U.S. Gen. Odierno presses case for $2B in funding to rebuild Iraq

The United States will need to provide financial assistance to Iraq for at least three more years to help build up the country’s military, according to Gen. Ray Odierno, the top U.S. general in Iraq.

“It’s very important that we continue at some level […] to provide some support,” Odierno said Wednesday at a breakfast with defense reporters.

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Odierno’s case for more U.S. funding in Iraq comes as some leading lawmakers are planning to significantly cut the Obama administration's request of $2 billion for the Iraqi security forces in fiscal year 2011.

Sen. Carl Levin (D-Mich.), the chairman of the Senate Armed Services Committee, has already decided to slash $1 billion from the request, arguing it is time for Iraq to put its own money into the military.

“Some of us feel pretty strongly about this issue: That it’s time — given the amount of money that Iraq is taking in oil revenue and the fact they cut their own defense budget in half in the parliament — it’s kind of hard to justify putting billions of dollars in for the Iraq army, OK?” Levin said during a press briefing in June when he announced his panel’s work on the 2011 defense authorization bill.

Revenues from about a dozen oil contracts will not start being significant until 2013 or 2014, when Iraq will be able to produce enough oil, according to Odierno.

He said Iraq had an “incredible” budget in 2007 when the price of oil was $130 a barrel. Iraq’s budget this year is $77 billion, and its revenue is $52 billion. About 95 percent of the revenue comes out of the oil sector, Odierno said. Overall, Iraq is running a deficit of about $13 billion. (It narrowed the $25 billion gap by applying $12 billion in previous excess funds).

Iraq is working on building its military to do external security as the United States leaves. It’s also rebuilding its oil infrastructure, which was neglected for years, and providing services to the population and sustaining a large governmental force, Odierno explained.

The $2 billion request is necessary for continuing the work on building Iraq’s border forces and the army’s strategic logistics, Odierno said.

“With us still on the ground, we can get this done quicker and more efficiently,” Odierno said.

The United States is on track to reduce its force levels in Iraq to 50,000 by August 31 and to switch from combat operations to stability operations. The U.S. military will maintain the 50,000 troop levels in Iraq through next summer. Based on an agreement with the Iraqi government, all U.S. forces will have to leave the country by Dec. 31, 2011.

Odierno acknowledged it could be difficult to keep a large funding stream for the Iraqi security forces as the United States struggles with large deficits.

“It is difficult because we have our own economic problems,” he said.

He stressed however that the Iraqi government shares the cost of building up its military. The country’s defense budget this year is $11 billion and will go to $12 billion next year, Odierno said.

Even though the United States will not have a military presence in Iraq starting in 2012, it is “in our best interest” to continue assisting Iraq in building its military not just for counter-insurgency missions but for external security as well, Odierno said.

By financially assisting Iraq with building up its military, the U.S. can sustain a “long-term partnership,” he said.

“You have an Iraq that adds to stability in the region. We have a new partner that we did not have before in a very difficult region,” Odierno said. “We have to stay engaged.”

During the next year, the U.S. military will train, advise, assist and equip the Iraq security forces; continue to conduct partner counter-terrorism operations; and assist the U.S. Embassy in Baghdad with building the civilian government in Iraq.

Iraq’s failure to form a government four months after elections is prompting some congressional concern, but leading senators on defense matters said they expected the withdrawal of U.S. troops to proceed as planned.

“The withdrawal is working well already,” said Sen. Jack Reed (D-R.I.), a senior member of the Senate Armed Services Committee.

Sen. John McCain (R-Ariz.), the top Republican on the armed services panel said the U.S. needs to stay focused and pay attention to the formation of the Iraqi government and continue to support the Iraqi government and military to “maintain their capabilities.”

McCain strongly opposes the $1 billion cut to the administration’s request and is expected to fight it when the Senate takes up the defense bill.

Beyond 2011, the United States military will continue to provide technical support as Iraq buys more U.S. weapons systems, Odierno said. Iraq has committed to buying M1A1 tanks and C-130 cargo aircraft, and the country might buy more F-16 fighter jets, he added.

Odierno is slated to become the new head of Joint Forces Command in the fall. Gen. Lloyd Austin III will take his place as top commander in Iraq.

Odierno is in town this week for a joint Defense and State Department conference on transition in Iraq.

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