Lugar Opening Statement Prepared Remarks -	Biden Opening Statement Prepared Remarks -	Full Transcript -
Bolten Statement Prepared Testimony -	Wolfowitz Statement Prepared Testimony -

STATUS AND PROSPECTS FOR IRAQ RECONSTRUCTION

Hearing Before the
Senate Foreign Relations Committee

July 29, 2003

 

OPENING STATEMENT OF

RICHARD G. LUGAR
A Senator from Indiana, and
Chairman, Senate Foreign Relations Committee

 

LUGAR: This hearing of the Senate Foreign Relations Committee is called to order.

We are waiting the completion of our witness panel, but in the interest of time I'll give my opening statement and will call upon the distinguished ranking member to give his.

We know that our hearing may be interrupted by roll call votes on the energy bill that will be proceeding on the Senate floor, so we want to utilize each moment for our witnesses and for senators who will have questions of the witnesses. It's our pleasure today to welcome back Deputy Secretary of Defense Paul Wolfowitz, accompanied by General John Keane, acting U.S. Army chief of staff, and to welcome for the first time before the Senate Foreign Relations Committee, Joshua Bolten, the new director of the Office of Management and Budget.

Today the committee will continue its examination of Iraq reconstruction and how sufficient resources can be provided to ensure that we achieve our goals.

Secretary Wolfowitz -- and he is now approaching the podium, so I give this greeting personally to you -- we are particularly pleased to have the opportunity to discuss your assessment of our reconstruction efforts based on your recent visit to Iraq.

When you were here with us in May, your testimony added greatly to this committee's understanding of the resource requirements in Iraq at that time.

In subsequent hearings on Iraq, we've heard of many successes on the ground, but overall the United States mission in Iraq continues to hang in the balance. If we succeed in rebuilding Iraq, it will set off a positive chain of events that could usher in a new era of stability and progress in the Middle East. By contrast, failure could set back American interests for a generation, increasing anti- Americanism and multiplying the threats from tyrants and terrorists, and reducing our credibility.

Having visited Iraq four weeks ago with my colleagues Senator Biden and Senator Hagel, who are with me on both sides this morning, I can attest that the troops and officials in Iraq understand this urgency. I believe that most high-ranking officials and members of this Congress understand the stakes as well.

Yet because of some combination of bureaucratic inertia, political caution, unrealistic expectations left over from before the war, we do not appear to be confident about our course in Iraq. Our national sense of commitment and confidence must approximate what we demonstrated during the Berlin airlift: a sense that we could achieve the impossible despite short time constraints and severe conditions, risk and consequence.

We know, for example, that coalition efforts in Iraq must undergo further internationalization to be successful and affordable. We know that the key to most problems in Iraq is establishing security. We know that we must have far more effective means of delivering honest information to the Iraqi people. We know that our credibility with the international community and the Iraqi people will be enhanced by a multi-year budgetary commitment.

Yet we have taken inadequate policy steps toward realizing these objectives. We still lack a comprehensive plan for how to acquire sufficient resources for the operations in Iraq and how to use them to maximum effect.

LUGAR: Last week, similar concerns were outlined clearly by Dr. John Hamre and his team of experts commissioned by the Department of Defense to assess reconstruction efforts in Iraq. Their excellent report offers 32 recommendations to help solve many problems. We understand that the Department of Defense has praised this report and is beginning to implement some of these recommendations.

A major untapped resource with the potential for changing the dynamics on the ground is the international community. The United States needs to build a new coalition to win the peace. Involving other nations in Iraq will help reassure the Iraqi people that the results of our nation-building efforts are legitimate. At the same time, international involvement will reduce the burden on the United States taxpayer and help maintain the American people's political support.

Just as we call upon our military strength to win the war, we need to call on the strength of our diplomacy to overcome prewar disagreements with allies and reach a new consensus on how to ensure that Iraq emerges as a peaceful and stable nation. We may need a new United Nations Security Council resolution or some other form of international commitment to increase assistance to Iraq. We look forward to the pledging conference in October as an opportunity for all nations to commit to rebuilding Iraq. But the United States' diplomatic offensive must be in full force now.

Another idea that the administration could explore is the possibility of opening a backstopping coordinating office in Washington that mirrors the effort in Baghdad. Such an office must be structured to help cut through micromanagement and bureaucratic delays in the decision-making process. The Hamre report states, and I quote: "The Coalition Provisional Authority is badly handicapped by a business-as-usual approach to the mechanics of government, such as getting permission to spend money or enter into contracts."

Dr. Bolten, we will look to you today to explain how resources for Iraq are being managed and how they can be better managed. Our committee wants to be helpful to you in ensuring the most effective use of resources possible.

Finally, I will reiterate my observation from last week's hearing that Congress as an institution is failing to live up to its own responsibilities in foreign affairs.

LUGAR: Even as we've cited shortcomings of administration policy in responding to the extraordinarily difficult circumstances in Iraq, the Senate has allowed unrelated domestic legislative objectives to delay the far simpler task of passing the Foreign Relations Authorization Bill, for example.

This bill includes new initiatives and funding authority related to the security and productivity of our diplomats, our outreach in the Muslim world, our non-proliferation efforts, our foreign assistance and innumerable other national security priorities.

Yet politically motivated obstacles have been thrown in the path of the bill almost cavalierly as if the Congress' duty to pass foreign affairs legislation has little connection to our success in Iraq or in our war against terrorism.

Congress has also been a coconspirator with the administration in failing to advance a predictable multi-year budget for operations in Iraq that would demonstrate American vision and commitment, attract allied support and clarify the scope of our mission to the American people.

Many members of Congress have called for short-term cost estimates from the administration, but few seem willing to offer the White House a true partnership in constructing a four- or five-year budget plan that would provide a sober accounting of the needs in Iraq and the means to fund them.

Congress must focus on how we can help the administration or we will bear a large share of the responsibility for whatever failures occur.

Even in this political season, the president and members of Congress of both parties must set aside at least some of the political opportunities that are inherent in the war and its aftermath. The Founders structured Congress to be a political body, but they also expected that Congress would be able to rise above excessive partisanship to work with the president on national security issues.

We can start by making it clear that Congress will join with the administration in doing our duty and accepting the political risks in constructing a budget for Iraq.

We are grateful for the participation of our witnesses today. We look forward to an enlightening discussion, and we urge you to suggest ways we can help you achieve American objectives in Iraq.

And let me say at the outset before I yield to my colleague from Delaware that I've indicated to Secretary Wolfowitz that his statement and the statements of Mr. Bolton and General Keane, if they have them, will be made a part of the record in full, but that he should be complete in the statement that he makes to the committee today. That is he should take the time that is required to comprehensively give the experiences that you have -- that have informed your views and that move at least along the lines of some suggestions that I've made and I'm sure the distinguished ranking member will make.

The purpose of this hearing is not to cut off our witnesses at five minutes, 10 minutes, or with the time gone; it really is to hear from them, to hear fully and have an opportunity for the American people really to hear this message, which is very important, from all of you.

I call now upon Senator Biden for his statements.

 

OPENING STATEMENT OF

JOSEPH BIDEN
A Senator from Delaware, and
Ranking Member, Senate Foreign Relations Committee

 

BIDEN: Thank you very much, Mr. Chairman.

And I, too, welcome our three distinguished witnesses. We're anxious to hear from them, and I'm glad to hear you say that as usual we want to hear from you so don't truncate your statements.

We're in need of information.

I am, at least, in need of information and plans for the administration.

I'll try not to repeat some of what the chairman said, but we heard from Dr. Hamre and his colleagues last week. Both the committee as well as the Defense Department, I'm told, thought it was a solid report. But in my view, the most critical finding, and I quote is: "Iraqis uniformly express the view that the window of opportunity for the CPA to turn things around in Iraq is closing rapidly." The report went on to say, and I quote: "The next three months are critical in turning around the security situation," end of quote.

Now, I personally think this job is doable or I wouldn't have voted for us going into Iraq in the first place. I think it is doable. I think it going to require a much more intensified and urgent commitment of resources. And beyond that, I think it's going to take a lot of time, a lot of troops, and a lot of money. And when we ask you guys about how many troops and how much time and how much money, we're not naive. We're not looking for one year, seven days, and three hours. We're not looking for somewhere over billion. We're looking for an honest assessment. You all know that we're talking tens of billions of dollars, tens of thousands, if not initially, well over 100,000 troops, and more than the next year.

And so, we would like to get some honest assessment from you as to what you're thinking. Because if you're not thinking in those terms, then none of you should have your job with all due respect. If you're not thinking ahead as to what it's going to look like a year, a year and a half from now and what contingency plans are going to be required when you come to ask us for more money, more support and more time, then we're going to be put in a very difficult position.

We know everything changes. I know I love hearing you guys in the administration always say, things change rapidly. We got that, we know that, we understand that.

But what do you think? What are you planning? Unfortunately, right now, we're the only game in town. I know we have a coalition of 19 countries, but that coalition is a coalition that is a coalition of the hopeful because 90 percent of the forces on the ground are ours, 90 percent of the casualties are ours, and we're paying a vast majority of the cost of reconstruction after you discount the Iraqi funds that exist and existed before and what may come from more revenues.

And I might add, I misspoke the other day in a hearing when I indicated that it would cost $5 billion to get to a million barrels a day. The number was $5 billion to get to 3.5 million barrels a day. But the point is, there's not enough money at the front end from Iraqi oil to pay for this reconstruction.

By contrast, in Desert Storm, under Bush I, there was a real coalition -- there was several hundred thousand boots on the ground that weren't wearing American uniforms and the cost in today's dollars was about $75 billion and roughly 4/5th of that cost was paid by the people. That's what I call a coalition. That's what I call a coalition.

Now, I'm not suggesting we're going to be able to do that. But I am suggesting that what we have now is something vastly different than what the American people, I think, anticipated. I'd like to hear from the secretary about what the administration is going to do to address the situation on the ground before, as the Hamre reports says, "the window closes." Or whether or not anyone in the administration thinks the Hamre report is right about the sense of urgency, whether or not the window is closing. I guess that's going to be my fundamental question.

We all acknowledge the number one job is security. And ultimately only the Iraqis are going to be able to provide for their own security through a new Iraqi police force and a new Iraqi army. But it's going to take time to stand up those forces. In fact, it's going to take a lot longer time, in my view, than most Americans think it's going to and clearly longer than you all predicted it would at the front end. And that's OK. We all make predictions that are wrong. I've made plenty that are wrong, but the question is, what are we going to do about it?

BIDEN: I saw an op-ed piece yesterday, Mr. Secretary, that you had visited the Baghdad Police Academy. I hope they told you the same thing they told me. I've known all those guys since Bosnia. They're the best team we could put together. You put together a first-class team. These are serious people with vast experience -- vast experience.

And I hope they told you what they told Senator Lugar and they told me and told Senator Hagel, and that was that they need about 5,000 additional international police forces now, not next year, now. And they need those forces to train and to patrol with new Iraqi police forces.

I hope you saw the same display that we saw, well-intended Iraqis who are signed up to come back that almost look like the Katzenjammer Kids as they tried to parade for us. They're well-meaning. They're trying hard, but, boy, do they need a lot of work -- a lot of work.

You probably heard that it's going to take over a year to recruit and train a minimal force of 40,000. And while Ambassador Bremer hopes to recruit another 35,000 within another year, we were told in Baghdad that fully training a force to professional standards it's going to take several years. And similarly, we're talking about three years to build an Iraqi army of 40,000 strong. That shouldn't surprise us, based on our past experience. I'm not being critical, but there are the parameters in which, at least, I am dealing when I look at what the costs are going to be, what kind of help we need, what kind of time frame we're talking about.

When can Iraqis expect to have law and order? When can women leave their homes? When can people drop their daughters off at school and not sit outside the school for the entire seven hours that they're in school in an automobile waiting for school to be released, because for fear of their daughters being kidnapped or raped?

Now, that's not something -- I mean, they're rhetorical questions. You can't have an answer for that. But what conditions do we have to have existing to be able to give reasonable answers to those questions. And when will Iraqi essential services be restored? They're the questions we got asked constantly when we were there on the ground. When will we hear a message effectively communicating to the Iraqis?

When I was in Baghdad, we were on the air just four hours a day. I'm told now we're doing a lot better than that, but the programming still makes public access broadcast seem exciting. Meanwhile, Al Jazeera and the Iranians are on 24-7 with very sophisticated programming -- very sophisticated programming.

We heard from the Hamre report that we have a very, very well- funded and undermanaged operation as to how to get up on the air and actually communicate with the Iraqi people. And how can the greatest communication power in the world be on the short end of the stick here?

I ask these questions because of the yardsticks by which Iraqis are measuring us, in my opinion. The longer it takes, the more Iraqis begin to question our ability to improve their lives, the more frustration will grow toward the United States, and the more difficult it's going to be for us to stand up an Iraqi government that has legitimacy.

Like it or now, we're now perceived as the government of Iraq by ordinary Iraqis. And we're going to be judged by our ability to deliver on basic things that people all over the world expect their governments to do; security, services and an economy that begins to create jobs.

I thought it was an interesting poll I saw about 10 days ago where the Iraqi people in the poll indicated that they're prepared to have American forces there from six months to two years, by numbers well in excess of 50 percent, in order to restore order. But there's a direct correlation between the lack of order, the lack of control, the lack of services and their sufferance of having us around. But the vast majority of the Iraqi people expect us and want us to stay.

BIDEN: They want us to stay. They want us to get them up on their feet.

But the Iraqis have a hugely unrealistic expectation about the United States.

General, your guys did so well. They did so well so quickly that the Iraqis can't fathom how we could take away this vast evil that existed there that they viewed as all-powerful and omniscient and not get the lights on.

Now that's unrealistic. We pay a price for being so good at some things and for having inherited an infrastructure that is so bad and so damaged, and with actions of sabotage that every time we get some up and running it gets whacked.

And so the fact of the matter is though that these are the expectations. It all goes back to this issue of whether or not that window is wide open or it's closing, because the moment the Iraqi people conclude we're not in their interests our whole circumstance changes even more drastically than it does today in my view.

So I hope that you guys will lay out a specific plan about how we plan on making progress in the coming weeks and coming months. I also hope that you'll tell us specifically what requests you have made for international assistance and what expectations are of contributions that might be forthcoming -- how many forces, what type, how many dollars.

I note that General Myers in testimony last week said that the 30,000 troops promised by other countries, quote, "it needs to be higher than that," end of quote.

What are we doing to make that number higher?

I thought it was really important, quite frankly, the Japanese Diet decided that they were going to vote to send forces. I thought that was -- we're talking about 1,000 forces, but the symbolism of that I thought was consequential, and I congratulate the administration.

But what else are we going to do? Who have we made requests to? Are we considering a second U.N. Security Council resolution? Are we considering asking NATO formally to take over a U.S. command?

I understand in my discussions with NATO that the likelihood of them being able to free up even 20,000 troops is highly unlikely. I'm not looking for large numbers of troops; I'm looking for what you're asking for.

What are you asking for? Are we trying to change the profile of the forces on the ground?

And, Mr. Bolten, I'm pleased you've joined us today.

For almost a year the committee has tried to get a reasonable estimate as to what the operation is going to cost, or what at least the administration thinks it's going to cost in Iraq in terms of securing the country, administering it and rebuilding it.

I know the World Bank is coming in shortly with their estimates and -- but I know you have to be making your own estimates here.

We want to know what is it? What are you planning for?

I hope you can offer some answers today.

And, again, please don't waste our time or yours by saying the future is simply unknowable. We know the future is unknowable, but you can't plan a great nation's steps based on everything, quote, "being unknowable." Pick a number. Pick an idea. Pick a notion. Give us an idea of what you're thinking.

We don't expect you to give us specific figures, but as the government's chief budget officer you have to have some numbers that you're using for your planning and we'd like you to share them with us.

BIDEN: I'm glad to see that the interim Iraq budget for the remainder of this calendar year has been issued.

And in my judgment it doesn't make the scale of investments that are urgently needed to turn things around before that window of opportunity closes yet it has a $2.2 billion deficit that we finance from vested and seized Iraqi assets.

Ambassador Bremer announced last week that next year's budget will have a projected $4 billion deficit. That means you must have an idea of revenues and expenditures.

I hope you'll share that information us and I hope they can lay out a plan for making the massive investment that Ambassador Bremer says will have to be made. He says that it's going to cost us over five or six years $13 billion to keep electric production apace of demand. International groups have said it's going to cost $21 billion.

I don't know who's right. He indicated $16 billion over that same period of time to provide potable water and investments to improve health care and huge expenses in building reliable social safety net. Again, I don't know whether that's accurate, but I want to know are they the figures you all are thinking about?

Mr. Chairman, it strikes me that we have three options in Iraq.

First, we continue as we are paying the lion's share of the cost, providing the lion's share of the troops and taking nearly all of the casualties and all of the blame.

And the second is to leave and quickly let the U.N. deal with the ensuing chaos and let Iran and other neighbors intervene. That in my view would not only undermine our credibility, but it would leave us far less secure than we were prior to the war.

And the third option seems to me to be the only reasonable one. It's to bring in more countries if necessary by giving them more say. It strikes me that this is the most sensible option.

I realize the devil is always in the details, but it seems to me we should go to NATO, go to the NAC and make this a NATO operation even if it's with very few NATO forces. We should go the U.N. We should go to our Arab allies. And we should go to the EU and say that we genuinely want their help, and they have just as much if not more at stake in how this turns out.

The New York Times today has an article about Chirac and the French acknowledging how much they have at stake here.

What are we willing to give them more than -- are we willing to give them more -- not just the French, all these folks we're talking about -- more than a ceremonial role? And do we want them to genuinely share the burden?

I think we do.

But I look forward to the testimony. We all have a lot of questions. You have a full panel here, and it's because we know you folks are the ones we should be talking to and we're anxious to hear what your plans are and to give us some insight.

I thank you, Mr. Chairman.

LUGAR: Thank you very much, Senator Biden.

In consultation with the witnesses, we understand the order that all of us have determined is that Mr. Bolten would testify first, then Secretary Wolfowitz -- that General Keane would not testify but is available to ask -- respond to questions.

So we're grateful for that.

But, Mr. Bolten, would you please proceed?

 

STATEMENT OF

JOSHUA B. BOLTEN
Director, Office of Management and Budget

 

BOLTEN: Mr. Chairman, thank you.

And thank you for the warm welcome, Senator Biden, members of the committee.

I appreciate the opportunity to appear here today along with Deputy Secretary Wolfowitz and General Keane to testify on the status of and prospects for reconstruction in Iraq.

Two weeks ago, I submitted to Congress on behalf of the administration the second in a series of reports required under Section 1506 of the Emergency Wartime Supplemental Appropriations Act 2003. That report provides an update through June 30 on U.S. activities and our strategy related to reconstruction in Iraq.

Before I discuss highlights of that report, I'd like to review briefly some of the planning done prior to combat operations in Iraq which prepared the way for our current relief and reconstruction operations.

Beginning last October, a senior interagency team was convened to develop a baseline assessment of conditions in Iraq and to define sector-by-sector relief and reconstruction plans in the event of regime change in Baghdad.

BOLTEN: Beginning last October, a senior interagency team was convened to develop a baseline assessment of conditions in Iraq and to define sector-by-sector relief and reconstruction plans in the event of regime change in Baghdad.

The group included representatives from the departments of defense, state and treasury, USAID, CIA, and from the White House staff of the National Security Council, and the Office of Management and Budget. Additional agencies were called upon as expertise was needed.

The teams developed plans for immediate relief operations and longer-term reconstruction in 10 sectors: health, education, water and sanitation, electricity, shelter, transportation, governance and rule of law, agriculture and rural development, telecommunications, and economic and financial policy. Each sector was assigned a lead agency that produced an action plan with benchmarks to be achieved within one month, six months, and one year.

The president's guidance was clear. He expected to find milestones by which we could measure progress in improving the lives of the Iraqi people. As these plans evolved, administration officials briefed your staffs on this committee, who I understand made valuable contributions. As finally developed, these plans laid the foundation for the work under way today.

Consistent with our early planning, the U.S. and our coalition partners in Iraq have moved now from an emphasis on immediate relief operations to a wide variety of reconstruction activities. These activities are detailed in Section 1506 reports submitted to Congress two weeks ago, and amplified and updated in excellent remarks last week by Ambassador Bremer in briefings here in the Congress; Ambassador Bremer being the presidential envoy to Iraq and administrator of the coalition provisional authority, the CPA.

The Section 1506 Report and Ambassador Bremer's remarks reflect, first, a situation in Iraq in which, although security problems persist, widespread humanitarian disaster has thus far been averted. There is no food crisis, no refugee crisis and no public health crisis.

While disaster has been averted, enormous challenges remain as both the chairman and Senator Biden have alluded to. Most of those challenges are the product of three decades of devastation inflicted by Saddam's regime on Iraq's physical, social and economic infrastructure.

To address these challenges and restore sovereignty to the Iraqi people, the Section 1506 Report and Ambassador Bremer's remarks lay out a plan with four core missions. First, security, establishing a safe and secure environment. Second, essential services, restoring basic services to an acceptable standard. Third, economy, creating the conditions for economic growth. And fourth, governance, enabling the transition to transparent and inclusive democratic governance.

Let me highlight just a few specific areas of important progress. In public safety, the CPA is vetting, hiring and deploying an Iraqi police force to restore order and safety: 30,000 policemen have been recalled to duty in police stations and training academies are being restored. Former New York City Commissioner Bernard Kerik leads a team whose mission is to promote well-trained and responsible public safety forces in Iraq's police, fire, border, customs and immigration organizations.

In the health area, consistent with plans developed before the conflict, the health sector is being systematically evaluated and a national database is being built to monitor and manage ongoing needs. Medical facilities are under repair, more than 1,500 tons of supplies are restocking medical shelves, and basic services have been restored. Today, nearly all of Iraq's 240 hospitals, 10 speciality centers and more than 1,200 clinics are open and receiving patients.

Power. Prewar planning limited damage to the electrical system during the conflict. But restoring electricity has been a major challenge because the prewar infrastructure was so dilapidated and because of continuing targeted sabotage. Nevertheless, much of Iraq, with the exception of Baghdad, is now at or above prewar power availability.

BOLTEN: Ambassador Bremer expects to restore power fully to prewar levels within the next 60 days, though that will still leave a substantial shortfall in Iraq's projected power needs.

In the oil area: In addition to rebuilding critical infrastructure, rapid restoration of Iraqi oil production is a high and crucial priority. Crude oil production already exceeds one million barrels per day. Future production levels will depend on many variables, including the availability of adequate power and security of the oil infrastructure. Though, Ambassador Bremer now expects by the end of summer to have oil production at a level of around one and half million barrels per day.

In the economy, Ambassador Bremer identified the CPA's broader task in the current economic field as twofold. First, to stabilize the current economic situation, which they are doing in part by continuing payment of public sector salaries and pensions and by funding a range of infrastructure construction projects. Second, to promote long-term growth, which they are doing through measures designed, for example, to establish a sound currency, to create an independent central bank, and to build a modern banking system.

To pursue these and other important ongoing efforts in Iraq, we began with approximately $7.7 billion from a number of sources. Approximately, $600 million was provided from DOD accounts to support CPA operations. Approximately $3 billion was appropriated by Congress in the war supplemental, of which about $500 million was provided to the Department of Defense for oil field repair. Roughly $500 million was drawn early from appropriated 2003 foreign assistance accounts.

Added to these appropriated funds are the following: About $1.7 billion in Iraqi state frozen assets in the U.S., referred to as vested assets. About $800 million in cash and other assets found in Iraq; those are referred to as seized assets. And finally, over $1 billion in oil receipts were transferred by the United Nations into a new development fund for Iraq, DFI. We expect additional resources frozen in other countries, eventually, to be transferred to the DFI.

The recent Section 1506 Report provides Congress the status of these funds as of June 30. I'll highlight some of the key numbers, what we've spent so far and on what, the details of which are available in the full report. Through the end of June, the U.S. government has allocated slightly more than $2.7 billion. Of that $2.7 billion, approximately $750 million came from seized and vested Iraqi state assets, the remainder from funds appropriated by Congress.

The $2.5 billion allocated so far, includes funding for the following activities: $730 million for relief efforts to reestablish food distribution, provide medical supplies, purchase fuel, and provide other humanitarian efforts; $400 million for emergency payments and salaries for civil servants and other workers in various sectors and for pensioners; $1.37 billion for reconstruction activities, including reestablishing critical services, ministries, oil production and security forces. And $200 million for activities that support the operations of the CPA in Baghdad.

Mr. Chairman, as a result of these allocations, roughly $5 billion in funds remain. The picture as of June 30 looks like this. Of the original $4.1 billion in funds appropriated by Congress, approximately $2.2 billion remained as of June 30. Of the original $2.5 billion in seized and vested Iraqi state assets, approximately $1.8 billion remained. And just over $1 billion remains in the DFI account.

Mr. Chairman, thanks to the dedication, courage and sacrifice of our men and women in uniform, so ably represented here by Secretary Wolfowitz and General Keane, we have liberated Iraq. Now our mission, in your words, Mr. Chairman, is to win the peace.

The president agrees. After meeting with Ambassador Bremer last week, he reaffirmed the coalition's determination to help establish a free, sovereign and democratic Iraq. He understands that rebuilding Iraq will take a sustained commitment if we are to improve security, restore essential services, generate economic development and secure democracy for all Iraqis.

Building on plans that were developed even before combat operations began in Iraq, the Coalition Provisional Authority is implementing a comprehensive strategy to move Iraq toward a future that is secure and prosperous. We look forward to working with this committee and the rest of Congress to ensure fulfillment of that vision.

Thank you, Mr. Chairman.

LUGAR: Well, thank you very much, Director Bolten, for these specifics, as well as the outline of the planning. We appreciate your testimony.

I'd like to call now upon a good friend of the committee.

And I welcome you again, Secretary Wolfowitz. You were most generous with your time and important testimony last month, and we thank you again for your willingness to reappear today. Please proceed.

 

STATEMENT OF

PAUL WOLFOWITZ
Deputy Secretary, Department of Defense

 

WOLFOWITZ: Mr. Chairman, I appreciate the opportunity. I think we should also thank Chairman Warner and the members of the Senate Armed Services Committee for setting a good example for all of us in not arguing about whether defense witnesses should appear before your committee or vice versa.

LUGAR: Thank the chairman.

WOLFOWITZ: I think there's unanimous agreement that these issues are of such importance that we need to put those kinds of differences behind us.

And I, sitting here and talking to you, I recall, I think we really first got to know each other very well 20 years ago -- in fact almost literally 20 years ago when we began the process of a political transition in the Philippines that led that country from a dictatorship to a democracy.

The conditions were very different. We didn't need American troops. You, Mr. Chairman, played an extraordinary role in making that happen. I think it's the kind of thing we've seen unfold in Asia over the 20 years since then. Gives me a certain cautious hope that maybe we can begin a process like that in the Middle East.

Mr. Chairman and members of the committee, on behalf of the men and women who proudly wear the uniform of our country and who serve our country so faithfully and so well, I want to say that we are grateful to you and your colleagues, in the Senate and in the House, for you continuing and unfailing support.

I just came back from a four-and-a-half-day visit to northern, central and southern Iraq.

WOLFOWITZ: We had incredible support from the U.S. military and as a result, I think in that four and a half days we were able to cover what would probably normally take about two weeks.

We did it in 120 degree temperature, which I don't expect any sympathy for but it certainly gave me an understanding of what our troops are living with day after day after day, and they didn't get to sleep in the places we slept in at night.

Actually, I think I would have preferred to be out in a tent than to be in one of Saddam's palaces, but that is the way the cookie crumbles, as they say.

We had some remarkable members of the Fourth Estate with us, and they've written some interesting pieces, including I think quite a few that sort of summarized our trip certainly more eloquently than I can and perhaps more objectively.

So if I might I'd like to submit those for the record -- an article by Jim Hoagland, an article by Eric Schmitt, an article by Paul Gigot, and an article by Steven Hayes (ph).

And just to try to compete a little I'll add my op-ed piece from yesterday's Post, if I may do so, Mr. Chairman.

LUGAR: It will all be included in the record in full.

WOLFOWITZ: Thank you.

Mr. Chairman, I appreciate your offering me the opportunity to speak at some length here, because I think we learned a lot and I think it's important to share it not only with the committee, but with the American people.

So I will summarize parts of my written statement, but I'll be delivering quite a bit of it.

I'd like to start with the police academy, which Senator Biden mentioned you visited when you were there. I visited -- between the time that you visited and the time we arrived a rather appalling discovery had been made.

Behind that police academy stands the forked trunk of a dead tree. It is unusual for the fact that on each fork of that trunk the bark is permanently marked by two sets of ropes -- one high enough to tie a man and the other a woman.

Near the tree is a row of small cells where special prisoners were held. Our guide on the tour of the academy was the newly appointed superintendent, I guess he's called the dean. I think you met him also.

He himself had spent a year in jail for having denounced Saddam Hussein. I expressed some surprise that he seemed like a sensible man, how could he have been so foolish as to denounce Saddam Hussein? He said, "Well, I just said it to my best friend." That was enough to get him in jail for a year.

He told us of unspeakable things that once happened to men and women tied to that tree and held in those cells right behind the police academy unknown to visitors, unknown to the police who are training there.

Beyond that torture tree and the cells, a small gate leads to the Olympic committee headquarters run by Uday Hussein, who apparently would often slip through the back gate at night to torture and abuse prisoners personally.

That is the same tree behind the policy academy that was described in such gruesome detail in the Washington Post on July 23. That article focused on the sad story of one Assyrian Christian woman who was tied to that tree and made to endure unspeakable torture. Her husband was executed at the academy and his body was passed through the steel gate to her, as the article described it, like a piece of butcher's meat.

All because the couple had not received state approval for their marriage.

There is a positive aspect in the disgusting story of Juman Muhila-Hana (ph). That is her courage in coming forward to offer U.S. officials what is very likely credible information, information that is helping us to root out Baathist policeman who routinely tortured and killed prisoners.

Mr. Chairman, as I said, that is the same police academy that you and Senator Biden and Senator Hagel visited. But as I said, our understanding of the academy's former role in the regime has evolved since your trip. That is due to Mrs. Hana's (ph) brave testimony about crimes committed against her, and that one step in the evolution of our understanding of what went on in the old regime points to one of the most formidable challenges facing us today.

The people of Iraq have much valuable information that can help us root out Baathists and help them find justice, but their willingness to tell us what they know will continue to take significant investments on our part, investments of time, of resources, of efforts to build trust among the Iraqi people.

Mr. Chairman, like Ambassador Bremer who, I believe, briefed you in closed session, like John Hamre, who we sent over to do a survey for us and came back with an excellent report, I too observed that there is an enormous need in Iraq for basic services to be restored, for jobs to be restored.

WOLFOWITZ: I think everywhere I went I heard the plea for more electricity. I also heard, everywhere I went, expressions of gratitude for being liberated from one of the worst tyrants in modern history.

But what I also heard were continued expressions of fear, fear that has not yet left the Iraqi people, fear that verges on paranoia. In speaking with the city council in the holy city of Najaf, one of the two most important cities for Shia Islam, one of the members of the city council, educated professional, I think he was either an engineer or a lawyer, asked me what Americans might seem an incredible question. He said, "Are you Americans holding Saddam Hussein as a trump card over our heads?" It is paranoia. And I was categorical in saying to me that no one would like to get Saddam Hussein more than we would. But after what they've been through, after the way he's terrorized them and after the experiences of 1991, they are paranoid.

And so, I came away with two very important conclusions I'd like to share with this committee about the linkages that confront us in dealing with the problems of Iraq. We cannot take these problems on piecemeal. We have to take them on simultaneously.

The first linkage is the connection between the past and the present. You cannot separate what seems to be history in Iraq from what goes on today. The people who suffer those tortures, the people whose relatives are buried in those mass graves are not going to come forward willingly with information until they're absolutely convinced that Saddam and his clique are gone and that we are staying until the place is secure.

And it's connected also, I might add, to the issue of looking for information about weapons of mass destruction. We've only just recently learned that there are leaflets circulating Baghdad warning Iraqis that anyone who provides information about weapons of mass destruction programs to the coalition will suffer the penalty of death. I take it whoever circulated those leaflets believe there were such programs, by the way.

The second connection is the crucial connection between security and reconstruction. In fact, let me qualify the word. What Iraq needs is not reconstruction -- which implies repairing wartime damage; that has largely been done with the important, still remaining, work to do on the telecommunications system. What Iraq needs is rehabilitation from 35 years of deliberate misuse of Iraqi resources.

You see palace after palace. We were in the mere guest house of a mere palace, luxury is appalling. The marble layers are appalling. It's palaces and tanks and artillery pieces and weapons of mass destruction and prisons and torture chambers that Saddam invested the resources of its people in. And to the extent he paid any attention to the basic infrastructure, there was a kind of punitive policy, at least since 1991, that particularly affected those areas of the south and north that he regarded as particularly disloyal.

That rehabilitation effort cannot take place without security, and security cannot progress without rehabilitation. Let me illustrate it in simple terms. Part of our security problem is getting those young men back at work or at work for the first time in many cases. That means getting the economy going, that means getting electricity up and working.

To get electricity up and working, however, we've got to do something about the deliberate sabotage that is bringing down long- distance power lines. We can tell the difference between random theft where the thieves are very careful to take all the copper away from them, and the increasing incidents of clear and deliberate sabotage where that is all is destruction. Indeed, the more we succeed, the more the Baathists and the terrorists who are working them with will target our success, but they won't win.

Mr. Chairman, for many years the classic study of Saddam's tyranny is a book called, "Republic of Fear"; originally published, under a pseudonym because he feared for his life, by a very brave Iraqi named Kanan Makiya. And in that book he quotes a letter from a former agent in the Iraqi Secret Police. "Confronting an experienced criminal regime," that former member of the regime said, "such as the president want (ph) in Baghdad can be done only with truths that strip off its many masks, bringing its demise closer."

Traveling through Iraq last week, we heard many accounts of unspeakable brutality on a scale Americans cannot imagine. We saw truths that are stripping away masks of legitimacy that regime dead- enders may yet cling to.

Wolfowitz: And while these truths may be unpleasant to face, doing so will help hasten the demise once and for all of a truly criminal regime.

(inaudible) visited a small village in southern Iraq, near the Iranian border, called Al Terabba (ph), where we met remnants of one of the regime's most terrific brutalities, the marsh Arabs. These are people for whom liberation came just barely in time to save a fragment of a civilization that goes back several millenniums. But for the marsh Arabs, the marshes are no more. For 10 years, Saddam drained their ancestral lands. Where there was once a lush landscape of productive fresh water marshes the size of the state of New Jersey, there is now a vast, nearly lifeless void which one reporter with us likened to the surface of the moon.

According to one estimate, the population of the marsh Arabs in 1991 stood at half a million. But after Saddam's humanitarian and environmental crimes, it is believed there is at most 200,000 left and less than 40,000 of those still in Iraq. But at least there is still a marsh Arab civilization capable of being preserved, and hopefully, restored. It is not likely that it would have lasted another two or three years, much less another 12.

The children in Al Terabba mobbed us, greeted us with loud applause and cheers of "salaam Bush and down with Saddam". But their first request was not for candy or for toys, it was just a single word: water. In the case of the many tens of thousands who were killed at the mass graves in al-Hilla (ph), or the prisoners of Abu Ghraib (ph) liberation did not come in time.

We heard stories about buses full of people that villagers would watch pass by headed for one public field that had been closed by the government. They reported hearing gunshots, assuming that the people were celebrating, as is sometimes customary. When the buses would pass by the villagers on the return trip with the buses completely empty, people began to suspect that something was terribly wrong. Of course, we know now that thousands of women and children were brought to places like the killing fields in Hilla, gunned down and buried dead or alive.

Today, some of their bodies have been retrieved from the earth, they now lay wrapped in plastic bags in neat rows on the dirt. They wait for someone to claim them. The graveyard in Hilla is just one of dozens that have been discovered, to date, in Iraq. Indeed, while we were in the north with the 101st air assault division, General Petraeus told us that they had temporarily stopped the excavation of a newly discovered mass grave site after unearthing 80 remains, mostly women and children, some still with little dresses and toys.

At the prisoner in Abu Ghraib (ph), we saw the torture chamber and an industrial-style gallows that conducted group executions regularly, twice a week. We were told that 30,000 people and perhaps as many as 100,000 were killed there over the years.

Mr. Chairman, I don't recite these in order to go over history. I recite them because one of my strongest impressions is that the fear of the old regime is still pervasive throughout Iraq. A smothering blanket of apprehension and dread woven by 35 years of repression where even the smallest mistake, the smallest whisper to a friend could bring imprisonment or torture or death. That won't be cast off in a week's time.

Iraqis are understandably cautious, and until they are convinced that every remnant of Saddam's old regime is being removed, and until a long and ghastly part of their history is put to rest, that fear will remain. So the history of atrocities and the punishment of those responsible are directly linked to our success in helping Iraqi people build a free, secure and democratic future. And I might add, to our search for the weapons of mass destruction programs.

In that light, what happened to the miserable Hussein brothers last week is an important step in making Iraqis feel more secure that the Baathist tyranny will not return. An important step in our efforts to restore order to give freedom a chance and to make our own troops more secure.

Even in Baghdad, far from the Shia and Kurdish areas that we commonly associate with Saddam's genocidal murders, enthusiastic and prolonged celebrations over the news of their deaths erupted almost at once, suggesting something else that we observed, Mr. Chairman. Saddam and his sons were equal opportunity oppressors. His victims included Sunnis as well as Shia, Arabs as well as Kurds, Muslims as well as Christians. And in fact, the Turkish foreign minister, who was here last week, asked us to stop referring to it as the Sunni triangle -- the Sunnis were victims as well.

The same day Uday and Qusay were killed, we also captured number 11 on the list, the commander of the Special Republican Guard. That's the unit whose job was to spy on the Republican Guard. The purpose of the Republican Guard was to ensure the loyalty of the regular army. And, of course, there was something called the special security organization that kept an eye on the Special Republican Guard. That was the system of checks and balances in Saddam's Iraq. So the roots of that regime go deep burrowing into precincts and neighborhoods like a huge gang of organized criminals.

And it is the coalition's intensified efforts on finding and capturing mid-level Baathists that we believe will yield increasing results in apprehending the contract killers and dead-enders who are now targeting our soldiers and targeting our success.

Major General Ray Odierno, the commander of the 4th Infantry Division, told us the tips are on the rise, and that was before the deaths of Uday and Qusay. The number of Iraqis providing information to our troops have been increasing over the last couple of weeks. Those tips have led to significant seizures of weapons, including a week ago over the course of a week, some 660 surface-to-air missiles.

WOLFOWITZ: It is important to remember that the people who want the return of the old regime are just a tiny fraction of the Iraqi people. But even if it's only one in a thousand, that's still 20,000, and it's not a small number.

I think it's also important to note that this low-intensity conflict may be the first in history where contract killing has been the principal tactic of the so-called guerrillas. In Nasiriyah, for example, Iraqis have told us about offers of $200 to attack a power line and $500 to attack an American. Of course, that makes the point too that dealing with unemployment is part of dealing with security.

Let me say a little bit about what we learned region by region, and I'll try to summarize what's in the written testimony.

I think, Mr. Chairman, that you and Senator Hagel and Senator Biden can attest to the fact that there's more good news in Iraq than is routinely reported. We saw quite a bit of that. Significantly, the military commanders that I talked to who have had experience in the Balkans all said that in Iraq we are far ahead of where we were in Bosnia or Kosovo at comparable times, and, in some cases, even ahead of where we are today.

Lieutenant General Rick Sanchez, the outstanding new commander of Joint Task Force 7, responsible for all of Iraq, is a Kosovo veteran -- he was there during the first year. And during one of our briefings, he commented that things are happening in Iraq after three months that didn't happen after 12 months in Kosovo.

I asked him to elaborate, and, just off the top of his head, he jotted down a list of 10 things, which I've provided in my written testimony, including the fact that the judicial system is functioning, the fact that 90 percent of major cities have city councils. I believe, unless I misread his handwriting, he said the police force is about 80 percent of the requirement. I think that's a little high, but it's definitely moving in that direction.

That schools were immediately back up. That media are available across the country. I would note that not the media we'd most like to see, but there's a free press in Iraq for the first time in decades.

Public services are nearly up to pre-war levels. I am again quoting from his quotes. And again, let me emphasize that pre-war levels are nowhere near adequate and we have to do a lot better. And in Baghdad, we're still not at pre-war levels in electricity. But that's real progress.

And number 10 on his list, and in my view most important and I want to come to this later, recruiting for the new Iraqi army has started with training to begin in a couple of weeks. In fact, the entire north and south are impressively stable, and the center is improving daily.

The public food distribution is up and running. We planned for food crisis, but there isn't one.

Hospitals nationwide are open. Doctors and nurses are at work. Medical supply convoys are escorted to and from the warehouses. We planned for a health crisis, but there isn't one.

Oil production has continued to increase, and, for about the last week, has averaged 1.1 million barrels per day. And as Senator Biden noted, it did not cost $5 billion to get there.

We planned for the possibility of massive destruction of this resource of the Iraqi people, but our military plan, I believe, helped to preserve the oil fields for the Iraqis.

The school year has been salvaged.

There are local town councils in most major cities and most major districts of Baghdad.

There is no humanitarian crisis. There is no refugee crisis. There is no health crisis. There has been minimal damage, wartime damage infrastructure. And there has not been the anticipated and much feared environmental catastrophe either from oil well fires or from dam breaks.

WOLFOWITZ: However, as I related in May and as I related earlier, Saddam's legacy of destruction and decay is another story entirely, and that gives us major work to do.

We were particularly impressed in the south by the work of our coalition partners led by the British in the Basra area and in the Shia heartland with the two Shia holy cities of Najaf and Karbala by U.S. Marines.

Our Army civil affairs teams are equally impressive in that effort. They have created functioning local governing councils free from Baathist influence.

I would note we have one Harvard-trained lawyer, enlisted woman in the Army Reserves who is now trying the previous governor of Karbala whom we mistakenly appointed and is now in jail on corruption charges.

The present governor -- excuse me, that's in Najaf.

The governor of Karbala captured the development best when he told us, and I'm quoting from him now, "We Shia have theological ties to Iran, but we refuse to be followers of any country outside of Iraq. I want to stress," this governor said, "we aspire to independence and democracy. We want to heal the wounds from the past regime's atrocities. We want to build factories, bring in the Internet, practice our religious rights and freedom, have good relations with our neighbors and the world. The Marines in Karbala," he said -- commanded by Lieutenant Colonel Lopez (ph), that's Lieutenant Colonel Matt Lopez (ph) for his parents -- "work day and night with our governing council to provide security and services," end quote.

I asked him if he'd like to visit the United States and he beamed. He said, "I have not been allowed to leave Iraq for 35 years. I would love to visit your country."

Mr. Chairman, in the north we saw another success story led by General David Petraeus and his troops of the 101st air assault division who arrived in Mosul on the 22nd of April -- I would note after liberating Najaf and Karbala in the south.

Over the next 30 days, they put together an impressive list of accomplishments. In my written testimony, I have some 20 of them. I won't take your time. You can read them.

What I would like to mention though is just one example of the kind of imagination and ingenuity that his troops are doing. We took a walking tour of the center of Mosul with an Army company responsible for security in that area and security of this area's business.

They, a few weeks ago, captured seven terrorists, I believe mostly foreigners holed up in an apartment in the town square. Since getting rid of those people, it's been stable. But they go around in full-body armor and guns at the ready.

But as we were passing a line of butcher shops, the company commander, Captain Paul Stanton (ph) told me a fascinating story about how they had dealt with a problem involving the town's meat cutters.

It seems that the butchers were slaughtering their animals on the streets and dumping the carcasses in front of their shops. To get this rather unsanitary problem under control our soldiers organized a civic association of butchers so that they would have an authoritative institution with which they could deal.

This is something unheard of in pre-war Iraq. In the old regime, organized associations weren't allowed. For this purpose, they weren't necessary. If there was a problem dumping carcasses in the street, you simply shot a few butchers and the rest got the point.

We deal differently. And when I heard this imaginative solution, I jokingly asked Captain Stanton (ph) if they taught him that at West Point and of course he said no. He said they had to figure that out as they went along.

But of course that's something that Americans, including our wonderful soldiers, have in their fingertips -- something that they bring from the civic culture in this country to help build a civic culture in Iraq.

Mr. Chairman, the 4th Infantry Division in what I will now stop calling the Sunni triangle but is the Baathist triangle, the Saddamist triangle -- the 4th Infantry Division has a tougher task because the security problem is much more severe.

WOLFOWITZ: General Ray Odierno and his troops have done an impressive job in confronting that challenge. He briefed us on Operation Peninsula Strike, Operation Sidewinder, Operation Soda Mountain. Each in succession have been effectively rooting out mid- level Baathists, some senior Baathists, capturing surface-to-air missiles, rocket-propelled grenades and other horrendous devices.

He said that as we continue to capture or kill the foot soldiers it's becoming increasingly more difficult for the mid-level Baathist financiers to organize, recruit and maintain their force of hired killers.

And they are also very good after any operation going into the villages where they've been and handing out chickens and soccer balls and making amends for any damage they may have done.

General Odierno's troops are also responsible for the city of Kirkuk, which is a much more stable area, in fact one of the most stable in the country, I think. There an interim governing council has been established whose members are working together. It's a very multi-ethnic group, including Arabs, Sunni Arabs, Shia Arabs, Sunni Turks, Sunni Kurds, Christians, and including three women.

My meeting with that council was one of the most heartening of all on our trip. Many of the 18 members spoke of their gratitude to President Bush and to Prime Minister Blair and to the coalition troops for their liberation. The word "liberation" was used repeatedly.

Most stunningly, an old Arab member of the council spoke eloquently about the need to return Kurdish property to its rightful owners. All Iraqis were victims of the last regime, he said.

One member of the council said, "Please tell President Bush thank you for his courageous decision to liberate Iraq. Many American soldiers have volunteered their lives for our liberation."

Another member commended the tireless efforts of General Odierno and his army.

And finally one, speaking in English, asked me when the U.S. government was going to, quote, "confront Arab television for their incitement to kill Americans." Obviously, he pointed to another challenge that we face.

Mr. Chairman, you recently said that our victory in Iraq will be based on the kind of country we leave behind. Just 89 days after the end of major combat operations, our forces and their coalition partners are making significant progress in helping Iraqis build the kind of country that will reflect their enormous talents and resources and that they can be proud of one day.

Getting rid of the Hussein regime for good is not only in the interest of the Iraqi people, it enhances the security of Americans and of people throughout the Middle East.

To those who question American resolve and determination, I would remind them that we are still playing our crucial role in Bosnia eight years after the Dayton Accord, long after some predicted we would be gone. And we continue to be the key to stability in Kosovo and in Macedonia.

But the stakes in Iraq for us are even greater than they are in the Balkans. Mr. Chairman, the military and rehabilitation efforts now under way in Iraq are an essential part of the war on terror. In fact, the battle to secure the peace in Iraq is now the central battle in the war on terror.

WOLFOWITZ: General Abizaid met with some reporters over lunch with us (inaudible) our visit and he said something that I believe is quite profound and I'd like to quote it. And I'd like to note that General Abizaid is not only an outstanding commander and a great soldier, he's a real expert on the Middle East, he's fluent in Arabic, he served in Lebanon, he commanded a battalion in northern Iraq in Operation Provide Comfort. He speaks from deep experience and this is what he said.

He said, "We all make mistakes by wanting to only examine Iraq or only examine Afghanistan or only examine the Palestinian-Israel theater. We look at things through a soda straw and we seem to think, 'Well, if we just focus our particular energies and efforts on dealing with problems in Iraq, you know, we'll solve the Iraq problem.' "

"But the truth of the matter is," he said, "that this whole difficulty in the global war on terrorism is that it is a phenomenon that is without borders. And the heart of the problem is in this particular region, i.e. the Middle East; and the heart of the region happens to be Iraq." And so, he said, "It's not just a matter of somehow or other fighting a global war on terrorism with Special Operations Forces. It's a matter of having a policy that aims to bring a certain liberalization in the way that people look at the world. And if we're successful here in Iraq, I believe it's a unique opportunity for the whole region."

"I think I'm pretty articulate on it," he said. I would disagree with that one part of his statement, he's very articulate, and I agree with him strongly.

"But I guess it's to say, you can't separate the global war on terrorism from what's happening here in Iraq. And you can't separate the struggle against Baathists from the global war on terrorism. And if we can't be successful here", he said, "we won't be successful in the global war on terrorism." And that means -- and this is important -- "And that means," he said, "it's going to be long and it's going to be hard and it's going to be sometimes bloody. But it is a chance when you combine it with initiatives in the Arab-Israeli theater and initiatives elsewhere is the chance to make life better, to bring peace to an area where people are very, very talented and resources are abundant, especially here in Iraq."

"So I think the opportunity that is before us is quite," I think he said, "incredible."

Mr. Chairman, what that statement says, and it says it quite eloquently, is that the war on terrorism is a global war and it is a two-front war. One front is killing and capturing terrorists. The other front is building a better future, particularly for the people of the Middle East. So the stakes in Iraq are huge. And there's no question that our commitment must be equal to the stakes.

Last week President Bush said that our nation will give those who wear its uniform all the tools and support they need to complete their mission. Mr. Chairman, I applaud the determined dedication of this committee, of you personally, in helping the American people understand the stakes that we have in securing success in Iraq.

Mr. Chairman, in my written statement I go on at some length about the question of how many troops we need. We can get into that in questions. But I would like to say something that's very important here.

We don't need more American troops, at least our commanders don't think we do. What we need most of all -- we need international troops, yes; we need actionable intelligence, yes -- but what we need most of all are Iraqis fighting with us. The Iraqi people are part of this coalition and they need to be armed and trained to participate.

We've begun recruiting and training Iraqis for a national army and are about to begin recruiting for a civilian defense force. That force could take over some important tasks from our troops, such as guarding fixed sites and power lines. There is no reason that Iraqis could not be guarding the hospital from which someone threw a grenade last week that killed three of our Marines.

Mr. Chairman, your colleagues in the Senate and the House can help. To accelerate this process, we urgently request that you support the Armed Services Committee in restoring, in conference, the $200 million and authority that we requested from the Congress in our budget this year, authority to equip and train indigenous forces fighting with Americans in Iraq or Afghanistan or elsewhere. It was dropped apparently because the Congress did not believe it was necessary. I hope it is clear now that it is necessary. It is much better to have Iraqis fighting and dying for their country than to have Americans doing the job all by themselves.

WOLFOWITZ: And there is no shortage of Iraqis who are willing to help us.

If there are 20,000 committed Baathists targeting our success, there are 19 million or more Iraqis who hate those people and would like to help us. We should not find that we are held back by a shortage of authority or money to give them proper training and equipment to do the job.

One reason our commanders don't want more troops, Mr. Chairman, is that the function of American troops is to go after enemy that have been identified through actionable intelligence. When it comes to patrolling the streets of Iraqi cities, it's a disadvantage to have Americans. It means that our people are colliding with ordinary Iraqis trying to go about their day-to-day business. We want to get out of that posture as quickly as possible.

In fact, in Kirkuk the 4th Infantry Division has already managed to turn the entire policing job of a multiethnic city in which many predicted there would be widespread ethnic conflict, and there has not been, to an Iraqi police force.

As we place our investments in a larger context, we must realize the greatest stability in this critical region will save U.S. resources in the long run.

And I agree strongly with what I heard Senator Biden saying and others have said investments now that can deal with problems on an urgent basis while the window of opportunity is open however long that may be, and I can't predict how long it may be.

But we have a time now when investments that might seem inefficient to someone trying to design the perfect scheme for standing up power, the perfect scheme for training an army, doing things rapidly will have big payoffs.

But let's put it in some context.

According to some estimates, it cost us slightly over $30 billion to maintain the so-called containment of Saddam Hussein for the last 12 years, and it cost us far more than money. The containment policy cost us American lives, lives lost in Khobar Towers, on the USS Cole. It routinely put Americans in danger in enforcing the no-fly zones, and it cost us in an even larger way as well.

The American presence in the holy land of Saudi Arabia and the sustained American bombing of Iraq, which were part of that containment policy, were principal grievances -- the principal grievances -- cited in Osama bin Laden's notorious 1998 fatwa that called for the killing of Americans.

So we should consider what we might spend in reconstruction in Iraq against the billions that we've already spent elsewhere, or against the consequences if we fail to win this global war on terror.

We cannot fail.

But Iraq can contribute to its reconstruction and its rehabilitation. It is already doing so and its share will increase as oil production increases and the Iraqi economy recovers.

At this stage, it is impossible to estimate what recovery actually will cost. What we do know is that resources will come from a variety of resources, and the costs of recovery in Iraq need to be shared widely.

The international community has a vital interest in successful recovery in Iraq and should share responsibility for it.

The international community has recognized its responsibility to assist us in peacekeeping efforts. Nineteen nations are now providing more than 13,000 troops on the ground and more on the way. And we're in active discussions with a number of very important countries, including Turkey and Pakistan, about further possibilities.

Mr. Chairman, when President Bush spoke in the Rose Garden with Ambassador Bremer at his side he said our military forces are on the offensive. Indeed they are, and they are doing an incredible job.

Everywhere I went I found troops with heartwarming stories about the reception they received from Iraqis.

WOLFOWITZ: They express some bewilderment about the news coverage they see. One soldier asked, "Don't the folks back home get it?" They understand that helping Iraqis build a free and democratic society will make our children and grandchildren safer.

Our troops are brave when they have to fight. And they still have to fight. And they are caring and clever, extraordinarily ingenious when they deal with humanitarian and political and civil- military challenges. Their relations with nongovernmental organizations, from one meeting I held with those groups, are going extremely well. And I believe the Iraqi people understand that we are there to help.

Mr. Chairman, the mayor of Karbala said we want to establish a national government and maintain relations with America. The people of northern Iraq, free from Saddam's tyranny for the last 10 years, 12 years, have demonstrated, to a remarkable degree, what Iraqis can do with freedom. And my meetings with newly freed Iraqis tell me they are looking to do the same thing.

The mayor of Mosul, who is a Sunni Arab and a former army commander who spent a year in prison because his brother who was executed had been suspected of coup-plotting, said that life under the old regime -- this is a Sunni, I remind you, Sunni Arab -- was like living in a prison. He described that regime as a ruthless gang that mistreated all Iraqis. His top priorities are investment and jobs, but he said to do that we need security. He credited the wisdom of General Petraeus in improving the security situation, and he added that jobs and investment will follow.

I asked the mayor if ethnic differences will prevent people from working together. And the Turkoman assistant mayor immediately said, "What caused this great ethnic gap here was Saddam. Throughout our history, we had no problems." Slight exaggeration but not too far. "This has happened only in our recent history. we consider ourselves, as Turks (ph) said, one garden with many flowers of different colors."

So even though the enemy targets our success, we will win the peace but we won't win it alone. We don't need American troops to guard every mile of electrical cable. The real center of gravity will come from the Iraqi people themselves. They know who and where the criminals are, and they have the most at stake, namely their future.

And we've shown them that we need to stay until the old regime is crushed and the criminals punished and that we are equally determined then to give their country back to them. They will know they can truly begin to build a society and a government that is of, by and for the Iraqi people.

In many ways, they are like people who have been prisoners, who have endured many years of solitary confinement without light, without peace, without much knowledge of the outside world. They must just (ph) emerge into the bright light of hope and the fresh air of freedom. It may take awhile for them to adjust to this new landscape, free of torture trees. But they are.

Last week, the president told us why it is so crucial that we succeed in Iraq. He said, and I quote, "A free, democratic, peaceful Iraq will not threaten America or friends with illegal weapons. A free Iraq will not be a training ground for terrorists or a funnel of money to terrorists or provide weapons to terrorists who would be willing to use them to strike our country or our allies. A free Iraq will not destabilize the Middle East. A free Iraq can set a hopeful example to the entire region and lead other nations to choose freedom. And as the pursuits of freedom replace hatred and resentment and terror in the Middle East," the president said, "the American people will be more secure."

WOLFOWITZ: Thank you for giving me so much time.

LUGAR: Well, thank you very much, Secretary Wolfowitz, for a very eloquent and comprehensive statement that we requested you make, and you have fulfilled our hopes for you.

Let me say that we have many members here. We know that we are likely to be interrupted by roll call votes at sometime there will be an opportune. So I would suggest we try for a five-minute limit on a first round, and that may be the only round. But to try to economize time, recognize as many members as we can.

Let me begin my five minutes by saying, Secretary Wolfowitz, that I think all of us will want to look into the $200 million that you've suggested needed for the training of Iraqis so they can do the patrol duty and fill in in the ways that you suggested. I think that's very important suggestion.

Likewise, you mention that $30 billion to contain Saddam, the containment policy was not inexpensive. This could lead to an interesting hearing all by itself on the reasons for fighting the war and the containment policy, and I will not go there, but I noted that in passing.

Let me ask, once again, my quest is to try to think through and, in your own mind's eye, see sort of five blank sheets of paper for the next five years. We heard from Mr. Hamre, roughly, that the budget of Iraqi incorporated, the government that preceded this is about $30 billion a year. I've never heard of that figure before. I don't know of this $30 billion, but you probably could establish it. In other words, there was some sum of money, revenues from all sources that Iraq used to pay for its governance. Now, you could argue some of that was wasted on troops and palaces and so forth, so maybe Iraq doesn't need $30 billion to run a government. But in any event, they need some sum of money.

Now, Mr. Bolten has filled in some important statistics with regard to where revenue comes from now and so did Ambassador Bremer. As I look at this, though, it seems to me important that showing not only our staying power, our vision and something which the Iraqi assembly council or the evolution of a democratic group of Iraqis may want to make some amendments, that we say X-number of dollars is going to be required for administration of this, this and this, and they add up to something. And on the revenue side, the money is going to come from these sources: oil, of course; the confiscated assets or whatever turn up are going to run out -- Mr. Bremer pointed that out -- not exactly this year, but a stretch we got over the next year, but that's about it for that. Maybe at some point this economy of Iraq produces some revenue from other sources. If it works, it will do so, as most governments do; but for a while it may not.

There are some blanks there that need to be filled. The pledging conference, other countries, other humanitarian resources, the United Nations. But at the end of the day, probably the United States. And what I'm trying to draw in terms of public debate is the thought, first of all, staying power, the confidence you've suggested.

Secondly, the lack of surprises. The thought that on down the trail when the enthusiasm that we now have for solving the problem lessens, and everyone knows there may be other problems, that we have at least some idea of what is likely to be required of the American taxpayer.

Now, a failure to do this is going to lead, I believe, to a lot of partisan haggling, bad surprises, whoever is president coming up with supplementals, running out of money unexpectedly. It wasn't unexpected. All of this is fully expected. And so while we are all fully expecting, let us say so.

Now, I appreciate again and again people say, "Well, this is unknowable." Senator Biden, said, "Of course, it is." We don't know in our government precisely for the next five years what in the world we will spend and what kind of revenues will come in. We are surprised every day by changes of hundreds of billions of dollars of anticipation. All I'm saying is, with regard to Iraq, however, perhaps this is not quite as (inaudible) dynamic situation. And at least it offers for the fledgling Iraqi government a chance to amend the motions to say, "These aren't the priorities that we see, and as a matter of fact we think there's some revenues can come from this and that."

LUGAR: So I hope that -- I visited with Dr. Rice at the White House last week on this idea. I've mentioned it publicly several times. I'm hopeful we can begin to fill in the blanks and take seriously this thought of a plan that we have some confidence in, the American people (inaudible) understand down the trail what we are doing.

I will not burden you with asking for a further comment, because my time has expired and I want to pass that along to somebody else. But I've just taken this five minutes to make the point, and I visited a little bit with Mr. Bolten about this prior to the hearing. He knows the regard I have for him and the work at OMB, and that is so critical, working with you at the Pentagon and working with State, working with NSC, working with our total government.

I thank you all for your testimony and I turn now to my distinguished ranking member, Senator Biden.

BIDEN: I want to try to ask a couple very specific questions, and if you could help me by giving as quick an answer as you could.

Mr. Bolten, what are your working assumptions on the cost side for the rest of '03 and for '04 for Iraq?

BOLTEN: For the rest of '03, Senator Biden, on the cost side our working assumptions are those that Ambassador Bremer has brought back to us. He's anticipating expenditures in the range for the total of '03 of about $7.3 billion.

BIDEN: How much will you be requesting for the remainder of the year, if any, from the United States Congress to fund that need?

BOLTEN: We don't anticipate requesting anything additional for the balance of this year.

BIDEN: And what do you anticipate for '04?

BOLTEN: I don't know the answer to that. Ambassador Bremer has laid out a reasonably specific budget for the balance of '03, and I think he had an opportunity to discuss that with you. But even that was relatively crude because of -- they're just getting a handle on so many of the variables that are in play right now.

BIDEN: Do you anticipate we'll be continuing to spend $4 billion a month for our troops in Iraq for '04?

BOLTEN: That's roughly what we're spending now. Looking out over the immediate term, we don't have any reason for expect a dramatic change in that number, but I wouldn't want to predict beyond the next couple of months, because the situation is so variable.

BIDEN: Don't you have to? I mean, we're talking about the '04 budget. We're going to be voting on that in the next couple months. What the devil you going to ask us for?

BOLTEN: Well, in the '04 budget -- and, Senator, as you know, we've been very explicit about it -- we have not included the incremental costs of our fighting forces in Iraq, nor the costs of reconstruction.

BIDEN: Why?

BOLTEN: Simply because we don't know what they will be.

BIDEN: Oh, come on now. Does anybody here at the table think we're going to be down below 100,000 forces in the next calendar year? Raise you hand, any one of you. You know it's going to be more than that. So you know at least it's going to be $2.5 billion a month. Give me a break, will you? When you guys starting to be honest with us? Come on. I mean, this is ridiculous. You're not even...

WOLFOWITZ: Senator, to suggest that this is an issue of honesty really is very misleading.

BIDEN: It is a suggestion of candor, of candor, of candor. You know there's going to be at least 100,000 American forces there for the next calendar year and you're not asking us for any money.

WOLFOWITZ: Senator, I don't know -- I don't know what we're going to have there.

BIDEN: Let me finish please. Let me finish.

WOLFOWITZ: OK.

BIDEN: And you are not asking us for any money in next year's budget for those troops. Now, what do you call that?

WOLFOWITZ: Senator, there will be a supplemental request, there is no question about that. And there will be a supplemental request when we think we can make a reasonably good estimate of what will get us through the whole year, so we won't have to keep coming up here with one supplemental request after another so I don't sit here and say, "Well, maybe the number's going to be 100,000," and then it turns out it's 120,000, then people accuse us of being misleading or dishonest.

We know what the number is now. We know what we're trying to do in terms of enlisting other countries. We don't know whether the Paks are going to come through with a division. We don't know whether the Turks are going to come through with a division. We don't know how rapidly we're going to be able to train Iraqis.

BIDEN: Are you suggesting, if, in fact, they come through with divisions we're going to reduce American forces?

WOLFOWITZ: I believe that that's exactly the purpose of getting foreign troops in. In fact, in southern Iraq today we are handing responsibility for key provinces in Iraq over to the Poles and the Spaniards and the Italians. And we're taking Marines out, we're not replacing them with Americans.

BIDEN: So we're going to have a net reduction of American forces for the...

WOLFOWITZ: I'm not predicting, Senator. I don't know until we get these Baathist criminals under control, we're going to put in whatever it takes to do the job.

WOLFOWITZ: But we are trying to get other people to fill in for us. We're trying to get Iraqis to fill in for us. And I think by the end of the year or early next year, we'll have a much better fix on what it takes to get through the year.

BIDEN: Do you have any expectation that you're going to be able to stand up an Iraqi army of any consequence in the next six months?

WOLFOWITZ: There are two different things here, and then, thanks for giving me a chance to explain it.

We're working on training an Iraqi army, which is a two- to three-year project to produce regular units, lots of training, lots of discipline. You don't need that kind of an army to guard six power lines, you don't need that kind of an army to take over for Marines guarding hospitals, you don't need that kind of any army to guard...

BIDEN: That's the civilian defense force you're talking about.

How long do you expect to have stand up...

WOLFOWITZ: Civilian defense force -- we believe we can have thousands of those people available within about 45 days.

BIDEN: Within 45 days. And how about the police?

WOLFOWITZ: The police we're standing up rapidly, and as you noted correctly at the police academy. They're not all equally good. I visited a group down in Basra that still are struggling, but up north in Kirkuk, for example, the Iraqi police have taken over the whole function of...

BIDEN: The Iraqi police have taken over in -- well, OK, I find this, kind of, incredible.

The picture you painted -- are there any substantive changes or consequence you're recommending to the president or is everything going along as planned, you've, kind of, got everything on course here and everything's pretty well in hand? I mean, you've told us about how the military says we're well ahead of where we were in Bosnia. Are you happy with where we are, right now?

WOLFOWITZ: Senator, I'm not happy with where we are right now and if there's any way to accelerate anything, we're looking at it.

We're looking at how to accelerate training Iraqis. I've talked about that at some length. We're looking at emergency ways of accelerating electric power production; some of that is already under way. I believe the reason we are able to get the oil production up over a million barrels a day is because we brought in portable generators to provide electricity. That's the kind of...

BIDEN: The report called for -- what? -- 5,000 of those. Are they up -- 550 diesel-driven emergency generators to be installed -- are they up and running?

WOLFOWITZ: I don't know. I can check that for the record. I don't know the detail.

But that is an example of where we're looking at acceleration. We're looking at acceleration in some nonmilitary areas. For example, up north, one of the big issues, the so-called de-Arabization. A lot of Kurds and some Turks were moved out of their homes in a, kind of, slow motion ethnic cleansing and Arabs were moved in. The Arabs would be happy to leave but it's going to take some money and some legal efforts to do that. We'd like to get that started more quickly than what was originally planned.

Your point, Senator, which I agree with, is there's a window of opportunity here. I can't measure how long it is, but I do believe that the sooner we move within that window, the better off we'll be further out into the future; and that money invested now, even if it's not quite efficient, will save us a lot of money in the long run. And money invested on the civil side can help bring down that $4 billion a month that we're currently spending on our troops.

BIDEN: My time's up, but I'm confused.

General Myers, chairman of the Joint Chiefs, said that if we get these 30,000 additional foreign troops that there will not be enough for us to reduce our military in Iraq for months, possibly years, and he said we need more than 30,000 and even that. I don't get you guys. Myers says that, you're telling me, "We get these additional troops, we're going to draw down American troops."

KEANE: Can I respond to that, Senator?

BIDEN: Sure.

KEANE: The two pacing items that involve U.S. troop commitment is one, obviously, the level of violence and the security situation we're currently facing. We have to get that down. And the second thing is the involvement of multi-national forces, and also, the Iraqis themselves, the civil defense forces that deputy secretary mentioned and also the Iraqi army and police forces. Those are our pacing items.

And General Abizaid, when he looks to the future, does not want to look beyond March. But even with looking toward March, what he sees is definitely two multi-national divisions, probably by the end of September, and the possibility of a third that hasn't been committed yet, but the State Department and the Defense Department is working with that. If that does happen, that will reduce U.S. commitment by one division and also one brigade.

And we're moving very quickly, obviously, to get the Iraqis to do more for themselves, to help defend their own people, and that's in its embryonic stages.

KEANE: It's those two items -- the level of violence, multinational division participation, and also the Iraqis themselves will see us reduce the U.S. troop commitment.

BIDEN: These forces are nowhere, and I'd be interested to see about your civilian force.

But at any rate, I thank you.

LUGAR: Thank you, Senator Biden.

Senator Hagel?

HAGEL: Mr. Chairman, thank you.

Gentleman, thank you for coming before us today. We appreciate very much you taking the time.

And also to your colleagues, General, to our men and women in uniform around the world, our thanks, our gratitude. We've very proud of what they've done and what they're doing. And please extend that to them. Thank you.

KEANE: Thank you, Senator.

HAGEL: I'd like to stay on this issue of manpower, force structure, and read just a short paragraph from a July 16 news conference that General Abizaid gave.

And he said in that news conference 13 days ago speaking of troop rotation, much of what we're talking about here, in specific reference to the 3rd Infantry Division, when they may rotate out.

He picks it up at this point, he said 13 days ago, "We will bring those troops home by September, certainly out of Iraq by September and they'll be moving toward home in September. And a lot of it, of course, will depend upon the rotational scheme that either the U.S. Army, U.S. Marine Corps, or allied coalition forces happen to submit to us in the next week. But we'll know the specific answers to the questions in about a week."

Now, that was 13 days ago.

Do we know what the specific answers are?

KEANE: Yes, sir.

The Army has put together a rotation plan and policy. It's one year in length, which means that the forces in being in Iraq will stay and do a 12-month tour.

We've got a history with this going back to World War II, where we stayed indefinitely. Korea, it was six months and 12 months for combat forces and support forces. Vietnam, it was a 12-month individual assignment, if you recall.

And then since that time...

HAGEL: Well, General, may I interrupt just a moment?

I don't mean to be rude, because my time is short here. I understand that part of it.

But what about numbers relevant to what you've been hearing here? Are we any closer to understanding what's going to be required here in the way of American force structure?

KEANE: Yes, very specifically.

We're essentially doing a one for one replacement of our forces. The 82nd Airborne Division, its headquarters and two brigades will be replacing the 3rd Infantry Division. There already is a brigade from the 82nd in the theater.

HAGEL: But that's American for American.

KEANE: That's correct.

HAGEL: And so that would lead me to believe that we're going to keep those troops in there for a while.

Just as reference, Senator Biden's comments about Senator -- or General Myers comments here recently at I believe July 24...

KEANE: Well, to deal specifically with what you're talking about is there is a multinational division that's forming right now with the -- Poland is going to be the head of that division, and that division as it comes in place will replace the Marine Expeditionary Force which is there, which is essentially a division minus, and will take over their sector.

And that's expected to take place in the September timeframe.

HAGEL: But an American force structure is going to be required for some time to come?

KEANE: Absolutely.

No question about it.

HAGEL: And what I'm trying to get at, like my colleagues have tried to focus on, do we have any idea of what that force structure is going to look like -- understanding completely that these are dynamic issues and they float and they move back and forth, and obviously depending on our international assistance?

But can you help us here, General?

KEANE: Sure.

We have made a release that indicates which divisions are going to be replaced and what brigades will be replaced on a time schedule that takes us through the February-March timeframe when all of the units that are currently in Iraq will be completing a one-year assignment. And all those forces have been notified, who they are.

HAGEL: Would you say the American numbers, not specific units but American numbers would remain about the same?

KEANE: About the same.

HAGEL: So we're talking 148,000 Americans.

KEANE: We're going to have some slight reduction when we bring out the Marines, that's about 9,000 plus. And if a third coalition division comes in place, which we're working on right now, that will also reduce American numbers.

But by and large, American numbers will stay the same with some slight reduction.

HAGEL: Thank you.

There is an interesting story in yesterday's Wall Street Journal, which I assume the three of you have seen, "New Allies Struggle to Fill Role." And it does not paint a particularly positive picture about the force structure coming from international support, because the focus of the story headline, "Strains Countries' Resources," just like our force structure I suspect is under some strain when you look at 33 combat brigades, 24 of them overseas, and you know the numbers better than I do.

HAGEL: But the point of this story is for us to look at allies to come in here and, to some extent, rescue our force structure is probably not realistic. I don't have enough time to go over this. But if you've not seen this, General and Secretary Wolfowitz, you each might want to take a look at this because it is not as positive as we have been led to believe by some of our people here in this government.

One last question to Director Bolten. Is it my understanding, Director Bolten, then you will not be coming up here with a line item for FY 2005 for the Iraqi account in the FY 2005 budget, you will not be coming up with a specific request in that budget next year?

BOLTEN: Well, I can't say what will be in the budget next year. But Secretary Wolfowitz is right, we will be coming with a supplemental for '04.

HAGEL: But not what you intend to do right now, not in an FY 2005 budget request, that you always come up to the Hill early in the year with, you don't intend to have that line item in there?

BOLTEN: I don't anticipate that now because I think it would be, as it has in the past, be needs above and beyond our normal needs for the military more likely to be handled in a supplemental, as we are handling them now.

HAGEL: My time's up. Thank you, Mr. Chairman.

LUGAR: Thank you, Senator Hagel.

Senator Dodd?

DODD: Thank you very much, Mr. Chairman. And let me begin by thanking you, Mr. Chairman, once again, for the series of these hearings have been tremendously helpful and worthwhile.

And I want to underscore the comments of Senator Hagel, as well. General, we have deep appreciation here for the tremendous job the U.S. military has done. And have great appreciation for the tremendous stress that they're facing today with the reports almost on a daily basis of some 49, I guess now is the number, that have been killed since May 1. And we want you to convey to all of your personnel our deep since of gratitude for the tremendous job they've done here.

KEANE: Thank you, sir.

DODD: Let me, if I can in the time that we have available to us -- I'm interested, Secretary Wolfowitz, about what our intentions are regarding a U.N. resolution and additional cooperation. I looked at the numbers here of the June 28 report of the humanitarian assistance we received from other nations. There's some 29 nations that have pledged about a little over $1 billion; about half of that has come from the United States, $565 million.

Looking at the Hamre report which says, and I agree with it, that the next 12 months, in fact, the next three months may be absolutely crucial both in terms of the Iraqi population beginning to see that we can get a handle on all of this. And I think that probably extends to other nations around the globe in terms of their willingness to step up and be cooperative and be helpful, putting aside the question of whether or not we should have sought more cooperation for the coalition before going into Iraq initially. I wonder if you might respond very specifically to whether or not we're going to seek a U.N. resolution for humanitarian cooperation? And if so, when will we do