Bonn to Pay--but White House Denies Gulf War Profits : Costs: Congressional experts say that the U.S. could at least break even as allied funds roll in.

The German government announced Tuesday that it will pay the full amount of its pledged assistance for the Persian Gulf crisis, increasing the chances that the United States will either break even or make a small profit on the war.

With overdue allied pledges finally rolling into the Pentagon’s coffers, congressional budget experts said they believe that the government may not need to spend the $15 billion authorized by Congress to help pay for the war.

The $53.5 billion in promised allied contributions should be more than enough to cover the costs of what turned out to be a brief, highly successful military campaign, they said. So far, the Pentagon has received more than $22 billion in allied contributions.

The Congressional Budget Office and the General Accounting Office now estimate the total cost of Operation Desert Shield and Operation Desert Storm at somewhere between $40 billion and $50 billion.

“The allied contributions should cover the costs without dipping into the $15 billion,” said Jim Wiggins, assistant director for national security and international affairs at the GAO.

“The bottom line is that they (Pentagon officials) shouldn’t need the $15 billion,” said a senior official at the CBO.

But President Bush, seeking to avoid any appearance that the United States is a war profiteer, cautioned that the Administration is sticking to its higher cost projections of more than $60 billion.

“I’m afraid it is not going to be any cheaper . . . than original estimates,” Bush told reporters at the White House.

In fact, Administration officials insisted that the Pentagon will need the entire $15 billion even though allied contributions have increased by at least $4 billion since the White House first said it needed the money from Congress.

The Administration also has backed away from earlier suggestions that it might refund any excess contributions from allies.

White House spokesman Marlin Fitzwater said the United States will need all of the money pledged. “The costs will be greater than these contributions,” he said. “There is no question about that.”

However, congressional budget experts said that the White House and the Pentagon had included other defense expenses to justify spending all of the money initially earmarked for the war effort.

For instance, the Pentagon included in its supplemental war budget about $2.8 billion in fuel costs for the military worldwide--on top of the cost of fuel used in the combat zone, the congressional officials said.

The Pentagon argued that fuel prices went up because of the Persian Gulf crisis, so the extra fuel expenses incurred in other parts of the world are war-related. Congress disallowed the extra expenses as war costs when it passed the Pentagon’s supplemental war budget last week.

In some instances, the Pentagon also pushed for more weapons than were planned for production before the war began, according to the congressional experts.

For example, the Pentagon wanted to use the war bill to pay for the production of hundreds of extra Patriot anti-missile missiles, the congressional officials said. Instead of simply replacing Patriots used during the war, the Pentagon plan would have sharply increased the U.S. stockpile of the weapons.

Congress insisted last week that the supplemental war budget should only pay to replace Patriots used in battle. Congress approved production of an additional 300 Patriots, but shifted the cost to the regular defense budget.

German Finance Minister Theodor Waigel, who met Tuesday with Bush, told reporters he has been assured that the United States will not make a profit on the war.

Germany has pledged $5.5 billion for Operation Desert Storm, in addition to more than $1 billion provided in 1990 for Operation Desert Shield. Including contributions to other nations and organizations, Germany’s total Gulf assistance will come to $11.5 billion, Waigel said.

Bonn’s decision to meet its obligation was crucial, because Germany had been the most vocal of the allies in questioning American war cost estimates. Germany’s brief reluctance to come through with its pledge created a furor in Congress, where lawmakers threatened to withhold arms sales to nations that did not meet their Gulf obligations.

Now, Waigel said, Germany will accept U.S. cost estimates without question. The final installment of Germany’s cash payments will be sent by the end of this week, he said.

“It was important for me to come here to make clear that we would meet our pledged contributions,” Waigel said.

Tensions remain between the United States and other allies who have not yet met their full pledges. Notably, Saudi Arabia and Kuwait, which have pledged roughly $16 billion each, are still far short of paying their full obligations.

California Rep. Leon E. Panetta (D-Monterey), chairman of the House Budget Committee, said that the Saudis are arguing with the Administration over whether to count as part of their $16 billion pledge the cost of fuel and other in-kind assistance they provided to the U.S. military during the war.