Bill Coming Up for First War Payment

Times Staff Writers

The Bush administration is expected next week to submit the first installment of the bill for war with Iraq -- a tab of between $70 billion and $75 billion that would cover one month of fighting and several months of occupation, sources said Thursday.

Administration and congressional sources both warned that the request is unlikely to cover the full cost of the war and its aftermath and that the White House will have to return to Congress for more money.

That suggests that the final cost of the conflict could easily top the $100-billion mark that senior administration officials have repeatedly dismissed as outsized.

Separately, the White House and Treasury said the administration is seeking to seize $2.3 billion in Iraqi government funds in U.S. and overseas bank accounts, and is searching for what officials suggest may be an additional $12 billion from the illicit sale of Iraqi oil. Officials said the money would be used to help rebuild Iraq after the war.

A spokesman with the White House Office of Management and Budget declined to comment on the administration's war budget request, saying that officials still have not settled on some elements of the proposal and that President Bush has yet to sign off on the measure.

News of the impending request came as leaders of the Republican-controlled Congress sought to fend off efforts to trim Bush's latest tax-cut package and the Treasury Department announced that in February, Washington ran the largest monthly deficit on record.

Sources cautioned that the final size of the war budget request could change as the battle unfolds and administration officials adjust what is included and what to leave out.

As of Thursday, the sources said, the package would include about $63 billion for the Defense Department, $5 billion or more for the State Department to provide aid to regional allies such as Israel, and between $2 billion and $4 billion for the new Department of Homeland Security.

Sources said the Defense Department figure presumed one month of fighting followed by up to five months of occupation.

Because administration officials have already said that a postwar occupation of Iraq will almost certainly last longer than five months, the White House presumably would come back to Congress for more money.

Independent analysts said the defense portion of the budget request sounded high to them. They said that most estimates put the monetary cost of a swift U.S. victory at about $30 billion and an occupation through the Sept. 30 end of the current fiscal year at an additional $15 billion.

They speculated that the defense figure might include up to $20 billion for military operations in Afghanistan.

Congressional budget staffers said that the administration wants Congress to take up and approve its war-cost request before lawmakers begin their spring recess April 11.

Congressional Republican leaders will have to tackle the request while pushing for passage of a budget blueprint for the next fiscal year that would accommodate the $725 billion in new tax cuts that the president is seeking to rekindle economic growth.

Bush's fiscal 2004 budget proposal has already sparked controversy because of the size of the proposed tax cuts and the fact that it assumes a $300-billion-plus deficit.

The Treasury Department said Thursday that the government is well on its way to running a similar-sized deficit this fiscal year, with a $96.3-billion deficit in February, the largest on record, and a cumulative $193.9 billion in red ink in the first five months of the fiscal year. These figures do not include any of the costs of the war with Iraq.

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