Democrats on Tuesday seized on a Government Accountability Office (GAO) report that found Iraq will generate more than $50 billion in a windfall budget surplus, saying the country should pay more for its reconstruction.

“It is inexcusable for U.S. taxpayers to continue to foot the bill for projects the Iraqis are fully capable of funding themselves,” said Sen. Carl Levin (D-Mich.) in a statement on Tuesday. “We should not be paying for Iraqi projects while Iraqi oil revenues continue to pile up in the bank, including outrageous profits from $4-a-gallon gas prices in the U.S.”

Despite the record surplus, Iraqi spending for reconstruction activities has been minimal. Instead, most of the money used to rebuild the country comes from U.S. taxpayers. To date, the U.S. paid approximately $48 billion for stabilization and reconstruction activities in Iraq, according to the GAO. By comparison, the Iraqi government spent only 28 percent of its $12.2 billion capital investment budget in 2007, the GAO report states. 

“This substantial increase in revenues offers the Iraqi government the potential to better finance its own security and economic needs,” said the GAO in its report, issued at the behest of Levin and Sen. John Warner (R-Va.), the two leaders of the Senate Armed Services Committee.

Warner said it is time for the Iraqis to fully assume responsibility for their own rebuilding.

At the outset of the war in 2003, Bush administration officials, including then-Deputy Secretary of Defense Paul Wolfowitz, said that Iraq’s oil wealth would pay for the reconstruction work.

A report issued last month by the Special Inspector General for Iraq Reconstruction said that a lot of the $48 billion the U.S. has spent on reconstruction has been misused or wasted.

The new GAO report on Iraqi oil revenue is “going to make a lot of American families very angry,” said Rep. Henry Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee.

“The record gas prices they are paying have turned into an economic windfall for Iraq. ... The Bush administration never should have let this happen,” Waxman added.

The Senate Armed Services Committee, in its version of the 2009 defense authorization bill, has a provision that calls for a cost-sharing agreement between the U.S. and Iraq, particularly for the training, equipping and sustaining of the Iraqi Security Forces and the costs associated with the Sons of Iraq. Levin also wants to push for stronger language prohibiting all U.S. funding for large-scale Iraqi reconstruction projects.