The president's bill
Interview: Prudential Securites---Gabriel, Chuck---Senior Political Analyst (slow)
>> president bush is urging congress to quickly approve his $87 billion spending plan for iraq and afghanistan. his remarks come as u.s. legislators meet this week to crank out a final version of the proposal.
>> good morning. these funding requests are just as critical to the overall success in iraq. i commend the house and the senate for approving the supplemental requests. i urge both houses of congress to reach agreement soon a final bill so these vital funds can go quickly to where they are needed.
>> joining us now in the studio here in washington to give us his insights into whether the president will get what he wants, and when, is charles gabriel, a senior political analyst at prudential financial. gabriel is the first in a series of guests we will have this week to discuss reconstruction in iraq. welcome, mr. gabriel.
>> thank you.
>> what is the prognosis for the president’s bill?it seems to be hung up over not how much we give them but how we give it to them.
>> how we classify them. i think he will get all but $1.7 billion of that one component they’re fighting about, the $23 billion he requested for iraqi reconstruction and it seems as though both chambers have decided they are hellbent to classify at least $ $10 billion of that $18.4 billion as loans, and it is - interesting, i think the president’s o.m.b. director went down today and threatened a veto if they followed through on that. it seems as though the republican response from senator sam brownback of kansas is to give the president the ability to waive repayment in the name of national security -- therefore, the idea is to arm him to go to russia, and france, and to try to leverage this capability that congress has given them to get them to also waive debt repayment.
>> it sounds like the congressman want to be able to go home and say “we’re not giving away the taxpayers’ money.
>> many americans are not into giving iraq the money.
>> not giving iraq the money?
>> the one thing they clearly weren’t sold on was the idea that after we were through with this iraq wasn’t going to be an oil rich and wealthy nation and be able to pay for its own reconstruction―they haven’t been sold on the idea yet and the white house hasn’t articulated that really well.
>> iraq doesn’t have a very good track record in paying back debts―of course, that was under saddam hussein. how does it play into market sensibilities about whether or not to lend money in the future? if this is a loan or a grant.
>> i don’t think it actually would be helpful to classify it as a grant, and that’s not a partisan comment. i think joe biden also agrees with that, the ranking democrat on the foreign relations committee, because if they really aren’t in a position yet to repay loans, why start them off on a path in which they’re probably likely to perform in a poor way and develop a poor credit history? why not give them something of a clean slate and allow them to get back up to speed, become credit-worthy and the whole world would benefit from that.
>> why not, once the oil revenues are coming in, why not get some of what we lend them back?
>> well, i think―i think that makes sense. clearly, this is $20 billion the president has requested. the ultimate costs are expected to be two or three times that high. i think the white house case is that there is a dividend coming back not only in the form of peace, and that’s very important, and security for americans if, in fact, you could take this as a phase two on the war on terrorism, start a democratization wave in the middle east that had been the great hope but also in the form of a sort of flex-man within the opec production lines and perhaps by really getting iraqi oil production back up to 2.5-2.8 million barrels a day it could bring oil prices down in a way that could really stimulate the economy so we would have a dividend down the road. the white house did say they got $13 billion in pledges from other countries last week when they passed the hat in forms of loans and credits from others and they anticipate that iraqis could produce as much as $5 billion for their own reconstruction through oil revenues in the future, so they’re kind of casting this as a one-time event, and again, they haven’t made their case quite effectively enough, it is true.
>> but is he going to get it or is this going to turn out to be a political embarrassment for the president?
>> i think it’s very likely he will get it, and it’s interesting that you have to remember that four members of the u.s. senate are running for president in the democratic ranks and two of them actually, in spite of the fact that they voted to turn this portion of this money into grants voted against the final package initially as well, so there is some politics going on on both sides but i think the president will get his money.
>> and u.s. companies will benefit?
>> clearly, halliburton has up to $3.5 billion in contracts there, somewhat controversial because it’s vice president cheney’s former country, bechtel has as well and that’s not even a publicly traded company. recycles fairly nicely.
>> thanks to chuck gabriel of prudential financial securities. tomorrow, senator susan collins of maine will join us for our series on iraq reconstruction.
