point of their population size. And it does show they have political courage and personal courage, to send their forces into a dangerous and difficult part of the world. I said it represents about 23,000 troops, compared to our 130,000 troops. So I said it is not equal to ours by a long shot.

Mr. MORAN. No. And it stands in stark comparison financially and in terms of troop commitment to the original Persian Gulf war. And so we really haven't done the job in terms of making this a multinational coalition to accomplish something that should be a shared objective with every other democratic nation. And that would seem to be a reasonable expectation and request on the part of the American people.

You told us that eventually Iraq should be generating about $20 billion of oil revenue on an annual basis. That is what Mr. Bremer told us by 2005. He also said the cost of running the Iraq Government is about $15 billion. Even I can figure out that is about $5 billion left. But then you tell us that Iraq has all kinds of debt, so the American taxpayer needs to give them grant money rather than loans. But that debt was generated by France and Germany and Russia for very self-centered reasons, obviously, and much of it went into building palaces and any number of things that are hardly noble in their objectives. And as we know, a lot of those countries, they operate in areas we can't, because they are perfectly willing to give payoffs to generals and so on to get the contracts. And yet we feel that paying off that debt is more important than paying the cost to the American taxpayer of fronting this effort.

So I don't see why we can't continue to look at the possibility of this money being borrowed, with the expectation that eventually it will get repaid. Heck, the IMF and the World Bank lend money for the long term and sometimes they forgive it, but they try to get it back. But it would seem that the American taxpayer should expect no less than that. So that is a legitimate line of questioning it would seem.

FORCE RECONSTITUTION

But right now, something that is particularly troubling is that we are told that much of the uniformed services'—the military's funding requirements to reconstitute the force were not even considered by your office or OMB in the preparation of this supplemental request. As it turns out, those funding requirements were beyond the arbitrary funding level that you set. Well, that is clearly a definition of a top-down approach and it could have dire consequences, we are told, when we have to consider the risk to our readiness to meet other contingencies such as North Korea with decreased capabilities.

Now, what is the story there? We are told that the request that the armed services made was considerably more, in the range of $16 billion, to reconstitute our forces. And you granted, what, $2 billion of that in this supplemental? Are you going to ask for more money at a later stage, Mr. Secretary?

Secretary RUMSFELD. Let me respond to several of those questions. First, you are right; there is a big difference between Operation Iraqi Freedom and the Gulf War in 1990 and 1991. In 1990 and 1991, Kuwait was invaded and Saudi Arabia was threatened,

and they provided overwhelmingly the amount of money that was provided by other nations: $16 billion for Saudi Arabia, and $16 billion for Kuwait. And there were three other countries that stepped up quite smartly and they were Germany, Japan, and the UAE, UAE also being somewhat threatened.

Mr. MORAN. Last I looked, Saudi Arabia and Kuwait are still Iraq's neighbors, and Saddam Hussein would seem to be more of a threat to them than the United States.

Secretary RUMSFELD. So it was a different situation. Second, the debt that was incurred by Saddam Hussein, I agree completely, ought not to be paid by the American taxpayers.

Mr. MORAN. But you are asking them to pay, but you are not suggesting we borrow any of this money and we not use the oil revenue to pay off the cost of this supplemental.

Secretary RUMSFELD. Quite the contrary. You wouldn't want to leave the impression that any taxpayers' dollars are going to pay off Saddam Hussein's debts to any country.

Mr. MORAN. Mr. Secretary, during your testimony you cited out the amount of debt that is outstanding and that is why this needed to be grant money, unreimbursed.

Secretary RUMSFELD. My understanding is that the-I forget what it is called-the G7 has had a meeting and they have decided that any debt payments for Iraq would be put off through calendar year 2004, and that anyone involved in those meetings is thinking of the rescheduling or writing off of substantial portions of that. And I don't know, I can't speak how all these countries will ultimately make their decision. But certainly this administration does not intend that these dollars go to paying off the debts of Saddam Hussein.

Mr. MORAN. But they are going to if we don't demand them as reimbursement for the up-front cost of saving that country from his dictatorship.

Mr. YOUNG. Would the gentleman yield for one second? I would like to advise the gentleman that at the hearing that we held with Ambassador Bremer, I advised the Ambassador that the bill that we present to the Committee and to the House will include a provision that says none of the funds may be used to pay off any of Saddam Hussein's or Iraq's debts to foreign debtors.

Mr. MORAN. This is your idea and it is an excellent idea. I am not surprised you are putting it in. I am asking the Secretary why it wasn't initiated by the administration.

Secretary RUMSFELD. The administration never intended that that happen, and therefore they may very well-it is an OMB budget supplemental. I don't know whether they considered it or not, but they never intended that this money go this way. And I am sure that Chairman Young has met with nothing but support for his suggestion; is that correct?

Mr. MORAN. Do you support that language, Mr. Secretary?

Secretary RUMSFELD. I haven't read it, but I certainly agree with the principle. I just said so.

Mr. MORAN. You wouldn't have any problem if that was included in the bill?

Secretary RUMSFELD. First of all, it is not for me to decide, it is for the President and the Office of Management and Budget.

Second, you asked my personal opinion. And I answered it in that I do not believe that the funds in this bill should be used to pay Saddam Hussein's debts.

Mr. LEWIS. Thank you, Mr. Moran. Mr. Tiahrt.

REBUILDING IRAQ

Mr. TIAHRT. Thank you Mr. Chairman.

A week ago on Tuesday as I was coming into the Capitol, I heard an ABC news report on the radio on Iraq. The news radio report said there was chaos in the streets. There was limited water, sporadic power. The criminals ran the streets and the Iraqis resented our presence. In my trip over the weekend, I found that to be totally false. I found life going pretty much as usual. There was traffic on the streets. The marketplaces were open. The lights were on. There was water. Somebody was picking up the garbage. Hospitals were open. Schools were open.

I think our troops are doing a great job over there. I found the Iraqi people to be friendly, but they are struggling. They are having a hard time. And I think it would be very difficult for them to pay back a $20 billion debt when they are trying to rebuild their country from scratch. Ninety-five percent of the damage to that country was done by Saddam Hussein. Our military was very precise. The bridges were still up. The electrical power plant I visited was not hit by any bombs.

I think it is a little bit unfair for us-I mean, if we are going to say this is a loan, then we ought to be prepared to forgive it, because they won't be able to pay it back until we can get some reconstruction. But, again, I found our troop morale here and our generals are doing an excellent job over there.

I do have three questions that I would like you to respond to though. This supplemental includes money for our military to train Iraqi National Police, their Highway Patrol, their Border Patrol. Why aren't these jobs being done by the INS instead of our military, or why aren't they being done by the FBI and with people who have experience as highway patrolmen? And I didn't see much cooperation between the DOD and these other agencies, and I think that needs to be addressed by you and the administration. Second, we are being asked to rebuild these old power generation facilities like al-Durah. It was built in the late fifties and early sixties by the Germans. There are a lot better technologies out there, like our peak power plants and like our municipal plants. They are smaller, less capital investment, more efficient. It doesn't make good sense to me. It is like continuing to fly 43-year-old tankers when we should be leasing 767 tankers. I want to know why we aren't investing in new American technology in the power.

Third, currently about 4 percent of Iraq is tilled. Most of it is farmed like it was when Nebuchadnezzar ruled Babylon. They use hoes and shovels and they herd their sheep while they are on foot. They live in mud huts. And I think they are growing the wrong crops. It is basically like the central valley of California. They ought to be growing fruits and vegetables instead of wheat and corn. They are farming-very few tractors. Why aren't we including in our supplemental plans to get their resources up to the 27 or 28 percent of the country that could be tillable and supplying them

with new farm equipment that could help them feed themselves and the surrounding nations?

Secretary RUMSFELD. Congressman, first let me say that the Coalition Provisional Authority has people from practically every department and agency in the government in it. They don't walk around with a sign saying which department they are from, but there are people from Justice, there are people from FBI. There are people from State and Energy, and right down the line. And they have been there from the beginning. There are also, I might add, people from, I believe, 17 different countries that have people in the Coalition Provisional Authority. I was at one of the prisons and the man who was assisting there happened to be from Ireland.

And so there is a high degree of cooperation taking place on the ground in that country, not only among the domestic agencies but also between the CPA, the Coalition Provisional Authority, and the Central Command which is intimately involved in what they are doing.

The question of new technology versus old equipment is a dilemma. And there is a lot of people going in and looking at it and saying, gee, they can do it by just scrapping it and starting over. That is one way of doing it, but also expensive in the near term. There are a lot of very good Iraqi engineers and they are used to, over decades apparently, trying to patch together with paper clips, chewing gum, and Scotch tape and making these things work. And the question is for them, where should their resources go; what should they invest in to jump and leapfrog towards new technology?

My personal view is the place they ought to be doing it is in the oil infrastructure, because that is going to get the biggest immediate payout in terms of kicking revenue into that economy over time. They could substantially improve their revenues.

You are quite right on the water. They are water-rich. It is an impressive resource they have and it is terribly managed. An enormous fraction of it is being wasted into the ground and not being properly handled through the various acequias or whatever they call them in Iraq-I guess in New Mexico they are called acequias-but canals, ditches or what have you. The potential they have for agriculture is just enormous.

Mr. TIAHRT. Mr. Secretary, I think it is very important for the American public to know that we are fighting the battle of terrorism in the streets of Baghdad and Tikrit instead of the streets of Washington, D.C. And New York. I think for us to cut and run now, for us to not let this supplemental go through, would potentially bring that battle of terrorism back home. So, onward.

Mr. LEWIS. Mr. Wicker.

Mr. WICKER. Thank you very much, Mr. Chairman. I too, want to ask three questions. I may pause in the middle for answers, and I notice that 5 minutes lasts shorter down at this end of the table than maybe down toward the center.

Secretary RUMSFELD. It has always been so.

ADEQUATE SUPPLEMENTAL FUNDING

Mr. WICKER. Dr. Zakheim, regarding procurement, I think I agree with Mr. Dicks that we are probably not asking for enough.

But on the $5.3 billion that is not classified, of the weapons and goods needed, are we only replacing items lost during combat? If so, are we replacing all of those items or will we be using some of that procurement money to buy new items? Will anything be included in there for force protection enhancement?

Mr. ZAKHEIM. I know, sir, that there are some new items. There are some upgrades as well. And, of course, the depot maintenance is just that. And we are not fully resetting the forces here. We are doing what we can in Fiscal Year 04. It is a start and it is a significant start, but I wouldn't tell you that we are fully resetting the force right now.

BUY AMERICA

Mr. WICKER. Let me proceed into the point that has been made by several people, first by Congressman Hobson, about Buy America. And I appreciate what the Secretary said about hiring Iraqis, because I know that thousands of them were working for the government in this statist society and they need to feel that there is hope for them being employed.

But do you have an estimate, Dr. Zakheim, about how much of this procurement money will actually be spent in America-how much of it will be manufactured in America or how much of it will at least be plowed back into our economy? Because I hear economists saying we are spending $87 billion overseas, as if not a penny of it has helped Americans manufacture something or participate in employment. So if you could comment on that, or any of the three of you.

Mr. ZAKHEIM. I will have to get you the exact proportion for the record. I think it is safe to say that the overwhelming proportion of what we buy will obviously be made in this country. And I would also point out that as long as we are talking about the $20 billion program, as we are, we can in fact insist on American contractors. If, for example, there were loans involved, then the Iraqis who would be the recipients of the loans could hire any contractors they want, from anywhere they want, and that would be a serious loss to America.

Secretary RUMSFELD. If I may, Mr. Chairman, I would like to introduce Dave Oliver who is sitting behind me here. Dave was the principal Deputy Under Secretary of Defense for a number of years for Acquisition and Technology and Logistics. And he has been out in Baghdad with Ambassador Bremer, fashioning the Coalition Provisional Authority's budget and he is part of the Office of Management and Budget for Ambassador Jerry Bremer under very difficult circumstances, and we appreciate what he is doing and being here.

Mr. WICKER. If I may continue and I appreciate that, Mr. Secretary.

On Buy America and investing in American jobs and putting part of this money back into our economy, how are we doing on the $60 billion that we have already appropriated?

Mr. ZAKHEIM. Again, I would have to get you that for the record, but I think my answer would be the same; that the money that we have spent invariably is overwhelmingly spent in this country, for this country.