us and what do you expect from these 
nations in the future?
    Mr. Armitage. We expect Saudi Arabia to attend the donors 
conference. I can't give you an estimate of how much they will 
come up with. We will be talking with them in----
    Mrs. Lowey. Have they contributed anything to date?
    Mr. Armitage. They certainly have to Afghanistan. I don't 
know. I will supply it for the record.
    [The information follows:]

    In addition to more than $100 million in humanitarian 
assistance already given to Iraq, Saudi Arabia has indicated 
that it intends to make a significant contribution at the 
October 23-24 Donors' conference in Madrid, possibly as much as 
$1 billion.
    Saudi Arabia has also contributed for Afghanistan, pledging 
$36 million for the Kabul--Khandahar--Herat road.

    Mrs. Lowey. And have they committed in any way to do 
anything about the debt as part of the whole debt?
    Mr. Armitage. Yes. Let me start with the debt because I 
think that is more important. When Secretary Snow was in Dubai, 
they had, I thought, a rather interesting announcement at the 
end of the meeting, where it said that all Dubai conferees 
agreed to delay any movement on the debt at the time; that is, 
to try to collect debt at the time, until the end of 2004, and 
Secretary Snow made it clear that our view is there is going to 
be a movement to radically restructure and lower the amount of 
debt.
    Mrs. Lowey. Not forgive the debt; in other words, we are 
providing $87 billion but Saudi Arabia, their neighbor----
    Mr. Armitage. If I might, we are going to be leaning on 
everybody to lower the debt, and the reason I don't use the 
term ``forgive'' has to do with international credit ratings. I 
am talking about dramatic restructurings of this, which rather 
dramatically lowers the debt. That is the direction we are 
going in, and I think that it is clearly the direction you can 
see from the communique after Dubai.
    Back to the three countries: On Saudi Arabia, they will 
participate in the conference. Their view, I think, up to this 
point is that by participating or allowing us to use their 
bases, et cetera, for the prosecution of the war, that they 
gave at the office on the counterterrorism war. Particularly 
after the May 12 bombing in Riyadh, they have been very 
rigorous with us, and they have been, as you see, losing some 
of these soldiers in these gunfights which have been taking 
place with stunning regularity.
    On the question of their side of the border, their view is 
we can't control it, but my understanding is that they have 
asked that CENTCOM patrol the other side of the border.
    On the question of Iran, as much trouble as we have on the 
nuclear question, we have a slightly different relationship 
with them on the question of Iraq. They have welcomed the 
governing council. They will participate in the donors 
conference. I hope they step up big time. They have a big 
interest in stability in Iraq, and I brought down just 
something that was rather fascinating for me in the Financial 
Times today. Minister Kharrazi, the Foreign Minister, said for 
the first time, I believe, that al Qaeda had committed crimes 
against Iran's national security by establishing cells to plot 
operations elsewhere. You are aware that we have claimed they 
have al Qaeda there, and his comments were the first public 
admission that members of the network headed by UBL were more 
than just fugitives from Afghanistan. Something is going on 
there.
    The question of Syria: They have had limited border 
controls. They have made some efforts, but not very much, and 
it is the most porous border. I cannot tell you that the 
Government of Syria is aiding these people coming. I can tell 
you that in our view they haven't done enough to stop them from 
coming in because that is the most porous border.
    Mr. Kolbe. Thank you. Mr. Lewis.
    Mrs. Lowey. Thank you.
    Mr. Lewis. Thank you, Mr. Chairman.
    During our sessions in Iraq, those portions that involve 
discussing priorities of the military, our men and women who 
are representing our military in Iraq, I was rather startled 
when I asked General Rick Sanchez what his priorities were to 
have him say that in his mind's eye the first priority to help 
us protect our troops who currently are being--we hear about on 
the news every night is to quickly get in line funding for the 
assistance side of those dollar flows to Iraq. Essentially he 
said the more there is a real understanding that we intend to 
do something about this infrastructure, intend to do something 
about retraining their police force and laid a foundation to 
transfer government back to Iraqis, that is the best way to 
protect our troops. I was really surprised to hear him say that 
and there is a significant meaning to it. Would you comment?
    Mr. Armitage. Yes, I would, sir. Almost $5 billion of the 
$20.3 billion supplemental request is almost directly related 
to security, police training and military training and 
facilities, protective training, which mainly lets our guys get 
out of that business and into the pointy edge spear business of 
hunting bad guys, and there is no question that that part of 
the supplemental is an absolute necessity to free up our guys.
    Mr. Lewis. Mr. Secretary, during our trip we spent time at 
al-Hillah----
    Mr. Armitage. Right.
    Mr. Lewis. Which is one of the killing grounds, or at that 
one spot 3,000 bodies were found and it is very apparent that 
this guy has killed, murdered, a minimum of 300,000 Iraqis, 
perhaps as many as 1.5 million. A shrine should be built 
someday to this historic tragedy.
    Beyond that, the first time I heard the challenges of child 
mortality rates in Iraq was, well, when our next witness was 
before us, but in this discussion perhaps you could help us 
document this. When they say the documentation is available, it 
is very apparent that in areas outside of his own populations 
or support base, literally child food systems were contemplated 
purposefully with water that was essentially sewage water, 
killing babies before they have a chance to really play a role 
in Iraq's future. The child mortality rates now are as bad as 
they are almost anywhere in the world in Iraq, but apparently 
before Saddam the child mortality rates were considerably 
different. I mean, literally, this regime has wreaked terror 
upon their people and going to the extent of killing children.
    Mr. Armitage. Three comments, then over to Mr. Natsios. 
Secretary Powell recently went, a couple of weeks ago, and he 
went to Halabja, and here is a guy who has been around the 
track a couple of times, seen a lot in his life, he went to 
Halabja, and he was moved. That had the same impact on him as 
you found in al-Hillah.
    I would say 300,000 is a little bit on the light side. If 
you include the number of his youth he sacrificed in a feckless 
endeavor against Iran and the amount of killing against his own 
internal opposition, I don't know but I would say that 1.5 
million is probably a much better figure.
    Finally, there is no question that in the Shia regions 
particularly, and Shia are the predominant population, there 
was a deliberate policy of disinterest and disintegration which 
led to lack of services, lack of infrastructure, lack of water, 
et cetera, et cetera. Jerry Bremer is working real hard. I 
think today, tomorrow, the next day, we are going to pass the 
pre-war levels in electricity.
    Mr. Lewis. Right.
    Mr. Armitage. We should be there. We are about 3900 
megawatts now. We need to get up to 4400.
    Mr. Lewis. Mr. Secretary, let me interpose here.
    We flew over miles and miles of territory, largely by 
helicopter. One of the things that amazed me was to see people 
on ranches and farms to run out of their homes to wave at the 
helicopters. They weren't waving because they knew they were 
Congressmen there. They were waving at American soldiers. It is 
an important point, waving at American soldiers who are 
providing some opportunity for security, which means their 
future may have some chance to be meaningful in their lives.
    Mr. Armitage. Mr. Lewis, I would suggest that the reason we 
have had such relative cooperation from the Shia is because 
they still can't believe how their life has changed. They don't 
want to mess up the thing they have got going in the direction 
that the country's going, and I think that is one reason why no 
matter how strongly they want an Islamic government or sharia 
law or separation of church and state or mosque and state, they 
do want to continue in the direction they are going.
    Mr. Kolbe. Thank you. I am going to try to get a question 
or two in before you have to leave for the remaining 
appearances.
    Mr. Armitage. Thank you.
    Mr. Kolbe. Mr. Obey.
    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Secretary, when you buy a house and you lay down the 
down payment and then you get ready to sign on the dotted line, 
you get pretty resentful if you walk in at closing and you 
discover that there are all kinds of items included in the 
closing costs that you hadn't anticipated. I think the same is 
true when the American people look at how much you are going to 
have to pay for how long for this or any other operation we 
recommend.
    At the beginning of the first Iraqi war, I asked a number 
of questions, and among those questions were these: I asked how 
long were we likely to have our troops remaining in the region 
after the war. I asked what was the total cost to American 
taxpayers likely to be by the time we total up the final bill. 
I asked what other more well-off countries in the world, in the 
region, we are going to in order to try to improve living 
conditions in the poorer countries in that region, because they 
have an obligation at least as large as ours is. Questions like 
that.
    Most of those questions were not answered. One was. That 
was the question of how much we would have to pay out and how 
much other people would have to pay for the war, and as I 
recall, about $60 billion. We paid about $5.1 billion or 
something like that, so we had a very small tab left that we 
had to actually pay for.
    Now, in this situation, we have shelled out $79 billion so 
far and we are being asked to shell out another $87 billion, 
which takes us through the next 15 months, up to the end of 
2004.
    My question is how much more, and I have asked this of Mr. 
Bremer, I will ask this of you, I will ask it of Mr. Rumsfeld, 
everybody. Somebody or everybody working together ought to be 
able to give us a ball park range of estimate.
    When this is all over and Iraq is reconstructed and the 
effort is over, how much do we think this will have cost us 
beyond the amounts that we have already paid for or the amount 
that you are asking today?
    I mean, we just need to know the rough idea of cost going 
in.
    Mr. Armitage. I am not going to be able to adequately 
address it. I will tell you what I think probably Jerry said. I 
am not sure by that time there were other things interfering.
    As I understand it, and, as we have been instructed, we are 
not intending any more supplementals for Iraq.
    Mr. Obey. But let me----.
    Mr. Armitage. Yes.
    Mr. Obey. I ask you to not do that.
    Mr. Armitage. Okay.
    Mr. Obey. Because you don't ask for a supplemental doesn't 
mean that in the next regular fiscal year appropriation you 
haven't added money to that.
    Mr. Armitage. No, sir. I was going to say that.
    Mr. Obey. Okay.
    Mr. Armitage. That it is our intention in 2005 and beyond 
that Iraq would be funded in the normal foreign ops budget 
process. How much I don't know. How long will our troops be in 
the region? I don't know. I would just ask, sir, that you think 
about the last 12 or 13 years, and I can't give you this 
calculation either, but how much did it cost us to contain 
Saddam Hussein. I don't know.
    Mr. Obey. I am not arguing whether you should or shouldn't. 
I am not one who thinks we ought to pull the plug and leave 
immediately. When you perform surgery, you don't open the 
patient up and then decide you are going to go on a two-week 
vacation, but I do want some estimate of the numbers.
    Mr. Armitage. I will work with my colleagues, sir, and try 
to provide--I can't----.
    Mr. Obey. We need it.
    Mr. Armitage [continuing].--the foreign ops numbers, sir.
    Mr. Obey. All of the numbers. We need the foreign ops 
number. We need the DOD number. I mean, they may go out of 
different spigots but it is all coming out of the same 
taxpayers' pockets.
    Mr. Armitage. And yours.
    [The information follows:]
GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT

    With respect to funding requests for Iraq reconstruction, 
we have made clear that there are no plans to request any 
supplemental money beyond the $20 billion we are seeking in the 
2004 Supplemental. In our normal budget requests for the 
upcoming years, there may be some sums for our needs in Iraq. 
At this point, however, there are simply too many variables to 
make a specific estimate of likely future costs.
    For diplomatic operations, we have received $61.5 million 
in the FY03 Emergency Wartime Supplemental Appropriation for 
the construction of an interim diplomatic facility in Baghdad. 
We also requested $35.8 million in the FY04 Emergency 
Supplemental for the Reconstruction of Iraq and Afghanistan for 
the re-establishment of a diplomatic mission in Iraq. Once the 
diplomatic mission is re-established we will have a much better 
idea of the continuing operating costs associated with the 
mission.
    With respect to other agency funding, including DOD, we 
would defer to them to answer.

    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Mr. Obey.
    Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman. Let me quickly follow 
up on a comment of what Mr. Obey just said.
    The idea of Iraq being part of the normal foreign 
operations process from my perspective is scary, given the very 
meager budgets that we debate for foreign operations in this 
Congress. It means that next year this crisis and conflict is 
going to come at the expense of malaria, Africa, and everything 
else and this committee might as well get positioned and be 
clear on what the implications of the Secretary's last 
statement are with respect to the allocation that we get in 
this subcommittee. This has to remain a supplemental or it is 
just going to create a disaster down the road.
    Let me just make a brief observation about democracy in 
Iraq. The word, ``democracy,'' Mr. Secretary, is comprised of 
two Greek words, ``demo,'' people, and ``kratia,'' strength or 
power. It means that we the people have the power to create the 
government and the laws under which we live. It also has a 
second premise, and that is that all men are created equal 
under the law.
    Pretty often quoted statement in this Congress: When in the 
course of human events it becomes necessary for one people to 
dissolve the political bands which have connected them with 
another and to assume among the powers of the Earth the 
separate and equal station to which the laws of nature and of 
nature's God entitled them a decent respect to the opinions of 
mankind require that they should declare the causes which impel 
them to this separation.
    We know the oft quoted part of the Declaration of 
Independence, we hold certain truths to be self-evident, but 
then it goes on that, to secure these rights governments are 
instituted among men, deriving their just powers from the 
consent of the governed, that whenever any form of government 
becomes too destructive of these ends it is the right of the 
people to alter or to abolish it.
    Now, in our own democratic experiment we moved to a 
democracy after the colonial experience in our country. The 
great cry taxation without representation became a mantra of 
that era, which is from my perspective a nice way of saying 
that oil revenue will pay for reconstruction in Iraq.
    Many nations have evolved from manorial and dictatorial 
governments, Great Britain, Germany and France, some African 
democracies, South Americans overcame their colonial 
experiences, but in this context we are told that the Iraqi 
people somehow are going to move to a democracy while we, a 
foreign power with more than, I guess, 200,000 or so troops in 
their country, are going to help usher in a democracy.
    My question, Mr. Chairman and Mr. Secretary, is really 
going at the heart of whether or not the democracy in Iraq that 
we seek is of, for, by the people, whether or not it is being 
derived from the consent of the governed, whether or not it is 
not just the governing council that is working on the 
Constitution or whether or not their experience from Saddam 
Hussein's brutal dictatorship is actually leading the people of 
Iraq and whether or not there are signs within and amongst the 
Iraqi people, whether it is the Sunnis or the various religious 
factions, to move towards the idea of one person and one vote, 
and that, Mr. Chairman, comes in the context of this question 
as relates to the supplemental.
    It seems to propose this supplemental that we can win the 
peace simply by providing goods and services without addressing 
the underlying fundamental tenets of democracy, the lack of 
good government and civil society. If we believe that these 
ideals are the cornerstone of a new Iraq council, that we are 
providing the necessary resources to support this cornerstone, 
and where are the voices other than the governing council and 
those that the media is constantly projecting that suggests 
that first amendment values are taking place in Iraq, allowing 
the people to express their desire for democracy in the context 
of our military involvement?
    Mr. Armitage. Thank you, Mr. Jackson. When you talk about 
our own experiment with democracy, I think it is very 
instructive to follow completely through all of the amendments 
and you see how imperfect our road to democracy was and how 
long it took us to get one man, one vote and I think that is 
instructive because democracies don't happen overnight in Iraq. 
If you look at the north, which has basically been Saddam 
Hussein free for 12 years, then you have both functioning 
services and a relatively functioning democracy. It doesn't 
look like us, but it is a system which is representational.
    In the south, you have, I believe I am correct, about 90 
percent of the villages have village councils standing up. You 
have gotten PTA standing up.
    Now, do they all look alike?
    No, sir, they do not, but the point is it is not one size 
fits all. The point I am trying to make is there is nothing 
inherently contradictory in Islam towards democracy and there 
is nothing inherently contradictory in having a heterogeneous 
society like Iraq being able to find their way to democracy. I 
am just suggesting, however, it is not something that is going 
to be pretty or happen overnight, and those are voices of Iraqi 
people who are speaking.
    Now, the governing council and the reason all his 
colleagues, Ambassador Bremer and all his colleagues, Secretary 
Powell, put so much store in a Constitution is that that is 
something that people are going to have to buy in on and 
express themselves on. If the majority of people can express 
them in a representative government embodied in the 
Constitution, then I think that is the longest ball we can 
throw in this case. That will get us the farthest.
    Mr. Kolbe. Mr. Secretary, I am getting signals from your 
staff that you have to leave. I am going to let Ms. Kilpatrick 
ask one quick question, but I know you really are behind 
schedule at this point.
    Ms. Kilpatrick. Why do I have to be quick, Mr. Chairman?
    Mr. Armitage. I am delighted to stay.
    Ms. Kilpatrick. No, I will be within my 5 minutes really. I 
want to switch to the United Nations and the awesome 
responsibility that we have undertaken as a country and the 
$166 billion that is almost committed to this effort.
    What is the United Nations asking of us in the resolution, 
one failed and we are going back with another one, 183 nations 
of the United Nations?
    What do they want? How willing are we to work with that 
body?
    Mr. Armitage. If I may, there are two major items that have 
been discussed as a sort of difference between the United 
States, and where we want to go and others. The first had to do 
with how quickly we would turn over sovereignty to Iraq and to 
Iraqis. We have had a difference of opinion which I think you 
have seen in the public discussions with France and Germany but 
they have moved a bit our way from saying turn it over 
immediately or within a month to talking about a period of 
several months.
    Many of the members of the United Nations, though not 
necessarily the United Nations themselves, have suggested a 
larger role for the U.N. The President of the United States has 
said they will have a vital role. We look forward to them 
particularly helping us as we move to the electoral process and 
getting voter registrations and lists and all of that, but it 
is hard for me to understand how the United Nations, which 
because of two terrible bombings is drawing down--they are down 
to several dozens of people now--how they would be able to take 
a greater role until they are more convinced that security is 
going to be more absolute for them.
    So we are hearing a lot of different views----
    Ms. Kilpatrick. I understand that we are going back to ask 
for another resolution. What are we asking for that is 
different from the first?
    Mr. Armitage. It will have four major elements.
    Ms. Kilpatrick. Okay.
    Mr. Armitage. One would authorize a multinational force 
under a unified command, which would be the U.S. Doesn't seem 
to be very controversial.
    Second major element would talk about the international 
financing institutions and the World Bank and the ability of 
those and the encouragement of those institutions to make funds 
available.
    Third, it would encourage bilateral donors to step up, 
particularly in Madrid, and the fourth item that has still to 
be totally worked out has to do with how and when one would 
invite the Iraqis to set their own time line for the 
development of the Constitution and the election. The reason 
that is important is because the moment those elections are 
held we are out in terms of sovereignty. We are gone.
    Ms. Kilpatrick. Is that resolution going this week to the 
United Nations?
    Mr. Armitage. Probably not. The Secretary is talking about 
it with his colleagues yesterday and today. We will start 
pretty intense discussions in New York. That is a lot different 
from, you know, laying something on the table. We are not quite 
ready for that.
    Ms. Kilpatrick. Thank you.
    Thank you, Mr. Chairman.
    Mr. Kolbe. Thank you very much, Miss Kilpatrick.
    Mr. Armitage. Did you have a question?
    Mr. Kolbe. No, Mr. Secretary.
    Your staff would strangle me if I would try to keep you 
hear one more minute.
    Mr. Armitage. I thought they worked for me.
    Mr. Kolbe. We know better than that. Mr. Secretary, on 
behalf of all of us we thank you for your very frank and open 
answers to these questions and for your willingness to take the 
time to share this information with us.
    Mr. Armitage. And I was very sincere about the process. It 
is important.
    Mr. Kolbe. And please be safe on your trip to Afghanistan.
    Mr. Armitage. Will I hear from you later today, sir?
    Mr. Kolbe. You will hear from me, but I don't think I will 
be able to make it. We appreciate it.
    Thank you very much.
    We are going to take just one minute here while Mr. Natsios 
sets up some things, I think, for his opening statement.
    Very well, while they are setting up here we will go ahead 
and begin with Mr. Natsios's remarks, and then we will go to 
questions here.
    Mr. Natsios, we welcome you as USAID Administrator here to 
talk both about Afghanistan and Iraq, and you may proceed with 
your statement and you can refer us to the charts as you feel 
necessary to do so.
                              ----------                              --
--------

                                     Tuesday, September 30, 2003.  

   PRESIDENT'S FY 2004 SUPPLEMENTAL REQUEST FOR IRAQ AND AFGHANISTAN


                                WITNESS

ANDREW S. NATSIOS, ADMINISTRATOR, USAID
    Mr. Natsios. Thank you, Mr. Chairman.
    Thank you, Mr. Chairman, for the opportunity to testify 
before the committee, which has been such strong supporters of 
our work around the world. I would like to submit a full 
statement for the committee for the record. My oral comments 
will be more limited.
    [The statement of Mr. Natsios follows:]

GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT
    
                    Mr. Natsios' Opening Stateament

    Mr. Natsios. I would like first to address three challenges 
we face in both Iraq and Afghanistan. The first is that there 
are security problems. It is indisputable there are security 
problems, but there are large portions of both countries that 
are stable and secure and where reconstruction is going on 
without the fear of warlords or the old order disrupting 
things.
    I have been twice to Afghanistan in the past 2 years. My 
deputy, Fred Schieck, whom I have assigned daily responsibility 
for Afghan programs has also visited several times. I meet 
every week for 2 hours on Afghanistan, and also have meetings 
every day on Iraq. So I am very familiar with what happens in 
both countries. I went to Iraq for 6 days in June of this year, 
so I have been to both countries directly to see what we are 
doing.
    The second misperception is that we work only in Baghdad 
and Kabul. If you look at the media, they talk about Kabul as 
though Kabul is the only city in the whole country. It is the 
case that it is hard for the media to get out of capitals and 
hence a lot of our work that is in rural areas of Afghanistan 
never gets reported on even though that is where 85 percent of 
the people live.
    The same is true in Iraq. If you read the reports and see 
where they are coming from in both the American media and 
European media, it is almost all from Baghdad.
    Baghdad may be the capital city but three-quarters of the 
population lives in other areas of the country, and those areas 
are not experiencing the kinds of things we are seeing in 
Baghdad, and our programs are spread throughout Iraq. That is 
one of the purposes of these maps, to show where our staff are 
and where our programs are in terms of the amount of money we 
are spending by province, which is this map on the right; where 
our staff is located is the map on the left. Each one of the 
icons you see there represents either contract staff or U.S. 
direct hire staff. There are 500 contract staff in Iraq and 50 
AID mission staff. Each icon represents 5 people, according to 
the key on the left chart. And the center map illustrates the 
kinds of activities going on in each region of Iraq. And the 
same thing for what you see in Afghanistan in the next chart, 
which I will go get to in a minute.
    The third challenge we face is how to convey the depth and 
extent of our programming in both countries because it is quite 
extraordinary what we have been able to accomplish, in my view, 
with our relatively small staff in a relatively limited period 
of time; 2 years in Afghanistan in terms of when our ramp-up 
began. We were actually in Afghanistan the entire time for 10 
years prior to September 11, 2001, even during the worst of the 
Taliban. We had some grants operating through the NGO community 
in Afghanistan. But in terms of actually having USAID staff in 
Afghanistan, they arrived in January 2002. Jim Kunder was our 
first mission director for the first part of 2002. First, in 
Afghanistan, we prevented a major food crisis. We furnished 
400,000 tons of food commodities through USAID's Food for Peace 
Office. After 9/11, there was a famine developing and we 
stopped it.
    We have been very strongly supportive of President Karzai's 
government. We have put in 132 expatriate advisors, technical 
trainers, in the ministries and another 890 educated Afghans. 
We inserted them in order to bring good managers with training 
in the ministries to set up a functioning government.
    Last year the wheat harvest increased by 82 percent. People 
don't talk about that. It is in the rural areas and you can't 
see it unless you go out into the fields. We have now, this 
year, the largest harvest in the history of Afghanistan. For 
two years now there have been massive increases in food 
production. We have invested a huge amount of money in the 
rural agricultural economy because 85 percent of the people are 
farmers and herders. We have made steady progress in terms of 
irrigation canal repair, building secondary roads so farmers 
get their produce to markets and new drought-resistant seed 
varieties in wheat seed that will resist droughts in the future 
and still produce some crop.
    We made steady progress in the 389 kilometer road from 
Kabul to Kandahar. You will see this if we move these down now; 
that is the middle map there. What most people don't know is 
that two-thirds of the population in Afghanistan live within 50 
kilometers of those black lines that you see there in the 
center of the map, representing the ``Ring Road.'' That is 
where most of the people in the country live. They live near 
this ring road. There is a relationship between population 
density and where roads are built. So the repair of this road 
is very important to people because that is where two-thirds of 
the people of the country live. A third of the whole country 
lives within 50 kilometers of the road we are building from 
Kabul to Kandahar. And that road was built by President 
Eisenhower, by the AID predecessor agency in the late 1950s, 
using the Corps of Engineers but managed by AID. We are 
rebuilding a road we constructed 45 years ago. And people in 
that area, by the way, know that the United States built that 
road and it was AID that built it. They remember it. The older 
people can tell you about it.
    We launched a new Afghan currency, working through the 
central bank. We were heavily involved in that and working on 
budgetary, currency and banking reforms and investment laws and 
customs duties in Afghanistan to support the central 
government's functioning over the long term.
    We printed 25 million textbooks, 10 million last year and 
15 million this year. We did this as a temporary measure but 
the ministry likes the educational curriculum so much they now 
have said they want to build on it as the permanent curriculum 
of the country. We have created incentives for girls to attend 
class because only 6 or 7 percent of girls were attending class 
before, during the Taliban. It is now up to a third. We give a 
vegetable oil supplement to families if girls stay in class in 
areas of the country where there is low attendance by girls. We 
have incentives to make sure girls are in the classrooms. We 
have trained tens of thousands of teachers. We provide a third 
of the salary of teachers in the form of food supplements, so 
that even when the salaries may not be paid one month, they 
always have their food supply paid for. Fifty thousand teachers 
are paid a ration of food.
    We built or repaired or reconstructed 203 schools from old 
schools that were wrecked, and we are going to build another 
thousand schools by 2006, a third of those this year, this 
coming fiscal year. We have rebuilt 121 health clinics and will 
do another 400 over the next 3 years. We have helped the 
Ministry of Health prepare the first national health survey and 
we rebuilt and supplied 16 of the national ministries in Kabul.
    We have also helped build radio networks around the country 
so the central government can communicate with people. 
Afghanistan is a radio culture. That is what people do in the 
evening, they listen to radio. The only public sector radio 
station we built was Radio Afghanistan. The radio stations we 
are helping construct now are all privately owned, privately 
maintained and privately funded except for the start-up cost. 
We want a vigorous privately controlled and privately funded 
radio culture, as they had before the Soviets invaded.
    All of the emergency Loya Jirgas last year were broadcast 
by radio to the entire country. Literally everybody in the 
country was listening to it in the villages. They knew exactly 
what was going on. They heard every speech, which is why I 
suspect some of the speeches were a little longer than they 
might have been otherwise.
    We are investing money to implement the Bonn Agreement and 
fund the Judicial and Human Rights Commissions and help to set 
up and rebuild the Ministry of Women's Affairs and a series of 
women's centers around the country.
    In Iraq we work under the direction of Ambassador Bremer 
and the CPA. We prepositioned food and supplied more than $400 
million worth of food to ensure there would be no food security 
crisis in the country. We sent the largest DART team from OFDA 
and AID into Iraq in the early stages. We have put 55,000 
Iraqis to work on all of the contracts.
    Now some people will say how much are you paying them. The 
average wage of people working in Iraq on these contracts, 
laborers, is $4 to $5 a day, not a huge wage, but by Iraqi 
standards that is a good wage. People are very happy with it, 
but it is getting people back to work. And to the extent people 
are working they are not shooting at our soldiers.
    We have set up a mission headquarters in Baghdad and 
offices in al-Hillah, Basra, Mosul and Irbil. And we do this 
under 45 grants and contracts through American NGOs, private 
firms and specialized United Nations agencies within the first 
5 months.
    In terms of infrastructure we have dredged and repaired the 
port of Umm Qasr. It is now what it was in the early 1980s. 
Otherwise, it had not been touched in 20 years. It is now a 
fully functioning port. We have repaired the rail links from 
Umm Qasr into the country. Basra now has almost 24-hour 
electrical service. They have not had that in 20 years. Usually 
they would have 2 or 3 hours, under Saddam, of electricity a 
day. Now they have it for most of the day. Electrical output 
nationwide is almost at 4,000 megawatts. It was at 4,400 before 
the conflict.
    We are now doing water and sanitation projects for 14.5 
million Iraqis. We have repaired 1,700 pipes in Baghdad and 
increased water flow by 200,000 cubic meters per day. We have 
rehabilitated 70 of Baghdad's 90 waste water sewerage pumping 
stations and installed 20 new generators.
    We have completed the bypass over the critical Al-Mat 
Bridge and 36 bridge assessments have been done and ordered in 
terms of importance. We have reconstructed the Baghdad 
International Airport and begun restoring telephone and 
communications around the country so the central ministries can 
talk to the people in the outlying areas.
    There are 17 priority areas in the economic governance 
area, including a new currency that AID is working on, small 
business credit, commercial legislation and national employment 
programs, banking, tax policy, micro lending and budget 
planning.
    In food and agriculture, we have bid our agriculture 
contract for agricultural reform. It will be signed by mid-
October to encourage greater domestic food production. We 
believe the Iraqis can feed the country themselves if we reform 
the economy, which was basically a Stalinist agricultural 
system prior to this.
    Mr. Kolbe. Could I suggest, I think a lot of that 
recitation, which is very important, we have here. Could we 
make this as brief as possible so we can get to questions?
    Mr. Natsios. I am almost finished. We are rebuilding 1,500 
schools; we said we would do a thousand. We have published 5.6 
million new math and science textbooks. School opens on 
Saturday, and we provided school supplies for 1.5 million 
students. And we are working on a health strategy, too.
    I know Congressman Lewis is very interested in this, and I 
would be glad to respond to questions.
    Mr. Kolbe. Thank you very much. I know Mr. Lewis has to 
leave. Let me yield to you, Jerry.
    Mr. Lewis. Thank you, Mr. Chairman. I very much appreciate 
the courtesy. Today is a crazy day and since I am walking 
punchy, half asleep, I don't know whether I am here or there.
    I was interested to know if we have plans and are 
proceeding with an effort similar to that which you described 
in Afghanistan as it relates to communications channels, radio 
kind of society. I am amazed at the number of disks on the 
roofs on the better side of Baghdad, but it is incredible about 
that change. Much of the information flows are one side of this 
whole issue. And are we talking about programs to make sure 
that propaganda is not the only, or at least one side of the 
propaganda is not the only line available for those radio 
listeners and television people.
    Mr. Natsios. The communications broadcasting is not AID's 
responsibility in Iraq, but there are three things we have 
done.
    Mr. Lewis. You have had a lot of experience with that.
    Mr. Natsios. We have had a lot of experience with that, but 
we do what Ambassador Bremer has asked us to do and that is not 
our function.
    Mr. Lewis. I would urge you to absolutely talk to his 
people about this being a priority.
    Mr. Natsios. There is a priority but they have decided who 
does what in the decision making.
    Mr. Lewis. Do you know if they are doing that?
    Mr. Natsios. They are doing it and I know this is a high 
priority of Ambassador Bremer, and to the extent he wants our 
help he certainly will have it.
    Mr. Lewis. I have this interest in health, but especially 
the water supply system. I saw you shaking your head when we 
were talking about Saddam having purposely--made an effort to 
essentially poison the children, if you will, of Iraq. What 
have we done? Describe for us the real progress we have made in 
terms of improving the availability of water systems and so on. 
You began to describe it, but what kind of money has been 
spent, how is it going, et cetera?
    Mr. Natsios. It is a high priority, needless to say, for 
health reasons and for a variety of other reasons as well. 
Industrial production, if we want to get the factories up, you 
need water. And people in 125 degree weather, which is what it 
was in June when I was there, need water or they have serious 
dehydration problems. There is a sweet water canal that goes 
from the Tigris River south to Basra that provides fresh water 
for the whole southern area. That water system is a canal of 
about 265 kilometers. It is in terrible condition. USAID's 
Bechtel contract, to sweep that out of all of the debris in it, 
starts today and it will dramatically increase the water flows 
to the south and will improve both the volume of water and 
water quality. It will also increase pressure. When water 
pressure is low, sewage seeps into the water pipes, and we need 
to get the water pressure back up to what it was 10 years ago 
so we don't have sewage water mixed with drinking water, which 
is what we have in many areas and have had in the south for a 
whole decade now. That needs to change. So that contract begins 
literally this week in that area.
    We also replaced the generators in many of the water 
pumping stations all over the country to detach them from the 
central electrical grid. Because every time the electrical grid 
went down because of sabotage, or whatever or because it needed 
to be repaired, it meant there is no water or sewerage going 
and that is a disaster. And so for security reasons and for 
health reasons, we are detaching as much of the water system in 
the large cities and the sewage treatment plants from the 
electrical grid both to free up more electricity but also for 
public health reasons. And we think that is a good thing and 
that is halfway done now in many of the large cities. And that 
will reduce the child mortality rates.
    Mr. Lewis. You refer to the success in terms of 
agricultural production in Afghanistan, kind of like at 
historic levels. One of the pieces of agriculture that has been 
of great concern to me has to do with the poppies. I am 
concerned about poppy growth and whether we are actually doing 
something about getting a handle upon that flow of--people in 
the past have said that is a French problem. Baloney, it is a 
world problem.
    Mr. Natsios. It is indeed a world problem, although most of 
the heroin goes to Western Europe. It is poisoning the whole 
region. There were 50,000 drug addicts in Iran and in Pakistan 
before the Taliban started encouraging poppy production. Now 
there are a half a million in each country. Both countries, 
particularly Iran, have the highest proportion of drug 
addiction in the world because of the Taliban. They encouraged 
this production. When I said to President Karzai, it is a 
serious problem for your neighbors, he responded, ``Not just 
our neighbors. We have horrendous levels of drug addiction in 
our own country.''
    Mr. Lewis. What is being done about it? You can spray the 
poppies.
    Mr. Natsios. The State Department runs the counternarcotics 
program. Our part of it is to do alternate development; in 
other words, to find alternate----
    Mr. Lewis. Other products. Clearly we know the profits from 
drugs aren't going to the farmers. Clearly we can make change 
there.
    Mr. Natsios. In the Helmand Valley, which is the center of 
drug production, we started a program last year, which has been 
very successful, to increase cotton production. We found out 
that once we started the program and got into commercial 
markets to go to mills in Pakistan that the price of cotton 
went up enough to actually compete with poppy production. Wheat 
production will not compete with poppy production, in terms of 
the value of it, but the production of mixed nuts, of 
vegetables, truck farming, of vineyards, raisins, that sort of 
thing, fruit, those are all exportable and competitive. And 
they do produce enough to compete with poppy, which people 
actually don't want to grow. They only do it as a last resort. 
We do have a program to provide alternatives.
    Mr. Lewis. Thank you, Mr. Chairman. I would hope we have a 
war against poppies, not just there but elsewhere. And it is 
crazy for somebody else to do it and our various agencies 
working together, it ought to be a priority.
    Mr. Natsios. We are working closely with the State 
Department on the antidrug program.
    Mr. Kolbe. Ms. Lowey.
    Mrs. Lowey. Thank you, Mr. Natsios. We appreciate you being 
here with us today. I have several questions about the 
contracting procedures and I think I will just lay them out and 
I would appreciate your response. First of all, when Ambassador 
Bremer was here with us, he talked about the agencies and the 
persons who would be administering the contract, he wasn't 
quite clear. He mentioned several different people and units, 
and that included AID. So it was clear to us that AID did not 
have the entire responsibility for the contracting. And I would 
be interested in knowing what percentage of the 15 of the 20 
for construction would be administered by AID. That is number 
one.
    Secondly, I know that you are about to issue an RFP for 
$1.5 billion for construction contracting on your own 
initiative. Will this contract be truly competitive or will you 
use the limited competition procedures used by the Bechtel 
contract? And I think it was important when Ambassador Bremer 
was here, he committed to competitive contracting for the 
entire $20 billion requested for Iraq. Again, as I mentioned 
before, there was question as to what portion of that AID would 
administer. And I would be interested how you would administer 
the funds; what form of competitive contracting will be used; 
what waivers of normal procurement will be used.
    Thirdly, in your January, 2003 determination that all 
procurement rules could be waived at your discretion for 
national security reasons still in place, do you intend to use 
that authority and, if so, how? And how will Congress and the 
American business community be kept informed of your 
contracting decisions?
    I think this is very important. Many of the businesses who 
have been contacting our offices are pleased that there are 
contracts available for them. On the other hand, there are 
those who don't have the foggiest notion about how to proceed 
in responding to a contract that may be let. So if you could 
just discuss the entire procedure, your role in it, the 
contracting methods, I would appreciate it.
    Mr. Natsios. Just in terms of the last money you gave us, 
just so people know how much of the $2\1/2\ billion that 
Congress appropriated for reconstruction in the first 
supplemental, 80 percent of it was sent to AID by OMB. We spent 
$2 billion of the $2.5 billion. The rest of that was spent by 
the State Department, Treasury and I think DOD, or to be 
maintained in a smaller reserve.
    In terms of the supplemental you have before us, we do not 
know what we will get. We are having discussions now. It is up 
to Ambassador Bremer, in consultation with OMB. Whatever the 
President wants us to do, we will do.
    Mrs. Lowey. Can I interrupt at this point? Given your vast 
experience and given your experience with the first $2 billion 
that you have administered, have you been consulted? Are you 
part of the decision making process? I would think because of 
your expertise you shouldn't be waiting for Ambassador Bremer 
to tell you what to do. I would assume you are part of the 
decision making process. Could you comment?
    Mr. Natsios. We are, but the final decisions are made by 
OMB. We are having discussions every day with them, and that is 
why we did the $1.5 billion that we just advertised.
    Mrs. Lowey. I said 1.6, it is 1.5.
    Mr. Natsios. We just advertised for bidders on the 
assumption that the new supplemental goes through. If it 
doesn't, we will take the advertisement and throw it away. We 
are presuming something will pass. And the first amount that 
Ambassador Bremer wants spent is for that contract. We figure, 
of the estimated $20 billion for Iraq in the supplemental, I 
believe that $12 billion is in the areas that we do work in. We 
are prohibited by law, for example, from doing public safety 
work. We don't do prisons. We don't do police, unless there is 
a waiver by Congress, or there are a couple of exceptions. But 
there are certain things we don't do--we don't train soldiers 
and supply weapons. So about $12 billion of the $20 billion is 
in areas that we have extensive expertise in.
    We could be asked to administer some or all of this $12 
billion, but again, I think the allocation of these resources 
is something that is under discussion and being planned right 
now, and as soon as we find out we will tell you. We will not 
exercise any national security waivers. I don't plan to do any 
of that. The contract that is up now for $1.5 billion is free 
and fair competition. It is completely open, and there is no 
restricted list. Anybody in the United States can bid who wants 
to bid. It is on our Web site. It was advertised in the Federal 
Register, as all our contracts are.
    And now I do want to add a little caveat, that if there is 
an emergency, and these do take place where peoples' lives are 
at risk, we do want to have a caveat that we come back to the 
Congress, to all of our oversight committees, and we will tell 
you if we have to do a limited competition because of an 
emergency. Before we do it, we will come to you and consult 
with the committees, or we won't do it. So nothing will happen 
except for free and full competition for any of this money that 
we administer unless we come back and tell you there is an 
emergency and if you tell us you think we are wrong, we won't 
do it. We want to talk with you and work with you in a 
completely transparent way.
    In terms of how contractors can bid, they need to look at 
the AID Web site. We have revised it so it is easier to use. 
They have to look at the Federal Register regularly. A lot of 
contractors who do federal bidding do that on a regular basis . 
We did have in the first round of contracting meetings of 
potential contractors in the Ronald Reagan Building, where our 
headquarters are, and I have to tell you we have a very large 
meeting room. I think it holds about 300 people. And, instead 
of one meeting, we had to have two meetings. And we ran those 
meetings that and answered the questions for people that wanted 
to bid.
    Mrs. Lowey. I just thought it was interesting and the 
reason I asked that question, on the front page of the New York 
Times was the announcement of a new K street firm that was 
going to help businesses respond to the RFPs. I will leave it 
at that.
    Thank you, Mr. Natsios.
    Mr. Natsios. I did read that article myself, Congresswoman, 
but I won't comment on it.
    Mr. Kolbe. Thank you very much. I will take my round at 
this point here. In regard to what you just said about the 
amount of the contracts of the bidding, the amount of the 
supplemental going to Iraq that might be used by AID, you 
performed out of the first supplemental, the 2003 supplemental 
about $1.7 billion went to you, USAID.
    Mr. Natsios. $2 billion, in total including humanitarian 
relief. 1.6 was the amount for reconstruction.
    Mr. Kolbe. And as you just pointed out, you just put 
another $1.5 billion out in the street in terms of advertising. 
How much of the $20.3 billion that is requested for Iraq do you 
think USAID could realistically contract for?
    Mr. Natsios. Well, let me first say that we can contract 
for maybe $600 or $700 million with no additional OE, or 
operating expenses. If we do not get additional OE funds, our 
systems will break. They are at their limit now. We can spend 
probably up to $5 billion prudently if we get additional OE. If 
the President instructs me to do up to the $12 billion, we will 
do what he tells us to do but it is going to be harder to do 
more than $5 billion with our existing systems within the time 
frame. There may be other people who are capable of doing some 
of these things outside of AID; I have no idea about that. I am 
answering your questions, Mr. Chairman, about what we are 
capable of doing. We think $5 billion, prudently.
    Mr. Kolbe. Is that infrastructure or is that everything?
    Mr. Natsios. That is everything. Let me go back, because 
that is a very important distinction you have made. If we have 
one giant infrastructure contract or several giant ones, it is 
much easier for those to be administered than 40 or 50 small 
contracts that are $40 or $50 million each, because we have to 
have a contract officer, at least one, maybe more, to manage 
each contract. And it is very, very time intensive when you 
have a lot of contracts. So a lot of what we can do is 
dependent on the discrete areas in which we are asked to take 
on tasks.
    Mr. Kolbe. Mr. Natsios, let me ask you about competitive 
bidding and the basic question, why has it been so difficult 
for us to get this competitive bidding done? We have, as you 
know, in our fiscal year 2004 bill a provision that requires 
full and open competition for construction contracts in Iraq. 
That bill of course is not enacted into law. And Ambassador 
Bremer says he fully supports competition. It seems it is very 
difficult to get these contracts out, the time that it takes. I 
am wondering if you could just tell me why it is that it is so 
difficult for us to run an open and competitive process for 
these contracts.
    Mr. Natsios. There are two characteristics of Federal 
contracting--by the way, this contracting law is the same for 
all Federal agencies. It is not unique to us. There is the FAR 
managed by OMB. It is the Federal Acquisition Regulations or 
FAR that implement federal contracting law. There are two sort 
of objectives of this process. One is to be efficient, to do 
things rapidly and quickly with a minimum of delays and 
bureaucracy, and second, on the other hand to be fair. If you 
do it too efficiently, a lot of smaller companies won't be able 
to bid because we could collapse the process to much shorter 
periods of time. That would exclude a large number of companies 
from bidding, which means the price goes up. So you are going 
to have a higher price and the taxpayer's money won't be well 
spent if you simply eliminate the fairness requirement and 
collapse the process so you do it in a couple of months.
    We could do that. I don't support that. I actually support 
the language that is in the bill that was before Congress. Most 
of that is what we are in fact following. It is just a 
repetition of what is in Federal law now. So bidding takes a 
while, because if you want to include a large number of 
companies bidding so you get the best price and the best 
quality you have to do it over a longer period of time. 
Typically it takes 5 to 6 months for a fair and open 
competition to take place under normal circumstances.
    Mr. Kolbe. What are your plans with regard to the 
additional money that is requested in the supplemental for 
Afghanistan in terms of competition?
    Mr. Natsios. We have competitively bid some very large 
contracts already and they are over 3 years, most of them. I 
don't remember the exact amounts, but they are between $125 and 
$150 million over 3 years. We will use some of the money in 
this budget to fund some of these existing programs. We did the 
bids already. They are in place. It was full and fair 
competition in some cases and in other cases, it was a more 
truncated process. Some of the money flows through UN agencies 
and NGOs that are not competitively bid. There are emergency 
grants or transition grants where we get an unsolicited 
proposal and we decide whether or not we like it, and whether 
to fund it. That is the nature of a lot of the NGO grant making 
that we do. Grant making is distinguished in process from the 
contracting process. But we can give you a complete plan and 
will be happy to show you where we will spend all of the money 
and how it will be allocated.
    Mr. Kolbe. I will have more questions, but let me turn to 
Ms. Kilpatrick.
    Ms. Kilpatrick. Good afternoon, Mr. Natsios. A couple of 
questions. You mentioned contract staffing, about 500. Are 
those people in the country? Who are those 500 contracting 
employees?
    Mr. Natsios. Well, if you want----
    Ms. Kilpatrick. I don't want names.
    Mr. Natsios. They are not all Americans. Some of them are 
from other countries, but they are expatriates, from outside of 
Iraq. And these people are people who work for the contractors 
or grantees, for Bechtel, for DAI, for UN agencies who we are 
paying for through our grant making or through NGOs. There are 
100 NGO expatriate workers in Iraq and they are working under 
grants almost exclusively from AID, and those peoples' salaries 
are being paid for by our grant money.
    Ms. Kilpatrick. You mentioned the vegetable oil supplement, 
as well as the 50,000 teachers who are receiving food rations. 
Those are incentives for them to teach and do whatever else? Is 
that why we do that?
    Mr. Natsios. That is correct. In many areas of the country 
it is very difficult to get salaries because they are up in the 
mountains, and it is very difficult for the government to 
provide a regular salary, but we have food stocks all over the 
country. So we want to make sure that teachers go to school to 
teach, and one way of doing that is saying that even if your 
salary doesn't arrive in a particular month, you can get a food 
ration.
    Ms. Kilpatrick. You were going over a detail that this 
Member has not seen which may help me grasp some of the things 
you are doing and asking for. I am sure the chairman and 
ranking member receive that information. You mentioned a litany 
of things.
    Mr. Natsios. It is in this publication.
    Ms. Kilpatrick. I think that is helpful to know that 
because when you come in asking for X amount of dollars, show 
me something, like what you will spend it on. Micro-credits. I 
am advised that the micro credit that is administered by USAID, 
now the CPA is going to. Are they now going to take the micro 
credit program and implement it themselves?
    Mr. Natsios. I think there is a great interest within the 
CPA by Peter McPherson, who used to be AID Administrator in the 
early 80s. He is considered by many to be the godfather of the 
micro credit lending program.
    Ms. Kilpatrick. Left Michigan State for this assignment.
    Mr. Natsios. He has returned now. He has arrived back at 
Michigan State and said he got a gift because his football 
team--I won't mention who they defeated, but they weren't 
supposed to defeat them and they did, another Midwestern 
college. But Peter is deeply interested in microfinance issues. 
So he worked with our staff. And Charlie Greenleaf who also 
works at CPA, used to be head of the Africa Bureau of USAID in 
the Reagan administration.
    Ms. Kilpatrick. Why is USAID not doing this?
    Mr. Natsios. We are working on this. One of our areas is to 
work in micro lending and we have been working with the CPA 
staff on the design of how this will look.
    Ms. Kilpatrick. Are you turning it over to them? Yes, you 
are the experts in it. I know Peter very well. The godfather I 
might say who when he was with USAID was working with micro 
credits. What association with the CPA who are appointed 
politically, what experience and knowledge will they have? Are 
you training them now to turn over the micro credit program?
    Mr. Natsios. I think there is a misunderstanding on this 
topic. CPA is basically a decision making body on policy 
issues. And we have our USAID staff embedded in CPA. AID's 
mission director reports to Ambassador Bremer, but our people 
go to meetings all day. Some of the meetings we run ourselves 
at his request. There are task forces across all departments 
and he chooses different people to run them and some of them we 
run. But our people--our technical people--participate in them. 
Once a decision is made, he will choose an institution to 
administer a contract or a grant, to carry out the policy 
decisions that CPA has made. CPA does the policy ``umbrella'' 
work. And, frequently, 80 percent of the money that I have just 
mentioned has been spent by AID. He will come back to us and 
say now we want USAID to implement this or Treasury or the 
State Department, and in some cases DOD.
    Ms. Kilpatrick. The answer to my question is USAID is not 
relinquishing the micro credit program?
    Mr. Natsios. Not so far as I know, unless some decision has 
been made that I am not aware of, and I will check on that.
    Ms. Kilpatrick. Of the $2 billion that you got in the first 
round, how many small, minority, and disadvantaged companies 
received contracts?
    Mr. Natsios. It depends which contract. There are about 45 
contracts and grants through which that $2 billion was spent.
    Ms. Kilpatrick. 45 different contractors?
    Mr. Natsios. And NGOs. And we are about to award university 
contracts.
    Ms. Kilpatrick. Can you provide the information? Thank you 
very much.
    Mr. Kolbe. Thank you, Ms. Kilpatrick. We have been joined 
by Congressman Wicker.
    Mr. Wicker. Thank you, Mr. Chairman. Having just gotten 
here from the airport, I want to thank the committee and the 
witness for sticking around. Let me ask you, Administrator, 
about land titling and the reports that we have concerning 
widespread forcible land occupation in Afghanistan, 
profiteering by warlords and other strong men perhaps in the 
government. The supplemental includes a request for $10 million 
in economic support funds for land titling. I would like for 
you to discuss that, please, for the subcommittee.
    First of all, are you aware of the reports and concerns 
about land grabbing?
    Mr. Natsios. Afghanistan is a very traditional society in 
that the sheiks, who are the aristocracy of the country, 
traditionally own land. The principal source of wealth in the 
country is land and they will traditionally rent it to farmers, 
who then pay a portion of the proceeds of the farm to the owner 
of the land. That is the system that has been in place for 
centuries. So a large part of the land, it is already clear who 
owns it and I don't think it is in dispute. There was a land 
dispute in the capital city where a couple of ministers 
attempted, apparently, to provide or to take some of the land 
and give it to their friends. President Karzai found out about 
it and disciplined them and took the land away and it went back 
to the owners. So I think this was limited, so far as I know, 
to Kabul.
    There is a case involving refugees who left sometimes 20 
years ago to go to Pakistan primarily but also some to Iran who 
are now returning. They started returning last year. They first 
went to Kabul or suburban areas to live in makeshift shelters 
and now they are going back to their villages and they are 
finding people on the land they used to own 20 years ago. There 
are disputes because there is no land registry as we would 
traditionally know it. However, in the villages, people know a 
certain piece of land has been in one family for the last 500 
years.
    In some cases because of the enormous disruption that the 
last 25 years of chaos has caused in Afghan society, a lot of 
that system has been disrupted and we need to reestablish it 
because people do not invest in their land if they are unclear 
as to who really owns it. They will not build irrigation 
ditches. They will use it and that is it. They won't improve 
it. And we need to have the farmers begin to improve their land 
to increase production. Land titling is directly related to 
productivity.
    Mr. Wicker. I agree with that last statement that you 
expressed. So is the $10 million requested going to be used in 
Kabul and in these villages that you talked about?
    Mr. Natsios. I think it is primarily to help reform the 
national registry so it is comprehensive, fair and accurate. It 
is not now, and it needs to be upgraded.
    Mr. Wicker. How are we going to ensure that it is fair and 
accurate? What are your plans?
    Mr. Natsios. I can give you the plans if you wish. But in 
summary we have done this in many countries all over the world. 
Property rights is a very important part of AID's program and 
has been for a long time. Even though it is not well known, our 
economists realized years ago if you want productivity 
increases in a country you have to have property rights 
protected or people won't invest.
    Mr. Wicker. I like to ask questions about that and I 
mentioned the great pioneer Hernando DeSoto, who has been a 
champion all over the Third World in that regard.
    Mr. Natsios. And we have been his strongest supporter in 
the world, and I am sure he would tell you that.
    Mr. Wicker. I wish you luck in that respect. With regard to 
the land that has traditionally been owned by the sheiks, is it 
going to be our position that that type of control and 
ownership should end or be phased out or are we leaving that 
with the foreseeable future?
    Mr. Natsios. There is a sovereign government in Afghanistan 
and that is a decision they need to make. Our role is first to 
provide the alternatives for them to think about and the 
consequences of each alternative. We can point out that they 
choose a certain policy option, this is what will happen, 
economically, politically in terms of business, and then they 
make the decisions. We don't make the decisions for them. We 
are a technical support agency. One thing they tell us they do 
want and need is this land titling registry in Kabul for the 
country.
    Mr. Wicker. Do you happen to know President Karzai's 
position on that question? Would he like to move to a system 
where the sheiks don't control the land as they have 
traditionally? I understand and appreciate what you say about 
the fact that it should be the Afghan government who makes this 
decision and not people inside the Beltway and Washington, 
D.C., but do you have any idea how the government or the 
President stands on that issue?
    Mr. Natsios. The President is a very strong supporter of 
productivity measures and he has had discussions with us before 
about doing this everywhere because he understands the 
connection between the creation of wealth and the elimination 
of poverty and the protection of these legal rights. It is part 
of a society that operates by rule of law. Uniform commercial 
codes have these property rights in them and we do this sort of 
work all over the world.
    There is a provision I am told in the new Constitution on 
property rights that will help ensure people's rights are 
protected. But what I could do, Congressman, is get back to you 
with some more detail in this.
    Mr. Wicker. I appreciate when you get back to me. Mr. 
Chairman, do I have time to ask another quick question?
    Mr. Kolbe. In the next round.
    Mr. Wicker. Looks like my chances are pretty good for round 
2. Thank you, Mr. Chairman.
    Mr. Kolbe. Let me ask--Mr. Wicker, why don't you--if you 
have one other question why don't you get it out of the way 
now.
    Mr. Wicker. If you could, on our NGO friends, I understand 
that they are coming under attack in Afghanistan and Iraq as 
never before. And I just wonder if you could tell me what--do 
you have any new and special concerns about the security of 
these nongovernmental organizations and are they being targeted 
more than we have seen in the past?
    Mr. Natsios. I would not say that this is worse than any 
time ever in the past. I ran the humanitarian relief effort in 
Somalia 10 years ago. It was much worse than anything in 
Afghanistan or anything in Iraq. Our people were regularly 
being kidnapped and held for ransom. This was in 1992.
    Is this the optimum level of security for the NGO staff? 
No. There are problems. But the problems are geographically 
constrained. The southeastern part of Afghanistan right now is 
the most insecure for the NGO community and NGO workers. And if 
you plotted the incidents on maps, which we do, you would see 
that that area of Afghanistan is the most difficult for us to 
work in right now. And it also happens to be the center of 
Taliban and al Qaeda power and that goes back 10 years. It is 
not a surprise. In the center of the country, in the northeast, 
in the west, it is relatively stable and we are not having 
security incidents.
    Mr. Wicker. Thank you very much. And thank the chairman for 
his indulgence.
    Mr. Kolbe. Thank you, Mr. Wicker, and pleased you could 
join us.
    Mr. Administrator, you talked about the fact that Umm Qasr 
is operating as a port and Baghdad International Airport has 
been restored to its operational capacity. But the supplemental 
before us has another $45 million for Umm Qasr and $165 million 
for civil aviation and it says Baghdad International Airport. 
Can you tell us what these additional funds are for?
    Mr. Natsios. We did not write the CPA budget so I can't go 
through it line by line. I am not an expert on all of the 
areas. I can tell you there are costs which we have told the 
CPA about for both facilities into the future. For example we 
improved the port in terms of dredging. We have removed, I 
think, 19 sunken vessels and 250 pieces of unexploded ordnance 
and a huge amount of silt. But the river is silted up. It 
hasn't been touched in years. The best way in some areas of the 
country of moving material into Iraq is in fact up the river 
system and we can't do that. Some of that additional funding 
may well be for that work. But we also need security. The 
Gurkas are about to arrive to do security in the port of Umm 
Qasr and they will have to be paid until the fee structure is 
fully operational and there is enough commercial traffic. In 
order to pay the fees of maintaining the port, we will have to 
pay the employees and we will have to provide the security 
systems just to run it. The same thing for Baghdad airport.
    Mr. Kolbe. We don't have as much information. We will try 
to get that from the CPA people. On USAID supplemental 
operating expenses, there is an additional $40 million that is 
requested for USAID operating expenses, but we really don't 
have a detailed justification for this request. First of all, a 
question, is this in addition to the $15 million that we 
proposed in the 2004 bill that we would transfer from the Iraq 
relief and reconstruction account for operations in that 
nation. In addition to that, how much of this $40 million is 
for Afghanistan, how much for Iraq and how much are you using 
for air transport and how much for security?
    Mr. Natsios. We will give you more detail and there are 
different scenarios depending how much money we are given, how 
much the OE requirements will be. This is in addition to the 
money in the 2004 budget. The $40 million is divided 
approximately $29 million for Iraq and $11 million for 
Afghanistan. And I would say about 30 percent of it is for 
security, which we had not anticipated would be a requirement 
for us in terms of our own staff and for housing, we must 
provide for the protection of our staff and the upgrade of 
staff facilities should we be asked to do a lot more work. We 
have gone through the OE that you gave us in the supplemental 
in Iraq. We spent it now that the program is where it is.
    Mr. Kolbe. We would appreciate some additional information 
between the countries that I mentioned and the different 
functions, as I said, office space, housing, contract security, 
air transportation, those kinds of things.
    Mr. Natsios, a more general question. We talked earlier 
about procurement and contracting and competition. And can you 
tell us how your efforts regarding procurement and contracting 
would be positively impacted by the financial management 
improvements that you have been attempting to make more broadly 
at USAID. For example, what is the status of the Phoenix 
rollout?
    Mr. Natsios. The Phoenix rollout, time is ticking beginning 
last May. We began a 25-month countdown for it to be fully 
implemented in the field worldwide and we are now working on 
that and we are still on schedule to have it done whatever 25 
months are after May of 2003.
    Mr. Kolbe. That is a ways away.
    Mr. Natsios. We also have an enormous need for a new 
software system for our procurement office. The software system 
we use now is from the early '80s and we have a patchup system 
we are using now that does not function that well, especially 
given the increasing demands that are being made on AID. There 
are 19 presidential initiatives, three of them AID is 
exclusively responsible for. We will be heavily engaged in HIV/
AIDS. We may be requested to spend some of the MCA money. I 
have asked our staff to tell me what we would need to move up 
by 1 year the installment of this new procurement software 
which will help substantially, according to Tim Beans our chief 
procurement officer, our procurement officers to do a lot more 
work. And I would like to present to you a plan to speed up 
that acquisition of that software.
    Mr. Kolbe. I think we would appreciate that. I think we 
would like to see--I mean we are ramping up significantly your 
responsibilities. Your agency has tremendous new 
responsibilities and the dollar amounts that are flowing 
through in terms of procurement contracts is greatly increased. 
And if you would give us some information about the management 
systems that you think are the weakest for handling this--these 
increased challenges in our foreign policy area, it will be 
helpful for us to know where we need to support you through the 
regular appropriation process.
    Mr. Natsios. We will certainly do that, Mr. Chairman. I 
want to thank you for focusing on something that is mundane for 
some people but is so important for our staff. They are working 
weekends frequently and nights to achieve our mission. And I 
have to say I think some of them are heroes and I want to 
commend them now. You recognize that and I know Mrs. Lowey 
recognizes it, but a lot of people think that this sort of 
program work just happens. It doesn't just happen. It is our 
career officers who are making it happen, and I want to commend 
them. The more help we can get through increased OE in 
supporting our people, the easier it is to administer these 
massive increases in foreign aid spending.
    Mr. Kolbe. Last question, the administration and we the 
subcommittee have been saying all along that what we are doing 
in Afghanistan and in Iraq will not be done at the expense of 
the programs that we have elsewhere in the world both 
geographically and the functions, whether it is education, 
children's survival accounts or HIV/AIDS funding. But I just 
came back last night from Central America and certainly the--
what we are hearing down there, there are pretty substantial 
cuts going on in the AID personnel down there. And I am just 
wondering whether or not we can really--whether or not--we are 
told I think that it is the function of the personnel following 
the dollars and the dollars are flowing to Iraq and 
Afghanistan, so the personnel are going to be following that to 
handle this. So it suggests to me that we may be indeed more 
short staffed than we think and we are not going to be able to 
keep the programs we have in other parts of the world. Am I 
wrong on that?
    Mr. Natsios. I think they have either misunderstood the 
worldwide staffing template or they choose to tell you things 
that aren't quite accurate. AID has not been able to explain to 
the Congress, or OMB, or the GAO, or the IG why it has the 
number of people it has in each mission around the world. When 
I came to AID, we had a country mission with a $125 million 
development program and 5 direct hires, foreign service 
officers, in the field. We had another program with 7 direct 
hires, and a $10 million budget. And I asked the mission 
director to explain to me why you need all these people. The 
reality is that our system is so decentralized that whatever 
people ask for they get. And I said that is bad management and 
I am not going to accept that anymore. So the career people, at 
my request, created within PPC a unit to review this and we did 
it with all the bureaus. And we said we are going to allocate 
foreign officer staff worldwide based on their financial 
burden. This was before Iraq and before Afghanistan. What we 
found is that there was a misallocation of resources between 
Latin America and the Asia-Near East Bureau. Asia-Near East was 
the least staffed bureau before Afghanistan and Iraq, and the 
best staffed traditionally has been Latin America. This was not 
related to politics, but it was related to the programs we had 
there in the 1980s and early '90s for El Salvador and the 
Kissinger initiative in Central America. And the staffs were 
never sufficiently decreased after that to equal other areas of 
the world, and there were also misallocations within bureaus.
    So we now have a new staffing template. It is now signed. I 
signed it last, April or May. It is in effect. For the first 
time in 40 years we can now tell you how many we have and what 
is the basis for the allocation of staff by country and that is 
what they are dealing with. We are not talking about massive 
shifts in human resources. We have a thousand foreign service 
officers in the field and we are moving 20 from the Latin 
America Bureau into the Asia-Near East Bureau. Africa will stay 
as it is now and so will ENE. That is simply good management. 
And we will continue the staffing template regardless of what 
our pressures are. We are going to try to have an allocation 
based on the workload and size of the budget from now on.
    Mr. Kolbe. Thank you for the explanation. Ms. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman. Good segway to my 
question. Given that AID has hundreds if not thousands of 
policy experts already in place in Afghanistan and several 
major contractors mobilized and working, what is your view of 
the new plan as I understand developed by DOD and NSC to bring 
in all these new experts and senior advisors, and are you 
satisfied that the new plan acknowledges AID's crucial role in 
the reconstruction process?
    Mr. Natsios. I am satisfied of that and our staff actually 
worked on the initial planning. The NSC knows exactly because I 
presented it, how many people we have in each of the ministries 
and in what disciplines. We actually have a chart. If you want 
the chart I can show you by ministry what the person's 
technical discipline is and which contract they are being paid 
from, and also the 879 Afghans that we support as advisors. And 
I asked the ministers how helpful are these people? Are they 
important to you? And I had one of the ministers tell me, the 
nine people you have--the Afghans on my staff--are my senior 
management team and they are helping me reform the ministry. 
Can we use more help? Absolutely. This is a country that has 
been traumatized for 25 years. We don't mind technical experts 
coming in from other departments. I don't think people realize 
but we have people on our staff who come from other Federal 
agencies. There are 60 agricultural economists and scientists 
from outside USAID who have been working for us for 20 years. 
That is how we maintain our connection with technical expertise 
in other Federal departments. We have people from CDC, for 
example, who work in our agency.
    Mrs. Lowey. Following up on that, and we have been talking 
about the acceleration of the road construction in Afghanistan, 
but due to that acceleration, it is my understanding that 
critical projects to build new schools, hospitals, and clinics 
have been put on hold, and it is my understanding that the new 
plan before us calls for accelerated construction of more 
roads, as well as hospitals, clinics, schools, and even 
industrial parks.
    If you could discuss further your contracting plan to meet 
these needs, will the current contract with Louis Berger be 
extended or a new contract be let, and, given the overwhelming 
needs of the country and everyone's desire to get them help as 
quickly as possible, why wasn't this problem not foreseen; why 
didn't AID move sooner to either let a new construction 
contract or insist on more accelerated action on the 
contractor's, Louis Berger's, part?
    Mr. Natsios. I think there are several different questions 
in there.
    Mrs. Lowey. Right.
    Mr. Natsios. In terms of the supplemental, this will allow 
us to do part of the rest of the road that President Karzai, 
President Bush, the Prime Minister of Japan and the Saudi King 
announced about a year ago. At that time they promised to 
rebuild the road from Kabul, not to Kandahar, but all the way 
out to Herat, which is near the Iranian border. That would be 
about half the ring road that you see there on the map.
    Herat is the red city there on the right-hand map.
    Mrs. Lowey. Um-hum.
    Mr. Natsios. So we will be basically doing half the ring 
road--we're doing it with the Japanese and the Saudis, and not 
just America alone. Part of the road from Kabul to Kandahar is 
being done by the Japanese, and then I think the Saudis have 
put $30 million into the Kandahar-Herat part of it.
    With current funding we will be able to get the road from 
Kandahar up to probably the Helmand valley. We are doing the 
engineering studies, right now, about the extension of that. 
The actual engineering work is done by Louis Berger. Louis 
Berger is not a construction company; I mean, it is not doing 
the construction. It is hiring subcontractors to actually go 
out and do the construction work. Berger competitively bids 
that and gets the low price, and we have been doing that. We 
have been getting better prices because more and more companies 
have been entering Afghanistan to do work now. So this will 
allow us to get up to the Helmand valley, but not up to Herat, 
as I understand it from our engineers.
    In terms of the construction of schools, we have 
reconstructed 203 schools already, as of today, and we have got 
a total of 1,000 we are doing over the next 3 years, but those 
contracts were just signed, I think, in the late spring. They 
are not old contracts. They are relatively new contracts, and 
Louis Berger will do some of the engineering for some of the 
health clinics, for some of the schools and some of the rural 
agriculture, but they are just doing the construction 
management. They are not doing the actual construction. They 
will help us oversee the letting of the subcontracts for these 
other projects to be bid.
    Some of the construction that you're talking about, 
Congresswoman, will actually be done by NGOs under contract 
from Louis Berger, according to the master plan we have 
designed with Central Ministries, so it depends on the area we 
are in. If there is a construction company, we will use it. 
Whatever provides the cheapest quality or the best price, we 
will do that. But if you want, we can get more information to 
you on this.
    Mrs. Lowey. Thank you. And since my time is almost running 
out, you have discussed the programs for women, as has 
Secretary Armitage. Perhaps you want to conclude your 
presentation, or I guess my round of questioning, with your 
comments on the progress that is being made in assisting women 
in education, health needs, et cetera.
    Mr. Natsios. One of the things we are doing which I think 
is of extremely high importance, given the extremely high 
maternal mortality rates in Afghanistan--Congresswoman 
Kilpatrick mentioned earlier that she was concerned about our 
domestic requirements.
    About 10 women of 100,000 die in the United States from 
maternal mortality; in other words, from childbirth or as a 
consequence of childbirth, 10 women out of 100,000. In 
Afghanistan, in many areas it is 1,000 women who die out of 
100,000. So it is 10 in the United States and 1,000 in 
Afghanistan. It is not comparable. I mean, what we are facing, 
what we are dealing with, is a human misery index in 
Afghanistan that is probably the worst in the world. They are 
tied for the highest maternal mortality rate with Sierra Leone.
    We can't allow this to continue, and one of the things we 
are doing through the women's center system and these clinics 
we are building is to find women who come from poor families 
who need--maybe some of them being widows--who will agree to be 
trained as midwives, because if we have a system of midwives, 
in these clinics we are building around the country, we can 
reduce the maternal mortality rate substantially. And that is 
something we are doing across the country, and that is very 
important.
    Fifty percent of the women in Afghanistan are severely 
anemic, and that has an effect on child mortality and an effect 
on their own survival. So we are beginning a national campaign 
with the Ministry of Health and the NGOs to reduce the anemia 
rates in women, which is a serious problem.
    In terms of these women's centers, we just met with the 
Minister of Women's Affairs, who I am very impressed with. We 
had a wonderful discussion about what we can do to support her 
in her efforts to open these centers. We are building the 
centers for her, working with the ministry. She is telling us 
what she wants and where, and we are telling--working with the 
Ministry closely.
    We have also opened 17 day care centers in the ministries 
we have rebuilt so the women civil servants can go back to work 
and have their children cared for within the ministries 
themselves, and this has been a boon, because we don't want 
just men working in the ministries, and many women would not 
come back to work unless they had some child care for the 
children.
    Mrs. Lowey. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Kolbe. And thank you, Mrs. Lowey and Mr. Administrator, 
Mr. Natsios. Thank you very much for your patience today and 
for participating in this entire hearing. It has been a long 
hearing, but I think extremely valuable in highlighting some of 
the issues facing in this supplemental and giving us 
information to draw on as we prepare the details of this 
supplemental. And so we thank you very much for appearing 
before us.
    Mr. Natsios. Thank you for having me, Mr. Chairman.
    Mr. Kolbe. And the subcommittee will stand adjourned.
    [Questions and answers for the record follow:]

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Armitage, R. L...................................................   175
Bremer, Ambassador Paul..........................................     1
Natsios, A. S....................................................   215

                                  
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