THE STABILIZATION AND
RECONSTRUCTION OF IRAQ

Hearing Before the
Senate Foreign Relations Committee

May 22, 2003

OPENING STATEMENT OF

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

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

It is a great, great personal privilege to welcome today Deputy Secretary of Defense Paul Wolfowitz, and Vice Chairman of the Joint Chiefs of Staff General Peter Pace.

We've been looking forward to your testimony and to our discussion of the status, policies and plans for Iraqi stabilization and reconstruction.

This is the first of several hearings over the next few weeks that our committee will hold on Iraq stabilization and reconstruction issues. These hearings are intended to help the committee perform its oversight function and to inform the American people whose support is necessary for the United States' efforts in Iraq. The United States military and coalition forces, and the president and his team, including our witnesses today, deserve high praise for execution of a brilliant war plan that brought the combat phase of conflict in Iraq to a decisive and speedy conclusion.

We mourn those who lost their lives in this conflict. We recognize the extraordinary care given to prevent such loss. In fact, the comprehensive planning that went into the military campaign that ousted Saddam Hussein's regime was evident in every aspect of the resounding military victory declared by President Bush on May the 1st.

This military success, however, was only the first step in winning the war in Iraq. The victory is at risk unless we ensure that effective post-conflict stabilization and reconstruction efforts in Iraq succeed over the long term.

The measure of success in Iraq that matters most is what kind of country and institutions we leave behind. Iraq has important ingredients for success: an educated population and tradition of trade and industry, large reserves of oil to benefit its people.

The achievement of stability and democracy in Iraq present an opportunity to catalyze change in the region that can greatly improve United States national security. Stabilizing and reconstructing Iraq are a key to success in this larger context of the Middle East region and in the global war on terrorism.

Given these stakes, the Untied States must make a long-term commitment to achieving our objectives in Iraq. A sustained American commitment would heavily influence the political dynamics of the region and reinforce the credibility of United States diplomacy around the world.

I'm concerned that the administration's initial stabilization and reconstruction efforts have been inadequate.

The planning for peace was much less developed than the planning for war. Moreover, the administration has not sufficiently involved Congress and the American people in its plans regarding the costs, the methods and the goals of reconstructing Iraq.

Congress has already voted $2.5 billion toward the rebuilding effort in Iraq, but we've heard estimates before this committee that the final bill may be over $100 billion.

Now, I believe the process could take at least five years. There is little understanding of the administration's short- and mid-term plans and priorities to address increasingly urgent issues, such as providing food, water, electricity and fuel.

The United States and coalition forces are struggling to create a secure environment to allow civil engineers and humanitarian assistance workers to do their jobs.

But there seem to be insufficient military and police forces to establish this security. Given these circumstances, talk of a reduction in force by year's end is premature.

To restore law and order we may need to put more soldiers and Marines into Iraq, rather than draw them down. There also is uncertainty about the long-term plans for the transition from military to civilian authority in Iraq, and increasing fear that vacuums of authority will lead to sustained internal conflicts in Iraq, and greater instability throughout the region.

We should not underestimate the ethnic and religious rivalries of a long-repressed people. These challenges should be met by a unified command structure that clearly articulates objectives and shares transparent plans for political transition.

And this committee is hopeful that the recent appointment of Ambassador Bremer as the civil administrator of the Department of Defense Office of Reconstruction and Humanitarian Assistance is the first step in a carefully coordinated, integrated plan for dealing with Iraq.

In addition, our plans must be clear about the roles of all forces, agencies and organizations involved in the stabilization and reconstruction process.

The specific responsibilities to the Department of Defense, Department of State and other agencies must be more clearly delineated.

We also want to hear about the administration's plans for generating alliance contributions that will reduce long-term American burdens. Can NATO play a peacekeeping role in Iraq that would allow for the replacement of United States units?

The main criteria for involvement of allies and international organizations beyond the coalition must be their ability to make contributions that will advance our goals in Iraq.

Secretary Wolfowitz and General Pace, we look forward to your testimony today to give us confidence that comprehensive planning is occurring, that our strategy in Iraq is designed to be a springboard to greater regional stability and wider peace in the region.

Achieving such ambitious goals will not be easy, quick or cheap, and we are engaged in nation building in Iraq because it's in our national interest. This is a complicated and uncertain business that requires both a sense of urgency now and patience over the long run.

Before I ask our distinguished witnesses to testify -- and I would like to add that the Honorable Alan Larson and the Honor Wendy Chamberlain (ph) are at the table, and they may be of benefit and of counsel throughout the hearing today, but it's at the specific request of Secretary Wolfowitz that we wanted to make certain that all those who might have information today that would be supplemental were on hand, and we appreciate your presence.

I'd like to call now upon the distinguished ranking member of our committee, Senator Joe Biden.

OPENING STATEMENT OF

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

BIDEN: Thank you, Mr. Chairman.

Mr. Secretary, General Pace, Secretary Larson (inaudible) I welcome you all. Let me take this opportunity to publicly state in front of you, General Pace, and others, what you already know and what the whole country has attested to, and that is how brilliantly our military forces performed.

Their success is a tribute to the skill and courage and the commitment of the administrations, the last two administrations, in ensuring that our fighting men and women are the best trained and the best equipped in the world.

Mr. Secretary, I think it's not an understatement to say that no other member of the administration has been more identified with the effort to change the regime in Iraq than you have. You've been a passionate and articulate spokesman for the view that ending Saddam's regime was a moral, as well as a strategic imperative.

And the mass graves discovered since Iraq's liberation are a terrible testament to the uniquely barbaric nature of the former regime and how right you were about the moral imperative.

It is my hope that the Iraqi people will never again have to endure such brutality, and they can soon, with God willing, enjoy the liberties that so many of us take for granted.

But it also is my hope that the administration recognizes that the reaping of strategic dividends of Iraqi's liberation, Iraq's liberation, from sending a message to reluctant states such as Syria, which you've done well to spreading democracy in the Middle East, which is a task undertaken, to shifting the balance in the region away from radicalism all depends on winning the peace.

So does helping the Iraqi people build the kind of future they deserve.

This commitment has focused on the need to win the peace. And we have as a committee focused on one point in this effort, that we have under both chairmanships sometimes been, not criticized for, but we've been questioned why we focus so much on it, and that was how to win the peace. For the last 10 months it's been the subject of this committee, ever since the hearings last summer.

We've made the simple point repeatedly about Afghanistan. But sometimes I fear that it's fallen on deaf ears.

What we saw in Afghanistan and what, unfortunately, we may be seeing again in Iraq, is that for all our success in projecting power, we are less adept at staying power. We know how to win wars, Mr. Secretary, with all due respect. So far we haven't gotten to as stellar a start, in my view, in winning the peace.

We can't afford to defeat rogue states -- and I'm sure we all agree with this -- to allow them to become failed states, which become breeding grounds for terrorism and instability.

I'd like to read from an article in Monday's Washington Post, which I'm sure you've seen and probably already been questioned on. And of course, the press is always interested in the dogs that bark more than the dogs that don't. But this is not an isolated account.

Virtually every major news outlet has published similar reports, and your opening statement, Mr. Secretary, which I've had a chance to read, which you've been kind enough to submit it to us, in part makes reference to this and takes it on.

And The Washington Post article I'm about to read from reflects the views of many so-called experts who have made the same point.

But let me quote from The Post.

"Military officers, other administration officials and defense experts said the Pentagon ignored lessons from the decade of peacekeeping operations in Haiti, Somalia and the Balkans and Afghanistan."

Continuing to quote, "It also badly underestimated the potential for looting and lawlessness after the collapse of the Iraqi government, lacking forces capable of securing the streets of Baghdad in the transition from combat to post-war reconstruction."

Continuing to quote, "Only in the past week did administration officials begin to acknowledge publicly these miscalculations. They describe continued lawlessness as a serious problem in Baghdad and call for more U.S. forces on the ground to quell the wave of violence that has kept American officials from assuring the Iraqi that order would soon be restored."

"How and why senior military and civilian leaders were caught unaware of the need to quickly make the transition from war fighting to stability operations with adequate forces mystifies military officers, administration officials and defense experts with peacekeeping experience in the '90s."

Continuing to quote, "Defense experts inside and outside the Pentagon say military planners are clearly influenced by the Pentagon's belief, expressed by Deputy Secretary Paul D. Wolfowitz and other senior leaders, that U.S. forces would be welcomed as liberators. They also point to the Bush administration's professed antipathy to military peacekeeping and nation building as articulated by the president during the 2000 campaign when he charged the Clinton administration with overextending the armed forces with such missions.

Defense experts and some military forces also cited the Pentagon's determination to fight the war and maintain the peace with as small a force as possible, noting it reflected Rumsfeld's determination to use the war in Iraq to support his vision for transforming the military by showing that smaller and lighter Army that's supported by special forces and air power, could prevail on the 21st century battlefield."

Later the article says, "Officials inside and outside the administration say the shift in mission should not have been a surprise. In January, the Center for Strategic and International Studies, a Washington think tank, published an action strategy for Iraq that recommended that the Pentagon plan as diligently for the post-war period as for the war.

"To avoid a dangerous security vacuum, it is imperative to organize, train and equip for post-conflict security missions in conjunction with planning for combat," the document states.

In February, an official from the U.S. Institute of Peace briefed the Defense Policy Board, an influential advisory panel on a $628 million developed by the institute and based on peacekeeping experiences in Kosovo.

It called for bringing 6,000 civilian police officers, 200 lawyers, judges, court administrators and corrections officers into Iraq as soon as the fighting stops.

Both proposals according to senior administration officials were matched by databases inside the government, but the Pentagon had no plan for civilian policing assistance in place, and almost no military police on-hand when the fighting stopped in early April.

Last paragraph. Before the war began, General Eric K. Shinseki, the Army chief of staff, told Congress that the, quote, "Several hundred thousand," end of quote, forces would be necessary to stabilize Iraq after the war.

Several days later Wolfowitz told another congressional committee that far fewer troops would be needed than Shinseki's estimate. Quote, "Way off the mark," end of quote.

Now, this is the first time we're hearing this. This isn't the first time we're hearing this kind of thing. The points highlighted in this story were raised during the hearings that the chairman and I have held since last July, and it's no surprise, the secretary, I am sure, will have an answer for this, but I'm confident you have come prepared today to address and rebut several of these items mentioned in the story.

And there's no doubt that we are seeing positive changes in Iraq, that we're making progress, especially outside of Baghdad. But the overall impression has begun to take hold, and justifiably, in my view, that there was either a lack of planning or overly optimistic assumptions or both.

I mean, we were honestly surprised by the rise of the Shiites and the resurgence if fundamentalism. Did you plan for that? Were we honestly surprised by the lawlessness that plagues Baghdad?

And I have to say, Mr. Secretary, in my view there's a real danger that if we do not recover quickly the damage may be irreparable. The Taliban takeover in Afghanistan was a sobering lesson to the people willing to pay almost any price for the basic sense of security.

And the longer it takes us to restore law and order the more likely it is the Iraqis will turn to extremist solutions, in my view. Just as many in Iraq and the region invented the conspiracy theory of the United States wanted Saddam to remain in power, they will now begin to believe that we want to see Iraqis remain in the state of anarchy so that we can control their riches.

We have two competing pressures, I acknowledge. One is the understandable desire to leave as soon as possible and not become occupiers.

The other is to stay as long as necessary to make sure that Iraq can stay together and function on its own without descending into chaos. It is still my view, it has not changed, that only if we satisfy both these demands are we going to be all right.

It would seem to me that the common sense solutions remains invite in NATO, involve our European allies, involve friendly nations in the Arab and Muslim world -- the good start today with the Security Council resolution and its changed emphasis. Only then will we lighten our burden on our forces, spread the risk and prevent us from being seen as occupiers and vastly improves our chances of success.

And, yes, getting endorsement of the much maligned United Nations will make it easier I believe for those governments whose people opposed the war in the beginning and still oppose it to contribute to the building of the peace. And as I said, I'm pleased that the president has made significant progress at the U.N. today, and that NATO has said yes to Poland's request for assistance in the managing, in managing it's sector.

Now if we could show a little magnanimity in victory instead of talking about retaliation and limiting contracts with countries that were not with us in the war, maybe we can get even more friends in on the peace. I don't believe Iraq is some kind of prize.

Iraq, just as Afghanistan -- and I can't say I've seen it yet -- but I think Iraq, just as Afghanistan, the single most important issue, as you all would agree, I suspect is security. And if people are afraid for their lives, if they won't go to work or to school, if shooting and lawlessness reign, engineers, builders and technicians won't be able to make the repairs needed to get the economy going, the oil flowing, civil servants will stay away from their offices and doctors from their hospitals, and the people who drive the buses, run the power plants and pick up the garbage aren't going to do their job.

As good as our solders are, most of them are not trained to be police, to control crowds, to capture common criminals. Where are the military police, the gendarmes? Who is going to do this job?

How could we have failed to learn from the Balkans about the need to bolster our soldier-peacekeepers with properly trained peacekeepers.

So, Mr. Secretary, I read your prepared remarks. I have a number of questions I want to ask you. I've already taken longer than I usually do in an opening statement. But I believe if we had more police, our soldiers would have more flexibility to perform other critical tasks that we've fallen short of the mark on, like security nuclear facilities where we've seen looting.

No one is talking about 100,000 police, as you claim in your statement. We're talking about 10,000. Actually the report suggested to you is 6,000.

And we should have planned for it. And if the security situation is still too dicey for even heavily armed gendarmes, then we need more troops, maybe even several hundred thousand, as General Shinseki had indicated earlier on.

Indeed, I find it a little ironic that you're quoted today as saying that one of the lessons of the Balkans in terms of post- conflict situation is to have forces, quote, "So big and so strong that anybody, that nobody would pick a fight with us," end of quote.

By your own testimony, you say that you're still, that they're still picking fights with us in Iraq, and our land commander, General McKiernan (ph) complained a week ago that he can't stabilize a country the size of California with only 150,000 troops.

So I'm anxious to hear what we're going to do from this point on. I ask unanimous consent, Mr. Chairman, that the rest of my statement be placed in the record as if read.

LUGAR: The statement will be placed in the record in full. I thank the senator. Likewise, senators who have initial statements, all those statements will be placed in the record in full immediately following the two statements that have just occurred.

Let me indicate that Secretary Wolfowitz will present his statement. My understanding is that General Pace's first statement will be included in the record in full, and then we will commence questioning by the senators at that point.

Let me just say as a point of personal privilege that Secretary Paul Wolfowitz is a friend, he has been not only an able American public servant, but one who's certainly guided my understanding of the Philippines during 1985 and 1986, and his own service in Indonesia it was my privilege to visit with him and to understand that country through his eyes and through his witness.

I appreciate very much his service for the country now, and it's a real privilege to have him before our committee today. I call upon you, Mr. Secretary, for your testimony.

STATEMENT OF

PAUL WOLFOWITZ
U.S. Deputy Secretary of Defense

WOLFOWITZ: Thank you, Mr. Chairman. Thinking back on your visit to Indonesia it seems like aeons ago, it was a very different time in the Muslim world, and that biggest Muslim country in the Muslim world.

A lot has changed, not all of it by any means for the better, that's for sure.

Mr. Chairman and members of the committee, your example has consistently demonstrated that America's security concerns transcend party or politics. On behalf of the men and women who serve our country so faithfully and so well, we are grateful for the support of you and your colleagues in both Houses of Congress.

I appreciate the opportunity to discuss with you today the critical task of stabilization and reconstruction in Iraq.

Mr. Chairman, we are committed to helping Iraqis build what could be and should be a model for the Middle East, with a government that protects the rights of its citizens, that represents all ethnic and religious groups and that will help bring Iraq into the international community of peace-seeking nations.

Now that this goal is within sight, Iraq represents one of the first and best opportunities to build what President Bush has referred to in his State of the Union message last year as, quote, "a just and peaceful world beyond the war on terror."

I would note, too, Mr. Chairman, I have heard the president refer privately to the fact that the challenge of winning the peace in Iraq is even greater than the challenge of winning the war, and I think he would share the sentiments that you've expressed in that regard and as your distinguished ranking members has expressed in that regard.

Mr. Chairman, Saddam Hussein was a danger to his people and a support to terrorists and an encouragement to terrorist regimes. His removal from power opens opportunities to strengthen governments and institutions in the Muslim world that respect fundamental human dignity and protect freedom, that abhor the killing of innocents as an instrument of national policy.

Success in Iraq will continue to demoralize those who preach doctrines of hatred and oppression and subjugation. It will encourage those who dream the ancient dream of freedom.

In the last half century those ideals of freedom and self- government have been the most powerful engines of change in the world. They give us hope for further development in the Muslim world, a develop that will benefit every nation throughout the world and bring us important allies in the war against terror.

We cannot afford to fail. We cannot afford to allow Iraq to revert to the remnants of the Baathist regime that now reigns throughout their country in a desperate bid for influence and power or to see that country become vulnerable to other extremist elements.

As the distinguished chairman of this committee said recently, as recently as Sunday at Notre Dame, I quote, "Iraq must not become a failed state and a potential incubator for terrorist cells."

We cannot and will not allow such a threat to rise again. Nor can we dash the hopes of the Iraqi people.

Make no mistake, recent efforts to destabilize Iraq in large measure represent the death rattle of a dying regime. We can defeat them, and we will.

As presidential envoy, Paul Bremer, told me recently in a telephone conversation, if the Baathists have any staying power, let there be no doubt, we have more. We will not stop our efforts until that regime is dead.

Rebuilding Iraq will require similar time and commitment.

Mr. Chairman, I've just returned from a visit to Bosnia and Kosovo and Macedonia. Our main purpose in those first two countries was to thank American troops for their dedication and commitment and to assure the authorities in the region that the United States will see our task through to completion.

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, many years after some predicted we would be gone. And we continue to be the key to stability in Macedonia and Kosovo.

The stakes in Iraq are even greater than in the Balkans -- far greater. And if the stakes are huge in Iraq, there's no question that our commitment to secure a peaceful Iraq is at least equal to those stakes.

Mr. Chairman, I've noted with strong agreement your statements about the need for America to stay the course in Iraq. I applaud your determination and appreciate your support and the support of this committee in helping the American people to understand the stakes that we have and success and what we must do to achieve it.

Mr. Chairman, I'd like to point that today is only 67 days since our Marines and Army forces first crossed the Kuwaiti border into Iraq. It is only three weeks since President Bush announced the end of major combat operations. I underscore that word "major." Because I will explain at greater length later smaller combat operations in Iraq still continue on a daily basis.

Even though the war has not completely ended, we are already started on the process of rebuilding that country. Several months before the war even began we established the Office of Reconstruction and Humanitarian Assistance in order to be able to address the post- war tasks.

As the title of that office implies, much of its early planning and focus was aimed at two disasters that fortunately did not happen. One was to relieve what was anticipated to be a massive humanitarian crisis, and the second to halt the environmental damage that was anticipated from large-scale destruction of the Iraqi oil fields.

Thanks, I think in large measure, to the speedy success of the military operation, the task we face has turned out to be very different. There is no humanitarian crisis in Iraq.

However, a great deal of other work remains to be done, most of it anticipated in ORHA's planning and staffing, work such as restoring rapidly the functioning of the electric power in that country and restoring essential medical services.

Most of these problems are not primarily a result of the war, but rather the result of decades of tyrannical neglect and misrule, where the wealth and treasure of the country was poured into creating palaces, building tanks and procuring weapons of mass destruction instead of caring for the Iraqi people.

That damage has been compounded by widespread looting in the aftermath of the Saddam regime, some of it clearly conducted by surviving elements of the regime for political purposes.

The task before us is more about construction than reconstruction, the building of a society that was allowed to rot for more than three decades by one of the world's worst tyrants.

There is some good news in all of that. The good news is that the Iraqi people will be able to notice improvements in their normal lives long before we have reached the full potential of that country, one of the most important in the Arab world.

Just a few examples, Mr. Chairman. Before the war, large numbers, estimates range from 20 to 50 percent of Iraq's children under the age of 5 suffered from malnutrition. Only 60 percent of the Iraqi people had access to safe drinking water. Ten of Basra's 21 potable water treatment facilities were not functional (inaudible) needed repair. And according to UNICEF, some half a million metric tons of raw or partially treated sewage was dumped in the Tigris and Euphrates Rivers, Iraq's main source of water.

Eighty percent of Iraq's 25,000 schools were in poor condition, with an average of one book per six students, while I would note at the same time in every one of the first 100 or so schools we inspected in southern Iraq, every one of them had been used as a military command post and an arms storage site.

Iraq's electrical power system operated at half its capacity before the war, Iraq's agriculture production had dropped significantly, and Iraq's oil infrastructure was badly neglected.

It will take time to reverse the effects of persistent, systematic neglect and misallocation of resources. But if the task is enormous, even at this very early stage there are grounds for optimism.

I talked this morning on secure telephone with Lieutenant General John Abizaid, the deputy commander of Central Command, one of our most distinguished Army leaders.

He also commanded U.S. peacekeeping troops in Bosnia and in Kosovo, and he reported after his very recent visit to Baghdad that in Iraq we are already way ahead of where we were in either Bosnia or Kosovo at a comparable stage in those deployments.

Despite claims that there were no plans for peace operations in the wake of military operations, Presidential Envoy Bremer and Jay Garner are implementing plans drawn up long before the war to strengthen and rebuild the country.

Assertions that we are already failing, detailed at some length in the Washington Post article that the ranking member read from, assertions that remind me of similar assertions that the military campaign had taken us into a quagmire just one week into the war, reflect in my view an incomplete understanding of the situation in Iraq as it existed before the war, and an unreasonable expectation of where we should be now.

Security is our number one priority, and our most urgent task in the post-Saddam Hussein era is to establish secure and stable conditions throughout the country.

Secretary Rumsfeld reiterated recently, and I quote, "Security remains a number one priority in Iraq, precisely because security and stability are the fundamental prerequisites for everything else we need to accomplish, essential for providing the basics of normal life and services and beyond that to create a climate," and this is important, "where people for the first time in their history can express political views in an atmosphere free of fear and intimidation."

Much of what I read on this subject suggests what I believe is the fundamental misunderstanding about the nature of the security problem in Iraq, and consequently a failure to appreciate that a regime which had tens of thousands of thugs and war criminals on its payroll does not vanish overnight.

The people who created the mass graves that are now being uncovered in Iraq still represent a threat to security, to stability that was not eliminated automatically when the statues came tumbling down in Baghdad.

I read recently in that same article that unnamed officials and experts say that the Pentagon ignored lessons from a decade of peacekeeping operations in Haiti, Somalia, the Balkans and Afghanistan. It seems to me that those anonymous sources ignore the difference between normal peacekeeping operations and the kind of situation we are in now, which is a combination of peacekeeping and low-level combat.

In just the last 24 hours alone -- I emphasis, this is just the report that came in this morning -- in Baghdad the 3rd Infantry Division raided a Baath Party meeting and obtained nine Baathists in Fulajah (ph), which continues to be a hotbed of Baathist activity, some of it with connections to foreign extremists, possibly Al Qaida. An Iraqi vehicle attacked a checkpoint in the 3rd Armored Calvary Regiment, two enemy were killed and one detained.

In the same area, in the same 24-hour period, three Iraqi snipers engaged U.S. troops. And in the third incident in the Fulajah (ph) area, a Bradley was disabled by a rocket-propelled grenade fired from a mosque.

In Baqubah, anther town in north central Iraq, again in the just last 24 hours, the 4th Infantry Division conducted a raid and captured seven Iraqis and seized 15 million dinars.

In Al Kut, a patrol of the 1st Marine Division engaged 20 enemy, killed two, wounded one and captured 11. Fortunately, in this 24-hour period there were no U.S. casualties. But that level of activity illustrates the continued hostile activity that we encounter, much of it apparently associated with elements of the old regime.

To give you some statistics, in the last two weeks there have been 50 hostile incidents, 37 of them initiated against our troops. We've had 17 wounded in action and one killed, and it's since the end of major combat activity.

In short, while major combat operations have ended, American soldiers continue to be shot at almost daily. While we have made substantial progress in catching the people on the black list, there's still additional work that needs to be done.

We face in Iraq a situation where a substantially defeated enemy is still working hard to kill Americans and to kill Iraqis who are trying to build a new and free Iraq, because they want to prevent Iraqi society from stabilizing and recovering. Bizarre as it may sound, it would appear that their goal is to create nostalgia for Saddam Hussein.

We cannot allow them to succeed. We need to recognize that this situation is completely different from Haiti or Bosnia or Kosovo, where opposition ceased very soon after our peacekeeping troops arrived.

We do not have the choice in Iraq of avoiding confrontation with these repressive elements of the old regime. We have to eliminate them, and we will do so, but it will take time.

This task requires more than just military policemen. There's a very difficult balance to be struck, particularly in Baghdad, between providing ordinary civil order forces on the streets, which we are doing, and being prepared to deal with sniper....xxxxxxx... more than just military policemen. There is a very difficult balance to be struck, particularly in Baghdad, between providing ordinary civil order forces on the streets, which we are doing, and being prepared to deal with snipers and armed bands.

CENTCOM is making that transition. There are now 45,000 coalition military personnel in the Baghdad area, approximately 21,000 of whom are actively involved in security operations.

In just the last 24 hours alone, the 3rd Infantry Division has conducted nearly 600 patrols, secured 200 fixed sites and manned 85 check points.

Again, General Abizaid reports from his recent visit that we are already seeing much more commerce, many more people on the street and much shorter gas lines.

I think of importance, in Sauder City (ph), the notorious Shi'a slum in Baghdad of more than 1 million people that used to be known as Saddam City, the people are already reporting that their conditions are better than they were before the war. Of course that's not hard to do in that part of town.

We are making progress. In my most recent conversation with Presidential Envoy Bremer, he reports that while the security situation is serious, and unfortunately still imposes very severe restrictions on the ability of U.S. personnel to move freely, and that is a restraint on our reconstruction efforts. Baghdad more generally is not a city in anarchy. Shops are open and the city is bustling with traffic.

We have gotten some 7,000 Iraqi police on duty in Baghdad and reports of looting and curfew violations and gunfire are decreasing.

But one of our principal challenges is that we have been able to make much less use of the old Iraqi police force than we had planned. It turns out that their leadership was hopelessly corrupted by the old regime and that the policemen themselves seem to have been better trained to raid people's homes at night than to patrol the streets.

It's important to distinguish the security situation also in different parts of the country. Most of the attention, appropriately enough, is on Baghdad, and there's no question that the capital is one of the keys to the future of the country. But we would make a mistake if we saw it as the only one.

Conditions in other parts of the country are generally better. For example, in the south, the second-largest city in the country, Basra, with a population of almost 1.3 million people, most of them Shi'a, are overwhelmingly grateful to be free of Saddam's tyranny, and the city is largely stable.

In Nasiriyah, local police are now armed and the force has grown to over 600.

In Diwaniyah, nearly 300 Iraqi police officers have been hired and the coalition is installing two 911 emergency phone lines.

In northern Iraq, the two large cities of Mosul and Kirkuk, with a combined population of more than 2.5 million, are largely stable thanks to the successful efforts of Major General Dave Petrayas (ph) and the 101st Air Assault Division.

There remain some problems in those two cities, most significantly problems arising out of the property disputes created by Saddam's policy of Arabization, a kind of slow motion ethnic cleansing.

But we are taking political and legal measures to try to address those problems. We sent a study team led by former U.S. Ambassador to Iraq William Eagleton that included distinguished experts from Poland, the Czech Republic and Bosnia, countries that have had experience with these kinds of property restitution problems in the past, and they will come up with some recommendations of how we can address those problems by legal means and discourage the use of force.

Finally, if you'd indulge me, Mr. Chairman, I'd like to give a little detail about what I think is potentially a very important success story in the somewhat smaller city -- although it's still a city of half a million -- Karbala.

Karbala's significance far exceeds its size, because as one of the two holy cities of Shi'a Islam, it has enormous potential to point the direction for Iraqi society, or at least for the Shi'a segment of Iraqi society.

There, the 3rd Battalion of the 7th Marines has worked effectively with local officials to create what are reportedly excellent conditions of law and order in that town. A political official from our embassy in Kuwait visited Karabala recently and he reported that, and I quote, "With support from U.S. military forces, moderate reformers are engaged in an audacious experiment aimed at building democratic rule in one of Shiism's two holiest cities.

In cooperation with civil affairs teams from 3rd Battalion 7th Marines, they have achieved notable successes.

That report goes on to note that the infrastructure in Karbala is largely functioning, electricity service has returned to pre-war levels and almost all homes have running water. The three local hospitals are open, although they admittedly lack basic medicines. U.S. Marine engineers are repairing local schools, hospitals and the water plant.

Most significantly, in addition to fostering the re-establishment of basic public services -- and this I think is particularly important -- the Marines have supported the emergence of a functional, competent provisional government in Karbala province that advocates -- remember this is in the heart of Shi'a Iraq -- that advocates a secular democratic future for that country.

Significantly, the leadership of this new secular and democratic local government is a religious figure, Sheik Ali Abdul Hassan Khamuna (ph). He's not only a Saeed (ph), which means a descendant of the Prophet Mohammed, and a member of a prominent local tribal clan, but apparently no contradiction, he is also a member of the secular intellgencia.

The council elites contain other senior tribal figures, including five other Saeeds (ph), but also representatives of the secular intelligentsia and business world, including a university professor, a civil engineer, a merchant, a retired army colonel, several lawyers, sociologists and opthamologists.

I'm going to ask if there are any women among them, because that would be a good sign of progress. But I think that's pretty impressive by itself.

The religious intelligentsia is represented by a sheik who endured 12 years in Saddam's prisons for his part in the 1991 uprisings.

The fact that a new day has dawned in Iraq, as no where so evident as in the recent Abrahim (ph) pilgrimage in the cities of Karbala and Najaf. For the first time in 26 years more than 1 million Shi'a pilgrims walked to those holy cities without fear and without violence.

In judging the success or failure of the military plan for dealing with the aftermath of the collapse of the regime, one cannot judge it against a standard of unachievable perfection. There is no plan that could have achieved all the extraordinary speed of this one, and at the same time been able to flood the country with military policemen. Choices had to be made.

I think we made the right choices, choices that saved both American and Iraqi lives and prevented damage to the environment and to the resources of the Iraqi people.

WOLFOWITZ: Let me just say a little bit about those plans. Staring in January of this year, we recruited Jay Garner to stand up the Office for Reconstruction and Humanitarian Assistance.

To my knowledge, this is the first time we have created an office for post-war administration before a conflict had even started. It was obviously a sensitive matter, because we did not want to do anything that would undercut the efforts to reach a diplomatic resolution to the crisis presented by Iraq's defiance of Resolution 1441.

For that reason also, we did not brief key members of Congress perhaps in as much detail as we would have liked. We should certainly have ensured that Jay Garner briefed you before he left for the theater.

We will work hard to do our best to remedy those errors, including arranging secure video teleconferences with Envoy Bremer and Mr. Garner, as appropriate.

Having said that, let me also say we picked Jay Garner because he had demonstrated at other times in his career, most significantly when he was commander, when he was a commander in the extraordinarily successful operation in northern Iraq in 1991.

A capacity for putting organizations together quickly and energizing them and focusing them on getting practical tasks accomplished.

Fortunately, as I noted earlier, a great deal of our pre-war planning turned out not to be needed because there were no massive food shortages, there was no massive destruction of oil wells or gas platforms.

And I believe in large measure that is attributable to the success of the military plan.

I'd like to briefly mention some of the features of that plan that I think contributed to that success.

At the heart of the military plan was the imperative to defeat Iraq's major combat forces. The emphasis was on speed. We consciously chose to keep our force size relatively small, limiting the amount of people and material deployed on the initial thrust into Iraq.

WOLFOWITZ: This plan gave great flexibility. Those forces quickly plunged deep into Iraq, bypassing a good portion of the country in a push to Baghdad. We recognize with the choice that we were leaving problems in our rear.

Despite the fact that Saddam's regime had strategic warning of an impending attack, because of our speed, coalition forces were able to achieve substantial tactical surprise.

In short, we began the war with a time table the regime did not expect, and we combined it with a speed that made it difficult for the regime to react and regroup. The enemy was never able to mount a coherent defense, nor was it able to blow up dams, bridges and critical infrastructure or use weapons of mass terror, perhaps because it was caught so completely off guard.

As a result, in less than three weeks we were in Baghdad, and with the toppling of Saddam's statute, history's annals tallied another victory for freedom akin to the fall of the Berlin Wall and liberation of Paris.

Our plan worked even better than we could have hoped.

For example, in Baghdad we tried a few armored raids to probe and shock the Iraqi army. We had not expected to see resistance collapse completely as a result.

When those armored raids actually caused the collapse of Iraqi resistance, we capitalized on our success and moved into the heart of Baghdad -- a decision that testifies to the flexibility of the war plan as well as its speed.

Mr. Chairman, not only did this plan achieve its military objectives, this plan saved lives, American lives and Iraqi lives. The unprecedented use of precision not only destroyed the intended military targets but protected innocent lives and key infrastructure.

And the Iraqi people stayed home. They understood our military actions were directed against Saddam and his regime, not against them.

As a result, there is a list of crises we have averted, successes that are measured as much by what didn't happen as what did.

There's no food crisis in Iraqi. There have been no major epidemics. There was not the refugee crisis that many predicted would destabilize the region.

There was no wholesale destruction of oil wells or other critical infrastructure after the war began. And the regime did not use weapons of mass destruction.

WOLFOWITZ: Mr. Chairman, let me say a few words about costs, but more importantly about how we're going to pay for them.

The costs are difficult, of reconstruction, are difficult to estimate since many of the problems we face resulted from decades of neglect and corruption.

But there are a number of funding sources that can help Iraq. First, there is $1.7 billion in formerly frozen Iraqi government assets in the U.S., that the U.S. government vested by presidential order.

Second, there is about $700 million -- and the number grows almost daily -- in state- or regime-owned cash that has so far been seized and brought under our control and is available to be used for the benefit of the Iraqi people.

Third, once Iraqi oil exports resume, and with the passage of the U.N. Security Council resolution today, they can resume immediately, the proceeds from those sales will be devoted entirely to the benefit of the Iraqi people, except for a 5 percent fund that the U.N. is setting aside for reparations and from past conflicts.

Under the terms of the proposed U.N., under the terms of the recently passed U.N. Security Council resolution, assets from two additional sources would be placed in the Iraqi Assistance Fund, and there have been public pledges from the international community for more than $600 million under the U.N. appeal, and nearly $1.3 billion in other offers of assistance for food, health, agriculture and security sectors.

Indeed, I believe the passage of the resolution today is an important watershed in making it possible to get contributions on both military assistance for stability operations, and on the non-military side for reconstruction from many countries around the world.

Mr. Chairman, just a few words about the political side, which in the long run will turn out to be the most important, although it is not at the moment our most urgent task.

But we continue to work toward the establishment of an Iraqi interim administration, which will assume increasingly greater responsibilities for the administration of Iraq.

The IIA will draw from all of Iraq's religious and ethnic groups and provide a way for Iraqis to begin to direct the economic and political reconstruction of their country.

But the interim administration's most important responsibility will be to set in motion a process leading to the creation of a new Iraqi government, for example, by setting up local elections, drafting a new constitution and new laws.

WOLFOWITZ: This is a process that foreigners cannot direct. It must be a process owned by Iraqis.

In the final phase of our plan, an Iraqi government would assume full sovereignty on the basis of elections in accordance with a new Constitution.

Our intention is to leave Iraq in the hands of Iraqis themselves, and to do so as soon as we can. As President Bush has said, the United States intends to stay in Iraq as long as necessary, but not a day longer.

To those who fear that Baathists and Iranians may intervene when we have left, our message is simple. While we intend withdraw as rapidly as possible from Iraqi political life and day-to-day decisions, we will remain there as an essential security force for as long as we are needed. I would also caution that this process will take time, and it is necessary to get it right.

Mr. Chairman, currently 24 coalition countries are providing military support, some of that publicly, some of it is still private. Thirty eight nations have offered financial assistance, totaling now $1.8 billion. And very importantly, a number of countries have made commitments to providing brigade-size and larger forces to stability operations once the U.N. Security Council resolution is passed, as has just happened.

I would just like, before I conclude, to note that there have been very significant successes already as a result of the efforts of ORHA and our pre-war planning.

Some Iraqis today have more electric service than the past 12 years. For the first time since 1991, the people in Basra have electricity 24 hours a day. When the national grid backbone is operational later this month, Baghdad will be able to receive excess power from the north and the south.

And with removal of U.N. sanctions, we will have the ability to start exporting, we will now be able to use Iraqi natural gas to produce another 700 megawatts of power.

Primary schools throughout Iraq opened on May 4th. Jay Garner is hopeful that secondary schools and universities will open soon.

We have started emergency payments to civil servants, to more than 1 million of them. Privately hired stevedores have begun all floating operations and put rice directly on trucks; currently over 1,500 tons per day are all floated.

And I could go on with more and more. A great deal is happening. More is happening every day.

Let me just conclude by mentioning the important subject of the energy infrastructure.

WOLFOWITZ: Obviously, one of the keys to getting Iraq up and running as a country is to restore its primary source of revenue: its oil infrastructure. As with many other facets of life in Iraqi, this infrastructure had been allowed to decay to a surprising degree.

Fortunately, we averted the destruction of almost all of the Iraqi oil wells, and a great deal of repair work is under way to ensure that operations can safely resume.

While the coalition will be involved at the outset, the goal is to have production and marketing responsibility in the hands of a stable Iraqi authority as soon as possible.

The lifting of the U.N. sanctions, which is something we've been working hard to achieve, the lifting of those sanctions today not only represents an opportunity for Iraq to start earning the oil revenues that can help rebuild that country, it also allows us to relieve shortages of gasoline and cooking fuel, since the absence of any available storage capacity had meant the refineries could no longer operate.

Mr. Chairman, let me close by thanking you for holding his hearing and thanking all the members of Congress for the outstanding bipartisan support that we've had since the beginning of this war, indeed, since the beginning of the war on terror.

As I noted in my statement, we are still fighting at the same time that we're trying to win the peace. And as you noted in your article today, transforming Iraq will be quick or easy.

Our victory will be based, as you put it so well, on the kind of country we leave behind. The stakes for our country and for the world are enormous, and the continued commitment of Congress and the American people is essential.

I appeal to you and your colleagues for your continued support and your leadership in this historic effort.

Thank you, Mr. Chairman.

LUGAR: Well, thank you very much, Secretary Wolfowitz. The committee will have seven minutes for a member question period at this point. And I'll ask the time keeper to start the seven minutes on my questions.

But I want to start, really, with some comments.

I appreciate very much the testimony you have just given. As you would confirm, we visited two weeks or so ago, and my plea to you was to come before the committee, as you have today, with a comprehensive statement.

LUGAR: To my knowledge, this is the first time at least I've been privy to an all-points view of what is going on in the country, and the American people, I think, will benefit from the fact you've given us some good news. There have been remarkable achievements that by and large are unrecognized.

Likewise, I appreciate very much the thought that, whether it be through secure television, there could be regular reports to this committee, but for that matter to other senators, too. We had the benefit, and we appreciate that, from the Department of Defense daily up in S407, progress reports on the war. And most of us were there at 8:00 in the morning, as you were and those of the military who came over. Tremendously important in terms of the confidence of all of us in what was occurring and the support.

And I would just simply say, that's tremendously important in all this period.

You could say, well, this is going to go on for a long time, daily briefings, and we understand that. It has to be a reasonable situation. But there have to be some ways in which the good news is conveyed, in addition to things that you have to say, by some of us, even with our own interpretations.

Tom Friedman, New York Times, has written about the fact, as you've suggested today, we've discovered the Iraqi people were really beaten down. This is a situation which was not hopeful and prosperous about anybody except for the regime. And here you have people who, as you pointed out, haven't had electric power, some of it historically ever; a lot of them not for quite a long while. A really beaten-down situation.

Not only that, but in terms of morale of the people. These are folks that are not just leaping to take advantage of political action, volunteering to run in the next election or to take part in the council.

A good number of them, obviously, and unfortunately most of the middle class, as I've observed it, hanging back, wondering if Saddam is going to return, but if not Saddam, the Baathist Party types. who you have had to battle sort of day by day, are not going to do them in. This is still a repressive situation in the perception of many people.

So they have not only inconveniences of lack of power or lack of security, but they're really still not sure who's in charge, and they're not sure about our staying power to make sure that the bad people don't finally overcome.

LUGAR: And that can be changed by the president saying, as he said to many members of Congress today, Stay the course. We are going to be there as long as we need to be.

And when that assurance comes, and you've given it to us again and with a lot of supporting detail, that's tremendously important.

Now, likewise, the perception by Mr. Bremer that the Baathists people are not the ones that are going to restore democracy or even bring about any vestige of it, and that they are the enemy. And there are people I know within our own government who have been sort of battling back and forth on terms of freedom of speech and freedom of all this, and I understand that. It's an honest philosophical (inaudible).

But here we've got people who are cowed in the country by recognition as the same types that's still around. But then how do you develop others? Very tough job on the political side, quite apart from the security arrangements. Once again, the right kind of personnel to be there to do these things.

So you have recognized these things, and I won't reiterate them because I appreciate the comprehensive statement you have made, which I hope all of us will study.

Let me just say that the oil situation that began to find some clarification with the Security Council and Secretary Powell is certainly to be complimented on the remarkable work he has done, and he has been supported by you and the Department of Defense, obviously the White House. But collectively that was a very important victory in a short period of time for everybody who were the naysayers to come around and say sanctions will be lifted. The United States, Britain and those who fought the war are in charge. We'll review it in due course. Experts can happen.

Those are very big things. For those that are always diminishing American diplomacy, you know, I hope they take notice. Remarkable change.

However, having said that. If you were chief executive of Iraq oil today, the problem still is -- and you may clarify this a little bit more for us -- somebody has to deposit the money, somebody has to disperse the money, make decisions as to who it goes to. And you've set aside 5 percent for reparations and past wars, and 95 percent is out there.

LUGAR: The transparency of all of that is obviously important.

And overhanging this is the debt situation.

As you take a look, if you're a chief executive of this, how much do you put in repair of that which is there, and it's been in disrepair even before damage and looting?

How much do you put in new investment? And how much do you allocate to debt?

Now, I had a meeting yesterday with a gentleman who's been an adviser to Russian rulers, as they come and go, and his suggestion was, as perhaps Secretary Powell found, the Russians were deeply interested in contracts.

And when it comes to debt, that's maybe something else, a lot of experience with both, they would like a lot of their debt forgiven, so would a lot of other nations that are involved in this.

But with that overhanging problem there, somebody has to be in charge, just simply of the fiscal situation of the country. And the allocation of resources, the business management of it.

And there can't be temporizing, in my judgment, about that, that this is a very serious thing right now in terms of the confidence level that this is going to come out.

Now, in doing that the papers today point out the Kurds in the north, very worried about allocation of these oil resources for, say, relief of all of the country.

They would say, this is ours.

Well, once again, we're back into what does it mean to be an Iraqi? Is there a sense that Iraqis want to be Iraqis?

Most would say, sure, and the testimony we've had is, that there's a very cultivated sense of that over decades, but still the ability to come together and make compromises, to begin to think, as we would like, for Iraqis to think of themselves as a cohesive society and country, that are prepared to have great diversity in one government, as opposed to a theological tyranny.

Now, all of these things you've thought of, and you have to every day. But specifically, on the question of the oil money and the management resource.

LUGAR: That's not the only revenue, as you pointed out to some others. But I'm not sure how many taxes are being collected of any sort.

On the fiscal side, on the income side, what we can expect and how people manage that, in the absence of a legislature, a congress or a president, will we make those decisions? Are they being made? Or is there planning in a fiscal sense for the country presently?

WOLFOWITZ: If I could say first of all just very briefly, your suggestion of having if not daily at least regular briefings up here I think is an excellent one. I am impressed. The lady is sitting behind me with OSD representative. It's a daily one we had during the war, and it did seem to really establish a good pattern of communication.

And maybe daily is too often, but let's work together and figure out what is the right schedule...

LUGAR: Appreciate that.

WOLFOWITZ: ... because it helps us. And it isn't just to transmit good news. There's plenty of bad news too, and we can use help (inaudible) where we need the help most of all.

(CROSSTALK)

LUGAR: ... prepared to share as opposed to being ultra-critical, prepared to be supportive.

WOLFOWITZ: And I think it's very important -- I noticed this on a trans-Atlantic meeting in Europe over the weekend -- that a lot of our allies are reassured when they hear that, in fact, we intend to stay the course.

I don't know why, after what we've done in Bosnia, they doubt it. But at any rate we need to say it, there's an opportunity to do it, and I appreciate that.

And I think you were correct in signaling out Envoy Bremer's decree on de-Baathication. We are hearing already that just the mere declaration has had a big political impact.

On the key questions you brought up about these decisions about -- and there are many decisions. One, there are decisions about how you get to the oil sector up and running and how you invest to repair it. And I am pleasantly surprised to discover that we've found an Iraqi -- his name I mentioned in my testimony, yes, Tamir Godbond (ph) -- and I am told that he had a senior position in the oil ministry despite his refusal to join the Baath party.

It's pretty remarkable. It also says he must be extremely competent because they didn't tolerate that in other people.

But he will be running it. We have an advisory board and an American adviser who will help him make decisions and give us some guidance as to whether we think those are the right decisions. Ultimately, for the time being, he is under the authority of the coalition provisional administrator, who is Ambassador Bremer.

The issues about how the revenues get spent and invested are, again, under the authority of the coalition provisional administration. The key individual under Ambassador Bremer is a very distinguished American official, the former deputy secretary of the Treasury, Peter McPherson, who was the president -- still is, I guess, he's on leave from Michigan State University.

We have had some extraordinary Americans volunteer to help us out there. A former commissioner of the New York police is going to help us with the police job.

WOLFOWITZ: Peter McPherson, I guess, for the time being is the de facto finance economics minister for the provisional authority.

But I would also emphasize, we're looking for help everywhere we can get it. And ORHA right now the current staffing is 617 U.S. and 471 coalition, about 1,000 people and about 40 percent non-Americans. And I'm pleased at that 40 percent number.

I've been pushing particularly hard to tap into the expertise, which I think is substantial, of our friends in Poland and other Central European countries who've had to undertake this kind of tricky economic transition themselves and have a better sense of the trade- offs than we have with our experience of running a functioning economy.

But it's a big effort. There are a lot of decisions to be made.

What I tried to describe, maybe too briefly, in my statement is, there are two things that have to happen, and they need to happen in parallel. On the one hand, we need to make sure that the country runs. And it's not that we want this responsibility, but we know that if we don't take it on and with some unity of command and some ability to make decisions, things will limp.

On the other hand, there needs to be a political process that eventually produces a legitimate government. And in that process, I think our main function is just to make sure that it can take place under secure conditions, which is a long way from where we are now.

Your point about people being afraid is, I think -- I mean, if members of ORHA have to worry about traveling in the streets, the ministries, imagine what somebody has to think about not if they're going to the shops in Baghdad -- people are doing that on a daily basis -- but if they want to speak up in support of the coalition, they may get killed. It's still a problem.

So creating secure conditions and I think also setting the boundary lines. I think we can say that people who show that they're not willing to play by democratic rules are not included in this process. But inside the process, I think we need to let Iraqis make decisions.

LUGAR: Thank you.

Senator Biden?

BIDEN: Thank you very much, Mr. Secretary.

Let me begin by saying that, in a sense, you're the wrong guy for me to be questioning. And what I mean by that is, I have known you for 30 years. One of the things that I am absolutely convinced about is your absolute conviction that we have to be build a stable country there as long as it takes.

I remember sitting at a couple of conferences on whither NATO and what about Bosnia. And I remember you being critical of the candidate for president then, saying we had to get out of Bosnia and we had to get out of the Balkans during the last campaign.

BIDEN: And so...

WOLFOWITZ: Excuse me. The candidate was not saying that.

BIDEN: Well...

WOLFOWITZ: Sorry. Let's not go into that.

BIDEN: Well, it's important to go into it for this reason. One of the things I'd like to know is, when is the president going to tell the American people that we're likely to be in the country of Iraq for three, four, five, six, eight, 10 years, with thousands of forces, and spending billions of dollars?

Because it's not been told to them yet. They have not been told. They were not told before we went in, and you knew we were going to have to stay there and he knew. It's not been told to them since then.

And we are facing a $400 billion deficit and we're going to be left holding the bag here a year from now, when the military needs and the administration needs considerable input in dollars in Iraq, and the American people aren't going to understand why we're not spending it on education, and instead we're voting to spend it, as I will vote to spend it, on Iraq.

And that's the reason why I raise the question. You seem to want it both ways. You point out that, Why would anyone doubt our resolve? We've been in Bosnia for eight years. And the problem is a lot less significant and less difficult in Bosnia than it is in Iraq.

That would seem to compute that we're likely to be Iraq for a long time -- a long time. If the problems are so much more complicated, which they are, in, as you point out, in Iraq than Bosnia, then we're going to be around a long time.

I don't know about you, but my home constituency doesn't understand that. They think Johnny and Jane are going to come marching home pretty soon. Nobody in this country thinks we're going to be there for the next four, five, six, 10 or eight years, like in Bosnia.

And so I would hope the president at some point will make our job easier continuing to support him, which I have done on every single step of the way in his effort here, and tell the American people. When are you going to say that?

Aren't we likely to be -- I'm asking you -- are we likely to be in Iraq for at least the next four years and in significant numbers with significant monetary commitment? Is that likely?

WOLFOWITZ: Senator, the problem is it is very difficult to predict. It is possible, and it's possible that things will go faster.

BIDEN: Is it possible at all, Mr. Secretary, to be out of there in the next two years?

WOLFOWITZ: Not necessarily out of there, but I don't know how many forces we're going to need in the next two years. Things are going to be very different two years from now than they are now. As a matter of fact, things are very, very different in Bosnia now than they were eight years ago.

WOLFOWITZ: And let me be clear: I didn't say that this is more complicated than Bosnia. I said the stakes are much higher than Bosnia.

In some respects, it's less complicated. It was a functioning country, and in important respects it has enormous resources which...

(CROSSTALK)

BIDEN: With nothing functioning now, you point out that it's much more devastated than we thought it was going to be? There is little infrastructure yet?

WOLFOWITZ: There is huge problems, but there are huge resources.

BIDEN: What are the -- I just attended a meeting with oil experts, with Mr. Larson (ph) present and with Ms. Chamberlain present, where the following numbers were -- to get it -- for us just to get to the point where we're talking about increasing to one million barrels per day export, there's going to be a need for a $5 billion investment in the oil fields to get to that point. To get to the point where you'll build up production to 5.5 million barrels per day, it is estimated by the folks testifying today -- and I ask either of your colleagues if they disagree with it -- seven to 10 years and an investment of $30 to $40 billion in the fields.

Now nobody I know in the oil business is suggesting that there are going to be revenues that remotely cover the cost of rebuilding Iraq coming from those oil fields in the next three years. I've not heard anybody.

For the record, I'd love you to submit -- take as much time as you want -- any evidence to suggest that a significant part of the reconstruction of Iraq required in the next three years will come out of oil revenues from Iraqi oil.

Would you be willing to do that for the record?

WOLFOWITZ: Be happy to do it for the record.

BIDEN: OK. Because I've not heard a single person suggest that yet. Not one.

And I just wonder when we're going to start leveling.

Look, you want us to continue to support you. You wonder why our European friends say, how they could doubt our staying power. Every European I've met with for the last year, including as recently as two days ago.

Look at Afghanistan. Look at Afghanistan. You make this case that somehow this is so fundamentally different that Bosnia.

BIDEN: Well, how about Afghanistan? American soldiers are still being shot at. Al Qaida's still alive and well. The Taliban didn't go anywhere. Those 60,000 forces we talked about, I'm told that they're now living in mud huts all throughout there. They're not all in Pakistan or into Iran. They are still there. And it's a shambles.

WOLFOWITZ: I wouldn't agree that it's a shambles.

The problem, if you want to shift to Afghanistan for a...

BIDEN: No, no. I want to shift to the comparisons. Tell me how you're using -- you're suggesting that the reason why you can't bring in large numbers of police and why you didn't plan on doing that is because, it's implicitly incompatible with the environment that they're in. What we really need are soldiers there, not police there. And I'm suggesting to you the same situation exists...

(CROSSTALK)

WOLFOWITZ: ... yes, three months from now it may be very different. Three months from now it will be very different.

BIDEN: Well, tell me the plans you have that so if it is different in three months you'll able to drop in 6,000 police officers. Do you have a plan?

WOLFOWITZ: I point you to an example of Karbala. There are about 1,000 Marines in that city of half a million, and there is effective law and order in Karbala. So that is one example of how it might work.

I might ask General Pace to address the issue of where we might be three months from now in terms of...

(CROSSTALK)

BIDEN: With all due respect, I respect the general. But his judgment about where we're three months from now is going to be better than most, but still it's going to be a guess where we're going to be three months, and I want to know where we are today. That's what I'm worried about. I'm not worried about anybody being able to predict three months from now.

What I'm concerned about is that -- look, I met with the British defense minister. What's different in the city that you acknowledge is the most stable, what are they doing differently there than we're doing in Baghdad?

WOLFOWITZ: Well, they've been there a lot longer. They're dealing with the population...

(CROSSTALK)

BIDEN: ... you mean, a longer? How much longer have they been there, a week, two, three?

WOLFOWITZ: Well, I think it's closer to a month.

But they're dealing with a city which is very different in its composition, which is much less friendly to the kind of Baathists elements we're having trouble with. It's actually -- Basra is probably comparable to Zarda (ph) City, the large neighborhood in Baghdad, roughly in population, roughly in ethnic composition. And General Abasaid (ph) reports that Zarda (ph) City is largely stable.

We are dealing particularly in central and north-central Iraq with armed opposition by there's some 30,000 -- I don't know the exact number -- but it's several tens of thousands of people who were in the four major security organizations that kept an eye on one another and kept an eye on the Iraqi people.

WOLFOWITZ: They're murderers, they're torturers, their goal is to destabilize the country. We don't -- those people have been largely eliminated in Basra.

At some point they will be eliminated even in Baghdad and then the numbers required to do this kind of work will be a lot smaller. But it is not a simple police function, it is something closer to light infantry.

BIDEN: I don't know why we can't walk and chew gum at the same time, have police in the city and forces ...

WOLFOWITZ: Well, we are. I can go back and read you the statistics I read about how many people are in Baghdad today, how many of our forces are there, I think and it's 21,000 that are doing patrolling duties, and the number of patrols ...

BIDEN: They're not trained to be police.

WOLFOWITZ: They are trained to do this kind. This is not police work; this is something closer to urban combat, and they are trained for that. General Pace?

BIDEN: Looting is not urban combat, but I'll come back to that later.

PACE: Sir, I would say it is certainly not time driven, it's event driven. We've been in Basra longer than Baghdad, we've been in Mosul shorter than Baghdad.

Both Basra and Mosul are in better conditions security wise than is Baghdad. Baghdad has, in addition to all of its major city problems, about 20,000 prisoners who are in -- criminal prisoners -- who were in jail, who were released during the course of the war, who have concentrated a lot of their activities.

Just last night, just the patrols last night ...

BIDEN: But they're thugs, they're not Baathist.

PACE: They are thugs, and they need to be policed up, and about 104 were policed up last night.

So it's a combination of military and police. The police forces are being recruited, they are being trained, and it was a judgment going into Baghdad as to whether or not you waited outside the city to have enough forces that when you went in you could have complete control of the city, and then potentially have the fortress Baghdad fight that none of us wanted, or to take advantage of the opportunity of the speed and precision that we had to get in there quickly, take it down quickly, not destroy a city with 5 million people in it, and accept the problem of having a less secure environment than we'd like to have.

So on balance, I'd much rather be where I am today at the two- month mark worrying about police action than at the two-month mark still pounding away at a city because we waited too long.

BIDEN: In the second round, I'll point out why I don't believe they are incompatible.

LUGAR: Thank you very much, Senator Biden.

Senator Hagel?

HAGEL (R-NE): Mr. Chairman, thank you.

To our distinguished witnesses, thank you for coming today, and congratulations on the good work that you and your colleagues have accomplished so far.

Mr. Secretary, General, give our best wishes and our congratulations and thanks to our armed forces...

PACE: Thank you, sir.

HAGEL: ... our men and women who have achieved a spectacular victory.

To our State Department representatives, you had a big day today at the United Nations, and give Secretary Powell our best and our congratulations.

As Chairman Lugar pointed out, this was important for America today and important for Iraq -- and, quite frankly, important for the United Nations, as we rebuild alliances that were fractured as a result of Iraq and strengthen these institutions that I believe will be critically important to the outcome in Iraq, as Secretary Wolfowitz has talked about today.

Mr. Secretary, you went into some detail in the last part of your testimony about the political situation in the future of Iraq, and I paraphrase your comment, I believe you said something to the effect that that may be overall the most important dynamic as you stabilize Iraq and do the things that you are doing to secure Iraq, because it will be the political process, as you note, that determines what kind of Iraq we have, and that will ripple across the region.

Today's front page of The Washington Post, which you've seen, let me quote just quickly a paragraph to set the question: "Paul Bremer, the chief U.S. civilian in Iraq, said today that the selection of an interim Iraqi government is at least seven weeks away, prompting aspiring leaders from Kurdish and returned exile groups to warn that Iraqis are tiring of the six-week-old U.S. occupation and they want swift movement toward self-rule."

Yesterday's headlines in The New York Times: "Iraqi Political Leaders Warn of Rising Hostility if Allies Don't Support an Interim Government."

Would you share with the committee what we are doing to get to that end? I recognize, we all do, it's imperfect, it's difficult, for all the reasons you mentioned and others.

HAGEL: But I think this is a pretty serious statement coming from serious allies of ours. The two main Kurdish leaders, whom Senator Biden and I met with in December when we were in Iraq, they are critical to the future of Iraq. You all know that.

Some of the exile leaders who you have strongly supported, Mr. Chalabi and others, obviously are a bit nervous about this.

Can you tell us how we are going to get there?

WOLFOWITZ: First of all, let me point out that as important as that parts is, the most urgent requirement remains the creation of stable and secure conditions. And in fact, while it may be the case that some Iraqis, and certainly the gentleman you quoted, are impatient, or at least they want to say they're impatient, I think on the whole we hear more from Iraqis who are impatient to make sure that we're doing something about providing security and providing basic services, and there is a tension between those Iraqis who want us to be in charge and who frankly are used to the government taking care of things for them and those Iraqis who are impatient to be able to run their own affairs.

I don't think it's an accident that the ones who are most impatient on the latter point are the ones who've had the experience of 12 years of pretty free conditions in northern Iraq.

I know Ambassador Bremer went out there -- at the time he went out we had, as I think also noted in that article, an expectation that we might be able to stand up an interim administration as early as the beginning of next month. He went out there with explicit authority to make his own judgments about how right the situation was and how prepared conditions were.

And I think his overall judgment, partly based on the need to focus on this restoration of security and services, but I believe also his sense that we still didn't have a good enough feel for who were the appropriate people who could be brought into a group that would adequately represent the Iraqi people, I think is his reason for taking a little more time.

That's not a lot of time.

And you asked about the process. The process has in fact in some considerable measure focused on intensive consultations, which he's been conducting now with the senior leadership council that was formed in northern Iraq just before the war, including the two principal Kurdish leaders, Talabani and Barzani, including Mr. Chalabi and Mr. Allwi and two Sunni leaders who were -- -- I'm sorry: Mr. Allawi is one of the Sunnis.

WOLFOWITZ: Yes, Baqir al-Hakim from SCIRI, who initially opted not to participate and has since decided he will participate, and we are looking closely to make sure that his participation remains within the bounds of legitimate political activity and doesn't include the importation of his Badr Corps armed people from Iran. And finally, Mr. Pachachi.

That was the core six, and Ambassador Bremer is consulting with those people about how to expand their numbers to -- and we don't have a particular figure in mind -- but to a larger council that would be more adequately representative of the larger population. And then the question will be how to get from there to an interim administration.

But let me emphasize that word "interim." It is really important. There's no way in present conditions to have an Iraqi administration that derives its legitimacy from Iraqi political processes. There are none. Its legitimacy really comes from its interim character and the fact that it is a bridge paving the way to something that will provide legitimacy.

So the more challenging tasks will be writing a constitution, which you can take your guess as good as mine, it sounds to me like that's a six- to 12-month process; and getting elections organized, and there's going to be some discussion, I'm sure, about whether you'd start them at a national level or -- I'll give my bias -- start working from local level up.

I mean, if you have a situation like the one I described in Karbala, then that's a wonderful opportunity to experiment with how Iraqis can handle the political process. Obviously, most areas of Baghdad aren't ready for that sort of thing yet.

So I think some local experimentation, I believe, will be a part of getting there.

It'll take some time, but I think the ingredients for success are -- though they've never done it before, so this is a guess -- but I think the ingredients success are very good. An educated population. We can argue about how soon those resources will be available, but one of the richest natural resource producers in the world.

WOLFOWITZ: And finally, I think this important in things that didn't happen. Unlike Bosnia, while there's been horrible killing, it's been the regime killing everybody. It's not one ethnic group killing another ethnic group. A lot people expected Sunni on Shi'a violence, I think they were wrong to expect that. A lot of us were afraid that there would be Kurdish on Turkish on Kurdish on Arab violence in the north. And while there have been isolated and tragic incidents and that sort of thing, it has not happened on a large scale.

So Iraq starts, I believe, with more good will among the elements of population toward one another than we ever had in the Balkans. That's a plus.

HAGEL: I'll follow up on some of those on the second round.

Thank you.

LUGAR: Thank you, Senator Hagel.

Senator Sarbanes?

SARBANES (D-MD): Well, thank you very much, Mr. Chairman.

Well, first, I want to commend Chairman Lugar for scheduling this hearing. In view of the confusions, the ambiguities and contradictions that exist with respect to our policy in Iraq, I think this hearing was certainly needed. I hope it'll be the first in a series of hearings. I think that may be the intention. When it comes to this nation's foreign policy, the executive and legislative branches play complementary roles and neither can properly fulfill its responsibilities when acting entirely on its own.

Mr. Chairman, I commend you for your tenacity in insisting on the importance of what you have called interbranch partnership on the question of Iraq. As you've written in the op-ed piece, which appeared in today's Washington Post, I quote, "Transforming Iraq will not be easy, quick or cheap. Clearly, the administration's planning for the post-conflict phase in Iraq was inadequate. I am concerned that the Bush administration and Congress had not yet faced up to the true size of the task that lies ahead or prepared the American people for it."

Which was, of course, also a point that Senator Biden made just earlier in this hearing.

And you went on to say, "The public and Congress need to know what we're getting into." And I fully agree with that.

Now, Secretary Wolfowitz, before I turn to Iraq, I want to divert for just a moment.

SARBANES: The Economist, on May 10th -- and the Economist has by and large been very supportive of the administration's foreign policy -- has an article on Guantanamo, in the course of which they say, "America's handling of the prisoners at Guantanamo is wrong in principle, and a tactical error in its broader fight against terrorism."

And they go on to question the continued holding of these troops: "After 16 months, none of those detained at the camp has been charged. The claim that America's free to do whatever it wishes with the Guantanamo prisoners is unworthy of a nation which has cherished the rule of law from its very birth, and represents a more extreme approach than the U.S. has taken even during periods of all-out war. It has alienated many other governments at a time when the efforts to defeat terrorism require more international cooperation in law enforcement than ever before."

What are the -- I gather Guantanamo is under the supervision and jurisdiction of the Defense Department.

WOLFOWITZ: That's right.

SARBANES: What are your plans with respect to that situation?

WOLFOWITZ: Well, we continue, we pay a lot of attention to it, we are looking at that, frankly, we would like to reduce the population there as much as possible. And we made some releases.

It's not an easy process. I recall a few weeks ago when we were on the verge of sending some detainees back to their home country, and the FBI came up with some information that suggested these people would be dangerous to release, and we had to hold it up.

We are working with a number of countries to get agreements so that if t