Democrats Want Iraqis to Use Oil Surplus

The legislation follows a recommendation by Gen. David Petraeus, the top U.S. commander in Iraq, that the Bush administration halt troop withdrawals in July. Petraeus on Wednesday was wrapping up two days of congressional testimony in which he has said security gains in the war zone are too fragile to promise further drawdowns.

Sen. Carl Levin, chairman of the Senate Armed Services Committee, said pausing troop reductions would signal to the Iraqis that the United States was committed to the war indefinitely.

"Rather, we need to put continuous and increasing pressure on the Iraqis to settle their political differences, to pay for their own reconstruction with their oil windfalls, and to take the lead in conducting military operations," said Levin, D-Mich.

Iraq has about $30 billion in surplus funds stored in U.S. banks, according to Levin.

Iraq is looking at a potential boon in oil revenue this year, possibly as much as $100 billion in 2007 and 2008. Meanwhile, the U.S. military is having to buy its fuel on the open market, paying on average $3.23 a gallon and spending some $153 million a month in Iraq on fuel alone.

While Iraq pays for fuel for its own troops, it has relied heavily on U.S. dollars to provide people with basic services, including more than $45 billion for reconstruction.

Lacking the votes to order troops home by a certain date, Democrats see fencing off reconstruction money as an alternative to challenging the Bush administration's Iraq policies. And several Republicans have signaled their concerns about burgeoning Iraqi oil revenues at a time when the war is growing increasingly costly.

"Isn't it time for the Iraqis to start bearing more of those expenses, particularly in light of the windfall in revenues due to the high price of oil?" said Sen. Susan Collins, R-Maine.

Ryan Crocker, the U.S. ambassador to Iraq, agreed but said it would take time.