U.S. Senate Appropriations Committee Hearing on the Supplemental Budget Request for Operations in Iraq and Afghanistan

MARCH 9, 2006

SPEAKERS:

U.S. SENATOR THAD COCHRAN (R-MS) CHAIRMAN

U.S. SENATOR TED STEVENS (R-AK)

U.S. SENATOR ARLEN SPECTER (R-PA)

U.S. SENATOR PETE V. DOMENICI (R-NM)

U.S. SENATOR CHRISTOPHER (KIT) BOND (R-MO)

U.S. SENATOR MITCH MCCONNELL (R-KY)

U.S. SENATOR CONRAD BURNS (R-MT)

U.S. SENATOR RICHARD C. SHELBY (R-AL)

U.S. SENATOR JUDD GREGG (R-NH)

U.S. SENATOR ROBERT F. BENNETT (R-UT)

U.S. SENATOR LARRY CRAIG (R-ID)

U.S. SENATOR KAY BAILEY HUTCHISON (R-TX)

U.S. SENATOR MIKE DEWINE (R-OH)

U.S. SENATOR SAM BROWNBACK (R-KS)

U.S. SENATOR WAYNE ALLARD (R-CO)

U.S. SENATOR ROBERT C. BYRD (D-WV) RANKING MEMBER

U.S. SENATOR DANIEL K. INOUYE (D-HI)

U.S. SENATOR PATRICK J. LEAHY (D-VT)

U.S. SENATOR TOM HARKIN (D-IA)

U.S. SENATOR BARBARA A. MIKULSKI (D-MD)

U.S. SENATOR HARRY REID (D-NV)

U.S. SENATOR HERB KOHL (D-WI)

U.S. SENATOR PATTY MURRAY (D-WA)

U.S. SENATOR BYRON L. DORGAN (D-ND)

U.S. SENATOR DIANNE FEINSTEIN (D-CA

U.S. SENATOR RICHARD J. DURBIN (D-IL)

U.S. SENATOR TIM JOHNSON (D-SD)

U.S. SENATOR MARY L. LANDRIEU (D-LA)

WITNESSES:

DONALD H. RUMSFELD,

U.S. SECRETARY OF DEFENSE

CONDOLEEZZA RICE,

U.S. SECRETARY OF STATE

GENERAL PETER PACE (USMC),

CHAIRMAN,

JOINT CHIEFS OF STAFF

GENERAL JOHN ABIZAID (USA)

COMMANDER,

U.S. CENTRAL COMMAND

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COCHRAN: The committee will please come to order.

We appreciate very much the attendance at this hearing of Secretary Rumsfeld, Secretary Rice, General Peter Pace, General Abizaid, to discuss the president's budget request for supplemental appropriations to fund diplomatic and military operations.

We appreciate having the benefit of statements that you have submitted.

And rather than began our committee with statements from senators, we will have an opportunity to ask questions of each of you. And so I suggest that we proceed directly with your statements, and then we'll have an opportunity to discuss the request.

I would ask Secretary Rumsfeld to begin. Or you would defer to Secretary Rice? I'm happy to do that.

Secretary Rice, you may begin.

RICE: I would have been happy to have Secretary Rumsfeld begin, but I'm happy to start.

Thank you very much, Mr. Chairman. And thank you to the members of the committee for receiving us in this format.

I think that it demonstrates the importance that we attach to the deepest cooperation between the Department of State and our political and diplomatic activities, and the Department of Defense and our military activities. We believe that both are necessary to win the war on terrorism and to develop stable democracies that can give people hope, that can supplant the ideologies of hatred that led people to fly airplanes into our buildings on September 11th.

This is a hearing on the supplemental. And I wanted to just begin with one word about why the requests are here in a supplemental, and then to just briefly talk about a few of the areas for which we're requesting funding.

I have a complete statement, but I will not read that statement, Mr. Chairman. But I would like to ask that it be entered into the record in its entirety.

COCHRAN: Without objection, it's so ordered.

RICE: Mr. Chairman and members of the committee, natural disasters and the course of war do not take into account our budget timelines and practices. And it's therefore necessary...

PROTESTER: How many of you have children in this illegal and immoral war? How many of you have children in this illegal and...

COCHRAN: Sergeant at Arms, please restore order.

PROTESTER: ... immoral war?

COCHRAN: The committee will come to order.

PROTESTER: The blood is on your hands and you cannot wash it away. The blood is on your hands and you cannot wash it away.

COCHRAN: Madam Secretary?

PROTESTER: Fire Rumsfeld. Fire Rumsfeld. This is an illegal and immoral war.

COCHRAN: Madam Secretary, you may proceed.

RICE: Thank you.

Natural disasters and the course of war don't take into account our budget timelines and practices. And it is necessary, therefore, in the course of what is a very dynamic process in places like Iraq and Afghanistan and the regions in which we're dealing, to sometimes make requests that are out of the normal budget cycle.

RICE: As Secretary Rumsfeld has said in his testimony, the enemy is changing and adapting, and we must do that too.

Sometimes, we are adapting to changes that the enemy has made. Sometimes we are responding to humanitarian crises that come along unplanned for. And sometimes we are responding to new opportunities that emerge in what is a very dynamic world.

The supplemental request before the Congress has requests for funding that will advance our security and economic and political goals in Iraq and Afghanistan, target urgent humanitarian relief and peacekeeping efforts for Darfur and southern Sudan, provide emergency food aid for Africa and earthquake relief and reconstruction for Pakistan, and launch democracy promotion activities for Iran.

I would like briefly to just speak to each of these, Mr. Chairman.

In Iraq, we are seeing side-by-side contradictory processes in the continuation of violence which we acknowledge; but, at the same time, a political process that is well under way in which most Iraqis believe their future interests can be accommodated.

The Iraqis have had three elections in one year, and they are now in the process of the formation of a permanent government. But they still face a very determined enemy, an enemy that would like to see that political process halted so that Iraq might devolve into chaos and conflict.

Our military is doing a very fine job of both training Iraqis to take on this fight themselves, and continuing operations against the enemy.

The contribution that we believe that we can make in the State Department to this counterinsurgency effort is to recognize that any insurgency must be defeated not just militarily, but also politically.

And so the funding that is requested on Iraq is for the effort to support counterinsurgency operations and stabilization operations in the following ways.

First of all, to build central government capacity for the Iraqi's national capacity in their ministries. They must be able to administer services themselves. They must be able to have a reasonable ability to deliver services for their people.

It is no surprise that these are bureaucracies and ministries that have needed to be completely reformed as Iraq moves from a dictatorial society, one in which ministers were political choices of the dictator, one in which capacity was not the issue and efficiency and effectiveness were not the issue, but political loyalty, and in which we found ministries that, indeed, have very little modern capacity to govern.

And so the embassy, working with the Iraqi government, has been developing a plan for ministry assistance teams. And that is represented here in the supplemental request.

RICE: Secondly, Iraq is finally moving from a more centralized state where everything happens in Baghdad to one in which the constitution grants considerable authority to the provinces.

We think that this is, in fact, a very good thing. And we have put together a set of provincial reconstruction teams that will support the development of provincial leadership, government and capacity, and also that can contribute to the counterinsurgency effort by establishing provincial governance, provincial infrastructure programs once an area has been cleared of the insurgency.

We have already funded from our own resources some of these teams. But we will need follow-on funding to continue to roll out a provincial reconstruction team structure that will allow us to be close to the action in defeating the insurgents as the terrorists are defeated to build provincial capacity and infrastructure capacity at the local and provincial levels.

There's also a relatively small infrastructure sustainment element here. This is not -- and I'd like it not to be misunderstood as such -- another effort to bring more infrastructure money of the kind that we had in the almost $20 billion that was requested and approved by Congress some years ago. But, rather, we believe that the investments that we have made need to be sustained with maintenance and operations. We are encouraging the Iraqis to build that into their budgets over time.

This supplemental would also support Afghanistan. The issues there are debt forgiveness, refugee assistance and some reconstruction efforts in terms of power.

It would support the Pakistan reconstruction efforts where, because of the issue of timeliness, we in some cases actually had to move funds around in order to be timely in support of those efforts after the Pakistan earthquake, but also to fulfill the pledges that the United States has made to Pakistani reconstruction.

RICE: We're also requesting here humanitarian relief and peacekeeping for the dire situation in Darfur and in southern Sudan.

Finally, Mr. Chairman, I'd like to say just a word about the request here for democracy promotion money for Iran.

We may face no greater challenge from a single county than from Iran, whose policies are directed at developing a Middle East that would be 180 degrees different than the Middle East we would like to see developed.

This is a country that is determined, it seems, to develop a nuclear weapon, in defiance of the international community that is determined that they should not get one.

It is a country that is the central banker for terrorism, whether that terrorism is in southern Iraq or in the Palestinian territories or in Lebanon. And in all of those cases, Iranian support for terrorism is retarding, and in some cases helping to arrest, the growth of democratic and stable governments.

And Iran, of course, has a terrible human rights effort, and a country in which an unelected few are frustrating the desires and wishes of the Iranian people for democracy.

We have proposed a $75 million package that would allow us to broadcast more effectively in Iran, better messaging for Iran. We have proposed money that would be used for innovation in our efforts to reach the Iranian people through Web sites and modern technology. We have also proposed that we would be able to support nongovernmental organizations that can function in Iran. And in many ways, most importantly, to improve and increase our educational and cultural outreach to the people of Iran.

I want to say, Mr. Chairman, that there is nothing more important, as we try and make certain that the Iranian government recognizes that it will be isolated if it continues down this path, that we not isolate the Iranian people. And these programs are, in many ways, critical to not isolating the Iranian people.

We do not have a problem with the Iranian people.

RICE: We want the Iranian people to be free.

Our problem is with the Iranian regime. And these programs are intended to help us reach out to them.

Thank you very much, Mr. Chairman. And I will be glad to take questions after the other statements.

COCHRAN: Thank you very much, Madam Secretary, for your statement and your cooperation with our committee.

Secretary Rumsfeld, you may proceed.

RUMSFELD: Thank you, Mr. Chairman, members of the committee. I appreciate this opportunity to join Secretary Rice in discussing the president's supplemental budget request for Iraq, Afghanistan and the war on terror.

A joint appearance by the secretary of state and secretary of defense is unusual. That we're doing so I think does indicate how much the success depends on our departments being linked together in addressing the challenges that face our nation.

Let me first outline a few of the details of the department's portion of the supplemental request.

The president has requested $65.3 billion to fight and win the war on terror in Afghanistan and Iraq. This supplemental includes priorities such as paying for ongoing deployments and operations by U.S. forces in Afghanistan and Iraq, some $34.7 billion; continuing to develop Afghan and Iraqi security forces, $5.9 billion; countering the threats posed to our troops by improvised explosive devices, $1.9 billion; continuing the important transformation of the U.S. Army into modular brigade combat teams, $3.4 billion; repairing and replacing damaged or destroyed equipment, $10.4 billion; and reimbursement for the cost of the military response to the earthquake in Pakistan, some $60 million.

RUMSFELD: To underscore the importance of this request and discuss some of the particulars, I'm joined by General Pete Pace, the chairman of the Joint Chiefs of Staff, and General John Abizaid, the commander of the U.S. Central Command.

We've been asked on occasion why the war costs are included in supplemental requests rather than in the defense department's annual budget, and it's a fair question.

As Secretary Rice suggested, the traditional annual federal budget takes up to 12 months to formulate, it takes another eight or 12 months to pass Congress and then it takes another 12 months to execute: a total of something like two and a half to three years.

Needless to say, in war, circumstances on the ground change quickly. The enemy has a brain; is continuously changing and adapting their tactics.

Bridge and supplemental appropriations are, of course, put together much closer to the time the funds will actually be used. This allows considerably more accurate estimates of costs and, importantly, much quicker access to funds when they're needed, without having to go through reprogramming contortions where we're forced to rob other accounts and distort good business practices.

The task is this. We're engaged in what promises to be a long struggle, a conflict which requires that we transform the way the military and, indeed, our government operates.

The extremists, though under constant pressure and on the defensive, still seek to bring their terror to our shores and to our cities and to all who oppose their views.

These enemies cannot win a single conventional battle, so they challenge us through nontraditional, asymmetric means using terror as their weapon of choice.

Their current priority is to prevent the successful emergence of a democratic government in Iraq -- and, indeed, in Afghanistan as well -- and to try to force the United States and our coalition partners to abandon those nations before they're fully able to defend themselves.

They're skillful at manipulating the media. Of course, one of the principal goals of their attacks is to make our cause look hopeless.

But consider the larger picture from the enemy's standpoint.

They tried to stop the Iraqi national elections in January a year ago and they failed. They tried to stop the drafting of a constitution and then the referendum on the constitution October 15th and they failed. They tried to stop the Iraqi national elections last December 15th and they failed.

And now, obviously, they attacked the Golden Dome Shrine in Samarra in their latest attempt to incite a civil war and to try to stop the formation of the new Iraqi government. And thus far they are failing at that as well.

The Defense Department has drawn lessons that have helped guide us in making adjustments in the period ahead. These lessons and principles have been incorporated into the Quadrennial Defense Review, which was recently submitted to Congress.

Those lessons and the decisions from the Quadrennial Defense Review will be incorporated more fully in the president's budget to be presented next year in fiscal 2008.

The QDR recognized that in this struggle many of our enemies operate within borders of countries with whom we're not at war. It's clear that the challenge posed by these violent extremists will not be overcome by any one department or by any one country. To succeed, it'll be essential to help partner nations and allies develop their capabilities to better govern and defend themselves.

This emphasis on partner-building capability is at the heart of the efforts in Iraq and Afghanistan, as well as in several smaller- scale training and equipping operations in places like the Republic of Philippines and Georgia.

Our investments and policies should reflect these new requirements. Last year, Congress helpfully provided some authority to provide money to train and equip security forces of partner nations, but we will be requesting, in our new budget, that authorities be strengthened and expanded.

RUMSFELD: When other nations and partners can shoulder greater security burdens within their borders and around the globe, it's far less likely that U.S. troops will be called on at what is always considerably greater cost in both blood and treasure to our nation.

For example, it costs about $90,000 per year just to sustain a U.S. servicemember in a theater. That's opposed to about $11,000 to sustain an Afghan soldier or $40,000 to sustain an Iraqi soldier.

I was concerned yesterday to learn that the House Appropriations Committee has cut $1 billion out of the $5.9 billion request for sustaining and supporting Iraqi and Afghan security forces. In my view, that is clearly an enormously important thing for our country to be doing, and it unquestionably is cost-effective.

The United Nations peacekeeping operation in Haiti is one example of the benefit of empowering partner nations. A recent Government Accounting Office study found that if the United States had had to conduct the Haiti mission on our own without the major help of other nations, it would have cost the U.S. taxpayers almost eight times as much in dollars, to say nothing of the added stress on our forces.

I think it's also important that we not complicate efforts to build useful relationships with nations that can aid in our defense. In the past, there's been a tendency for, occasionally for good reason and sometimes, in my view, for not good reason, to cut off military- to-military relationships when a particular government did something that we, understandably, did not approve of.

RUMSFELD: This happened some years ago with respect to our relations with both Indonesia and Pakistan, two of the largest and most important Muslim countries in the world. And today they are valuable allies in the war on terror.

The result has been the equivalent of a lost generation in relationships between U.S. military and the militaries of their countries, in terms of friendships, contacts, relationships and understanding between the U.S. military and their militaries, relationships that we've had to start up again and try to start up again, almost from scratch in the wake of September 11.

It's a complicated issue. I understand that there's arguments that are appropriate to be made on both sides of it. But I mention it because I think it's something that we need to think very carefully because as a result of some of those actions the United States is looked at as a less than perfectly reliable friend and ally.

Since then, we've made progress in forging stronger ties with those two countries and also with India, in particular, to confront the threat posed by violent extremism.

I've mentioned the importance of closer cooperation between Cabinet departments and agencies. And Secretary Rice has discussed some specific provisions for the Department of State that are in the supplemental request and which will clearly enhance our partnerships in Iraq and Afghanistan.

The State Department requests are intended to help Iraq and Afghanistan transition to self-reliance by increasing the capacity of these still-fragile democracies to govern their people and to provide the needed services for them, services that, let there be no doubt, undermine support for terrorists and that reduce stress and danger to our men and women in uniform.

Mr. Chairman, the tasks ahead are not easy. They are never easy in a time of war. There's always differences and debate and proper discussion.

It's interesting. I recently visited the Truman Library in Independence, Missouri. And, of course, he was the commander in chief at the dawn of the Cold War. The institutions and policies and programs that came into being under his watch included the Marshall Plan, the Truman Doctrine, NATO, the Department of Defense, the Central Intelligence Agency, the World Bank and so many others.

Through the perspective of history, the many new institutions and programs created during the Truman years may seem to people not rooted in history as part of a carefully crafted, broadly supported strategy leading inevitably to victory in the Cold War.

But, of course, things were not like that at all. In fact, in those days, there were heated disagreements. Yet together our national leaders, both political parties, got the big things right.

They understood that a cold war had been declared on our country, on the free world, whether we liked it or not; that we had to steel ourselves against an expansionist enemy, the Soviet Union, that was determined to destroy our way of life.

Though this era is different -- and it is different, to be sure -- and though the enemy today is different -- as we understand fully it is -- nonetheless, that is our task today.

We have to fashion some new approaches that will enable us to partner with other countries if we're to defeat this peril that faces us.

RUMSFELD: Mr. Chairman, with the help of Congress, we will provide the American people with the needed security in this dangerous and still uncertain new century.

Thank you, sir.

COCHRAN: Thank you, Secretary Rumsfeld.

We'll now turn to General Pace for any opening comments you would like to make.

PACE: Mr. Chairman, Senator Byrd, members of the committee, it's my great privilege to sit before you as a representative of your armed forces, and, on behalf of all the women and men in uniform, to say thank you for your strong bipartisan support, not only in the allocation of resources to your armed forces, but in your visits to the troops in the field and in your visits to the hospitals. It makes a difference, and we thank you for that.

I'd also like to take an opportunity to say thank you to the men and women who are protecting us as we sit here today -- they are doing a fabulous job -- and to their families who stand silent watch at home. The families serve this country as well as anyone who's ever wore the uniform. We owe them a great debt of gratitude.

Today, I'd like to just touch on four specific topics, and then go to your questions.

First, with regard to reconstituting equipment, a total 2006 funding for reconstituting equipment is $18.2 billion. That includes $7.8 billion in the bridge fund and $10.4 billion in this supplemental request.

It goes to replenish Humvees and trucks and helicopters and Bradley Fighting Vehicles and all the things that we have been using -- getting damaged, wearing out -- in the prosecution of this war.

But the money is not being used to reset the old force. With the benefit of the recently conducted Quadrennial Defense Review, we're buying and resetting the force that we need for the future.

For those things that are in the inventory that we will need for the next 10, 15 years, we are refurbishing those. But in other cases, where there is a better item for the armed forces to be able to use in the future, that's what we will do.

PACE: Ospreys, for example, instead of helicopters; seven-ton trucks for the future instead of the older version we've had for 20 years.

Those kinds of decisions are being made based on solid analysis.

Second, with regard to force protection equipment, the total 2002 funding for force protection equipment is $5.1 billion. That includes $2.5 billion in the bridge fund, plus $2.6 billion in this request.

When you add that to the $3.8 billion that you have already allocated and we have spent through FY 2005, you can see that the amount of energy and resources applied to force protection for our troops has been enormous.

Examples: 988,000 sets of individual body armor have been purchased, 13,000 up-armored Humvees have been purchased, over 40,000 other wheeled vehicles have had armor added to them.

And as new items come along that are better than what we have, you have resourced us and we have been able to get it. So for example, we started the war with only about 2,000 sets of the small arms protective inserts for body armor because it was an experimental piece of gear at the time.

It proved its worth, and you quickly funded and we were able to quickly get to the field that item for each and every soldier, sailor, airmen, Marine and civilian in-theater.

While that was being done, our industry came up with the enhanced version, which is even more protective. And that has been fielded.

Side armor that has been developed will now be fielded -- it has been fielded as of this month.

So as industry is able to produce better equipment and armor, you have given us the resources and we have gotten to the field, as quickly as we can, those resources.

Clearly, the best force protection is to have fewer troops in the field in combat.

PACE: And the enormous progress made this year by the Iraqi armed forces in their capacity to control their own territory has made it possible for us to go from 17 brigades recently down to 15 in Iraq.

Third, defeating the improvised explosive devices. Total funding in 2006 for that amounts to $3.3 billion: $1.4 billion in the bridge fund, $1.9 billion in this supplemental.

It buys things like jammers and detection devices. It helps us test those. It helps us train with those in the deserts here before we send our troops overseas.

There is no silver bullet in this regard. But the combination of tactics, techniques and procedures that are taught to our soldiers and Marines based on lessons learned in the field, the technology that is being funded, has been funded and is requested to be funded through this supplemental, combined will give us the best opportunity for our forces to succeed against IEDs in the field.

Back in 2004, the United States Army stood up a task force specifically focused on IED defeat. That quickly grew to a joint task force, which then came under the Department of Defense.

And within the last couple of months, U.S. Army retired General Monty Meigs has come on to take the lead of that task force, reporting directly to the secretary of defense, so that we can get the value and the benefit of the entire joint force kludged together as quickly as possible and brought to the field to help reduce causalities.

There has been an increase in the number of IEDs that we have found before they have exploded, and a decrease in the number of casualties per explosion.

That means that a lot of the work that's being done and a lot of the resources that you have allocated are having positive effects. But we have a lot of work to do in this regard and we appreciate your support.

Lastly, with regard to Army modularity, total 2006 funding for Army modularity is $5 billion: $1.6 billion in the bridge fund and $3.4 billion in the supplemental.

This is allowing the United States Army to transform at the same time that it is fighting in combat. It is taking 33 brigades that were embedded in divisions and were not independently deployable and transforming those and building those up to 42 brigades that are deployable independent of each other.

It's taking the National Guard, that had 15 enhanced brigades, and building those to 28 fully modularized brigades, manned and equipped to be able to enter the battlefield independently as well.

When you take a look, then, at rotations, this will not only increase our Army's combat capability, but will also decrease the stress on the force.

With the 42 active brigades and a rotation base of one year out and two years back, we can have 14 active brigades in the field indefinitely.

On the reserve side, with one year out and five years back, of the 28 reserve brigades, we can have four to five in the field all the time if the nation were to need it.

This gives us 18 to 19 brigades that are sustainable for as long into the future as we need to, and the rest of the force available to surge if needed.

To put that 18 to 19 in perspective, you currently have 15 brigades in Iraq and three brigades going to two brigades in Afghanistan. So we have 18 going to 17 right now. So if we had to into the future sustain the force that is currently deployed, we could do so based on the Army's modularity plan.

Significantly, beginning in FY '07, modularity funding for the United States Army moves into their baseline budget. And in the FY '07 budget, it's $6.6 billion for Army modularity in the baseline budget.

Mr. Chairman, thank you, sir.

COCHRAN: Thank you, General Pace.

General Abizaid, we appreciate hearing from you.

ABIZAID: Well, thank you, Chairman Cochran, Senator Byrd, members of the committee.

Thanks for the opportunity to be here. Most importantly, thanks for your steadfast support of the young men and women in the field whose sacrifice, courage and professionalism are unequalled.

ABIZAID: We've come a long way in both Afghanistan and Iraq. However, the FY '06 supplemental funds will help us to address the many challenges and threats that we'll face in the coming year.

I just came out of the field. I was in Islamabad yesterday, Afghanistan the day before that, and spent a couple days in Iraq as well. So my impressions coming out of the field are fairly fresh.

I do know that the achievement of our national strategic goals in both Iraq and Afghanistan require a balance of security, governance, capacity-building and economic development to create an environment that eliminates the root causes of the insurgency.

The supplemental provides the necessary resources to support our strategy by funding the Commanders' Emergency Response Program, and which includes funds for both the armed forces and police of Iraq and Afghanistan.

In the supplemental, we're requesting $3.7 billion to further develop Iraq's security capacity, to secure their country while carrying out a campaign to defeat the terrorists and neutralize the insurgency.

Previous appropriated funds have enabled the ISF to continue to increase capability and self-reliance with the aim of taking ownership of their country's security.

Initial training and equipping of personnel and combat units in the defense forces is over 80 percent complete, while training and equipping of police forces is over 60 percent complete.

There are over 100 Iraqi army and special operations forces battalions conducting counterinsurgency operations, compared with only five in 2004.

The Iraqis are making good progress with 49 Iraqi defense force battalions now controlling their own battlespace with coalition forces in the supporting role. We didn't have any doing this last year.

Iraqis are in the lead in about half the precincts in Baghdad. And again, we didn't have any doing this last year.

ABIZAID: This was accomplished certainly in part because of the funds that you provided us in last year's supplemental.

We are requesting some funding for Iraqi security infrastructure. And we believe that failure to complete these critical infrastructure projects could seriously delay the ability of the Iraqis to fully engage the counterinsurgency fight, take control of their battlespace and maintain operational readiness.

Some of the infrastructure costs are associated with tactical changes on the ground that our commanders believe will greatly improve Iraqi capability to secure difficult parts of the country.

Iraqis are investing fully 16 percent of their 2006 budget for their security forces. And we are confident that, over time, they will contribute more and more to the cost of full equip and training of their own forces.

In Afghanistan, we are requesting $2.2 billion to continue developing the Afghan national security force capability so that they can secure and stabilize their country while executing a campaign to defeat and prevent a safe haven from being established there by the terrorists.

These funds will provide assistance to organize, train and equip the police and military to assume a greater role in providing their own security. I think it's important for the committee to understand that in both Afghanistan and in Iraq local security forces take on the brunt of the fighting and the brunt of the casualties.

Assistance to the security forces will include the provision of equipment, supplies, services, training and infrastructural repairs and construction.

The Ministry of Interior forces, to include the border, highway and national police, will eventually become the front line of defense in the counterinsurgency fight in Afghanistan. But after 25 years of war, these forces have largely had to make do with temporary stations, some of which are partially destroyed.

The funds requested in the supplemental will allow these security forces to continue to provide increased security to support reconstruction and allow for private sector development and economic, educational and health reform.

We're also requesting an additional $423 million in the supplemental for Commanders' Emergency Resources Program to support the commanders on the ground. CERP is one of the most effective counterinsurgency tools that we have and your continued support is vital to their success.

CERP funds are intended to respond immediately to urgent requirements for humanitarian relief and reconstruction efforts, the provisioning of equipment such as electrical generators to support critical infrastructure and large-scale civic clean-up, and construction activities employs many local nationals.

And as you know, one of the reasons for the insurgency being fueled in Iraq and Afghanistan is the large number of unemployed, angry young men on the streets. Getting the angry young men off the streets is very important to our efforts to fight the counterinsurgency.

CERP enables commanders the ability to make a difference on a daily basis. And it's having an immediate and a positive effect.

The FY '06 supplemental request supports operations and programs that will help facilitate the important transition of more responsibility to security to local forces. Whether through facilities, equipment and training funds for Iraq and Afghanistan's security forces, CERP funding resources for enhanced force protections and counter-IED capabilities or support for our coalition partners, whose efforts in Iraq and Afghanistan remain vital, these funds will assist U.S., coalition and Iraqi and Afghan forces in making continued strategic advances in both places.

Such funds will also help us address the many challenges and threats that we face in those countries in the upcoming year.

Success in Iraq and Afghanistan are key to our success in the broader war against the dark ideology and methods of Al Qaida.

ABIZAID: We must remember the vital roles played by our friends and partners in the region, especially in the Arabian Gulf. Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Oman, Qatar all cooperate with us in this fight against a common enemy. They all share in common with us the need to protect resources flowing through the Arabian Gulf.

I'd like to bring to the committee's attention that the United Arab Emirates in particular has been especially steadfast in their support of our efforts.

Mr. Chairman, thank you again for the opportunity to be here. Thanks for your continuing tremendous support of our troops on a difficult mission.

Our commanders in the field believe in our success and in the success of our Iraqi and Afghan partners.

COCHRAN: Thank you very much, General Abizaid.

Let me begin by asking Secretary Rice about the status of our construction of facilities for the Department of State and those who are working in the mission in Baghdad.

We had an interesting debate about whether those funds were important enough to be included in a previous supplemental. And they were included. I was pleased to see that we were able to fund that activity, which was requested by the administration.

What is the status of that now? And how does this $1 billion in the supplemental for operation, maintenance, security fit in with the previously appropriated funds we have provided?

RICE: Thank you, Senator.

The plan for the Baghdad embassy is on track in terms of time. I meet with General Williams at least once a month to track this, because we were grateful to the Congress for appropriating the funds so that we could accelerate the building of an embassy in Baghdad.

I think we all know that our people in Baghdad are living in conditions that are very difficult -- a lot of temporary housing, trailers and the like -- and areas that we are very concerned about security, although we're doing everything that we can to make them secure.

And we undertook to do this in about 24 months. We are on course to complete the embassy in that period of time.

We've had to employ very aggressive methods to try to get this done in that period of time, including keeping a lot of people on-site in order to not have security issues associated with it. But I can report that it is on schedule.

The money for operations and maintenance that is represented here in the supplemental is because our war costs -- because we operate in a very difficult security environment, our spend rate for the operations and maintenance of our existing embassy and existing operations, we need to be able to fund now the rest of the year in order to be able to continue our operations in Baghdad.

So that's the split.

But the appropriation for the embassy itself, we were very grateful, and I believe we're on schedule.

COCHRAN: Also, included in the request is $1.5 billion for economic support funds to assist Iraqi government ministries. What do you hope to accomplish with the funds if we approve this request?

COCHRAN: What's your assessment of the capabilities of Iraq to carry out government functions and to carry out their governmental responsibilities?

RICE: Thank you, Senator.

There are two -- indeed, three elements to this, but I'll describe the most important two in this request for capability for the Iraqi government.

To pick up on something that General Abizaid mentioned, what we have to do is build the Iraqis' capacity to deal with the many problems that they face. And, obviously, their ministries have to be capable.

We assess that the ministries are highly variable right now in their capability. And I don't think that there are any that are really up to speed in terms of procurement practices, the ability to actually hire effective people.

Sometimes it's a matter that the ministries, where a minister and really very little else, and you're really developing in some of these ministries a civil service corps.

We have as a part of this a substantial training element for Iraqi civil servants, an effort to improve the anti-corruption efforts; that is a major problem in some of these ministries, especially ones that are associated with natural resources.

And so the funding will help us at the central level in Baghdad to make these ministries capable. We believe that's a program over a couple or so years to try and make those ministries capable of delivering the day-to-day governance of the country.

There is a second element which is very important to us, which is at the provincial level. And the Iraqi constitution will finally devolve authority to the provincial level. We recognize that the closer that governance is to the real issues and real needs of the people, the better.

RICE: And so, at the provincial level, we are also working to develop better capability.

These are provincial leaders who have not even tended to communicate very much with Baghdad, because Baghdad was the source of everything. They are now going to have to start to deliver for their people on the ground.

Also as a part of that provincial effort, we have employed provincial reconstruction teams. Let me just say they're different than what we have employed in Afghanistan. Those have a very special character.

But the ones in Iraq are really aimed at some areas in which there has been a strong insurgency, where the insurgency has been defeated, and where we now need to build that provincial leadership capability infrastructure at the local level so that the insurgents -- the bad guys, in a sense -- don't come back.

And so that's the program for that $1.5 billion or so. It's really to build Iraqi capacity, which is, frankly, lacking. This is something that dictatorships don't worry about. And so Saddam Hussein left really not very much in the ability of the Iraqis to really govern themselves.

COCHRAN: Some of the funds requested in this submission include Afghanistan programs, some economic support funding for activities there.

What progress are we making to help develop the same kind of thing you have mapped out for Iraq in Afghanistan? Are we learning lessons in Afghanistan that can be translated into activities in Iraq to accelerate our progress there?

RICE: We are, indeed, learning important lessons in Afghanistan. One of the important lessons is that the reach of the central government into the provinces is also one of the major problems in Afghanistan, and we will use some of the lessons that we've learned in Afghanistan as we structure the outreach into the provinces in Iraq.

In Afghanistan, Afghanistan, of course, is quite a bit further along, and we have been working for some time, as have certain coalition partners, to try to develop ministry capability in Afghanistan.

Afghanistan also had the advantage that a number of people are returning to Afghanistan, people from the diaspora. If you go to Afghanistan, you will meet many Afghan-Americans who have actually gone back to try and help train Afghans in civil functions.

But we need to continue to support Afghanistan. It's not there yet. It is a success story. There is no doubt that despite the continued efforts of the Taliban to destabilize the country, that Afghanistan is becoming a functioning government at the center and in most of the provinces.

Some of the monies that are here for debt forgiveness, for refugee assistance are really next-step efforts with Afghanistan, and the reason that they are here in the supplemental is that these are really very much near-term costs that we're going to face in Afghanistan.

COCHRAN: One other inclusion is one for U.N. peacekeeping mission activities in Darfur, Sudan. The question I want to ask is, do you anticipate getting United Nations or other allied organizations to support this? The African Union, for example. What progress is made in enlisting support activities from others?

RICE: We believe strongly, Mr. Chairman, that there needs to be a blue-helmeted force in Sudan, in Darfur. This is not to say that the African Union mission has not been effective or successful.

RICE: It has been, but it's run the limits of what it can do. And we face a potential increased crisis because the situation in Chad is feeding an increased conflict problem in western Sudan.

It is also the view of a number of our European colleagues that there should be a U.N. mission and of Kofi Annan. It will also be more sustainable than simply trying to fund the African Union mission.

We are making some progress. Deputy Secretary Zoellick is in Europe as we speak in consultations with the Europeans and also with the African Union on getting an African Union request for the U.N. to go forward with the blue-hatting mission.

Assistant Secretary for Africa Jendaye Frasier is in Libya as we speak talking to the Libyans about this same thing. So we have a very active diplomatic effort. And it is our view that we will be able to get this done.

And we need to have the funds available when the blue-hatting takes place.

COCHRAN: Thank you very much.

We appreciate very much, Senator Byrd being here and other members of the committee. My intention was to recognize other senators in the other in which they came, but I'm going to make an exception in Senator Byrd's case and call on him at this point for any statement or questions he may make.

And, with the permission of the committee, we will follow the 10- minute rule. And each senator will have an opportunity to ask questions or make statements, for up to 10 minutes. And then we will have a second round if that's available to us.

Senator Byrd?

BYRD: I thank you, Mr. Chairman. And it is privilege to hear the testimony of these very distinguished witnesses concerning the president's supplemental appropriations request for the wars in Iraq and Afghanistan, two different wars.

By any measure, the size of the numbers associated with these two wars is staggering. The Congressional Research Service reports that the wars in Iraq and Afghanistan have cost U.S. taxpayers $369 billion so far. That number will increase by $72.4 billion because of this supplemental request, not to mention the $50 billion proposed for next year's budget.

Assuming this supplemental request is approved, total funding for the war in Iraq alone will reach an astounding $320 billion. This comes at a time when our deficit is estimated to be $357 billion and our national debt is rapidly approaching $9 trillion.

Those numbers are almost incomprehensible in their enormity. But the figures that are understood by all American taxpayers -- all Americans are the losses of our brave service members on the battlefield.

In Iraq, 2,297 troops have been killed, more than 17,000 wounded. In Afghanistan, 216 servicemembers have given their lives. Our hearts are with all of those who have suffered losses in these wars. And we pray for the safe return of all the young men and women who are currently in harm's way.

The Congress is considering this supplemental request to continue military operations in Iraq as a cloud of peril and uncertainty hangs over the nation.

In recent days, Iraq has only narrowly missed descending into an all-out civil war. And top administration officials acknowledge that that threat of civil war is still very real.

The Congress and the public have a right to know the administration's plans for Iraq before scores of additional billions of dollars are spent in that war.

The funds requested by the administration could very well be the funds being spent if our troops find themselves in the middle of a civil war in the coming weeks and months.

Congress cannot close its eyes, cross its fingers, appropriate more money and just hope that the administration knows what it is doing in Iraq.

It is alarming that parts of this supplemental request ask Congress to do just that. The supplemental asks for more flexibility for the secretary of defense to transfer funds at his discretion.

It asks Congress to exempt our troops' training programs from longstanding laws that prohibit assistance to human rights abusers. It asks for more reconstruction for Iraq without a firm plan for how it will be used.

And the supplemental asks for billions more for the war without presenting any idea when our troops may be coming home.

BYRD: Now, Mr. Chairman, we need straight answers to these questions, and I'm certainly grateful to you for calling this hearing.

Iraq continues to teeter on the brink of an all-out civil war. Even our ambassador to Baghdad is continuing to speak of Iraq as a Pandora's box of ethnic and religious tensions that could provoke even greater violence.

Secretary Rumsfeld, what is the plan if Iraq descends into civil war? Will our troops hunker down and wait out the violence? If not, whose side would our troops be ordered to take in a civil war?

RUMSFELD: Thank you, Senator Byrd.

General Abizaid is here, of course, and he can add a comment or two.

But, as you correctly suggested, there is a high level of tension in the country; sectarian tension and conflict. As you also correctly said, it is not in a civil war at the present time by most experts' calculations.

General Casey and General Abizaid have been impressed by the work of the Iraqi security forces and the fact that they have stepped forward and assumed the responsibility for the conflict that has occurred thus far. Needless to say, they've had some support from our forces, but the Iraqi security forces have been very much in the lead in dealing with it.

Fortunately, the Iraqi government leaders and leaders in the country of a non-governmental nature have almost to a person stepped forward and urged calm and argued against retaliation thus far, and that has been a calming effect.

And, General Abizaid, do you want to add anything?

ABIZAID: No.

I think the only thing I'd want to add, Mr. Secretary, is that there's no doubt that the sectarian tensions are hirer than we've seen and it is of great concern to all of us.

On the other hand, the role played by Iraqi security forces after the Samarra bombing was quite professional. They did a good job.

It's my belief that the security situation in the country, while changing nature from insurgency toward sectarian violence, is controllable by Iraqi security forces and multinational force forces.

It's also my impression that we need to move quickly to a government of national unity. I regard the current problem as more a problem of governance than security. But, of course, they mutually affect one another.

BYRD: Mr. Secretary, how can Congress be assured that the funds in this bill won't be used to put our troops right in the middle of a full-blown Iraqi civil war?

RUMSFELD: Senator, I can say that certainly it is not the intention of the military commanders to allow that to happen.

And to repeat, at least thus far the situation has been such that the Iraqi security forces could for the most part deal with the problems that exist.

I think it's important to underline the point that General Abizaid made. The situation, to the extent that it's fragile and tense, is as much a governance issue as it is a security issue. The need is for the principle players in that country to recognize the seriousness of the situation and to come together to form a government of national unity that will govern from the center and to do it in a reasonably prompt manner. And that will be what it will take, in my view, to further calm the situation.

And they have a period of weeks to get that done, and they are -- as we all read in the press and see on television -- they're debating, they're discussing, they're politicking, they're going through that process.

And to some extent, it's a relatively new experience for most of them.

BYRD: That is true, Mr. Secretary.

Is there any plan to respond to a civil war in Iraq?

RUMSFELD: The plan is to prevent a civil war, and to the extent one were to occur, to have the -- from a security standpoint, have the Iraqi security forces deal with it to the extent they're able to.

BYRD: Do you feel that there would be a request to respond to a civil war in Iraq?

RUMSFELD: I don't know that I'd characterize it that way.

BYRD: How can we avoid it?

RUMSFELD: The way that it -- the work that is being done today by the ambassador and by the embassy to bring the political parties together to form a government is the principle thing that needs to be accomplished to avoid it.

RUMSFELD: And that is what the ambassador and his team, as well as General Casey and his team, are working very diligently to do.

BYRD: Mr. Secretary, recent media reports indicate that one in five soldiers and Marines returning from Iraq have reported mental health problems. Yet, the supplemental request for mental health for the V.A. is zero. The request from the military specifies only $68 million for screening and assessment.

I ask this question of you or General Pace or both: How can the Defense Department and the V.A. effectively coordinate efforts to meet the long-term needs of these veterans with such a sparse and uneven funding effort?

General Pace?

PACE: Thank you, Senator.

Sir, as I understand it -- and I will get the numbers for you -- but as I understand it, there is a provision in the baseline budget to transfer money from the Department of Defense to the Department of Veterans Affairs for all the things that the Veterans Affairs Department does for us, and they do an enormous amount for our troops.

I also know that at the installation level, that we have family support groups that help not only the returning soldiers and Marines, but their families.

There are hotlines and groups that are at headquarters here in Washington and throughout the Army and Marine structure primarily to be able to provide support to those families.

BYRD: What long-term mental health services...

COCHRAN: (OFF-MIKE)

BYRD: Yes. Thank you. I thank the chairman. Thank you.

COCHRAN: The time of the senator has expired.

Senator Leahy?

LEAHY: Thank you, Mr. Chairman. And I'm glad we're having this hearing. I'm finding it very interesting, both the things requested and some of the things not requested.

I notice in the supplemental there are some areas -- well, the agencies requested money that's not in there. They mention first the request (inaudible) $60 million to continue what I believe is a very cost-effective program in Iraq, USAID's Community Action Program. Four U.S. NGOs are doing it. Only $15 million each. In fact, one was named after a young woman who was killed there, Marla Rezeka (ph).

And they restore basic services, they create jobs. What I've been told by commanders in the field, these funds have been extraordinarily helpful to our military over there.

Now, I want to help Iraq's provincial councils, but this is some area that we ought to be looking at. If we're going to shut down programs, let's pick some of the ones that are not working -- and I can give you a list of those -- not those that have been a success and the Iraqi people appreciate.

Mr. Chairman, I'll work with you and Senator McConnell to try to find the money needed to continue this.

LEAHY: And, secondly, Liberia and Haiti. We've talked about that. They've recently elected new leaders, have daunting challenges. Secretary Rice, you and the first lady were in Liberia for the inauguration of Ellen Johnson-Sirleaf, the first woman African head of state I think I shared the pride you had in that.

But I look at the supplemental. There's only a small amount for returning refugees. I think we should be doing more to help that government. It costs us an awful lot of money because of the failures in the last government (inaudible) avoid those failures.

And, of course, Secretary Rumsfeld, you mentioned the cost effectiveness of the U.N. peacekeeping mission in Haiti, but this supplemental has no money in it for that peacekeeping mission -- even though you read the reports out of Haiti, it's obviously needed.

The supplemental does include $51 million for refugees. In FY 2006, the administration requested $893 million; Congress provided only $782 million. So we're low on that, not just in Sudan, but in many other countries around the world.

I mention these as areas -- you know, we get the request, a lot of money is lumped out that everybody knows we need, and then the Congress has to figure out how to find the money.

Secretary Rumsfeld, you did mention the limitation aid to the Indonesian military. Of course, during that period, they were behaving sort of like a criminal enterprise -- all types of corruption and killings of political dissidents and so on. If this country stands for something -- I believe it does -- we have to show that we do have limitations on help we will give.

Mr. Secretary, when you came in here this morning, I mentioned something to you -- or, I've written several letters. I've gotten back several very nice form letters, but didn't answer any questions. It's about the Talon program.

We find from the press, not from our own government, that a number of peaceful protest groups, like the Quakers, have somehow ended up in the department database. And I worry about the department spying on citizens that goes beyond any reasonable or legal effort to protect Defense Department personnel or installation.

I worry that we're getting back into the COINTELPRO days of Vietnam. My letters ask for specific things that, one, should have been very easy to answer: Is the press right that there was surveillance of citizens in my home state of Vermont?

I would think that senators that have been here for 31 years ought to be able to get an answer to a simple question like that. For months, everybody's refused to answer my question.

So I'll ask you, did they have surveillance of citizens in Vermont?

RUMSFELD: Senator, I'm told that the Department of Defense did not conduct any investigations of the domestic activities of persons in Vermont, nor did it target any groups in Vermont for the collection of intelligence.

Apparently, the Department of Defense did receive two reports that came to it from the Department of Homeland Security, and they were reports about protests, or potential protests, against DOD recruiters by Vermont groups.

RUMSFELD: Subsequently, the report came to the Department of Defense. The Army personnel generated a report based on that information, that they had not generated themselves, and placed it into the database.

The first TALON report contained information about a potential protest action against military recruiters attending a career function on March 8th...

LEAHY: March 8th of what year?

RUMSFELD: I'm sorry, of 2005, in an unidentified Vermont town. Two participating groups were named in the report. The second report focused on a protest at an Army recruiting office in Washington, D.C., and also noted that another protest was planned that day in an armed forces recruiting center in Williston, Vermont, but no group was mentioned.

So what happened was...

LEAHY: So the press account saying that Quakers were under surveillance by the Department of Defense is inaccurate.

RUMSFELD: I didn't see the press report, therefore I would not want to characterize...

LEAHY: But if there was a press report that said that Vermont groups were under surveillance by the Department of Defense, such a press report would be inaccurate -- if there was such a press report, it would be inaccurate.

RUMSFELD: I'm reluctant to heave charges around.

LEAHY: I'm not asking for charges. That's a simple yes or no.

RUMSFELD: Well, it isn't for me.

Let me explain this program. The program is for the purpose of force protection of the United States military facilities in the United States of America, which is a legal obligation of the Department of Defense, to protect their forces and their bases.

So they have a program that allows information to be sent to them that raises questions about possible threats to their bases.

If that information comes in and is not evaluated, it sits there...

LEAHY: Mr. Secretary, that's not my question. The question is, if there was a report of surveillance of Vermont groups protesting the war in Vermont by the Department of Defense, that report is inaccurate. Yes or no?

RUMSFELD: I would have to see the report. I have read to you the fact that some reports about Vermont groups came into the department, but they were not originated by the Department of Defense.

LEAHY: I should point out, we have -- I know there are a number of Quakers, some older than you and I, who peacefully protest once a week in Vermont on the war. There are some in Vermont who do not support the war in Iraq. And if the intent is to surveil them, you could save your time.

LEAHY: I'll speak against the war on the floor and you can just take it off CSPAN and save your money.

Let me speak about the Darfur peacekeeping because Senator Cochran spoke about this. A lot of people call for more, Secretary Rice, for more peacekeeping troops in Darfur.

The administration does not support that. I see this as genocide. I don't know how you could call it anything else. The African Union peacekeepers are incapable of performing some of the basic functions. There seem to be no consequences for attacking civilians. And some of the attacks are just horrendous.

I mean, they're nightmarish, when you hear the descriptions. And I will not go into them. You've read the same intelligence reports -- actually, some of the same press reports I have.

Now, the $161 million you've requested as a supplemental for peacekeeping in Darfur will cover our share of sustaining the current inadequate number of troops. It doesn't do anything to help pay for the doubling of U.N. troops, even though the president has acknowledged that's needed.

Do we need more money?

RICE: Senator, I think, at this time, we believe that this is an appropriate amount of money for the coverage of the U.N. peacekeeping force that is likely to be available in this period of time.

As you know, we would authorize the U.N. peacekeeping force in the Security Council. There would then be an effort to actually raise that force. And we believe that this funding from the supplemental can help us with the first stages of that.

But we certainly will need to have our contribution be adequate to cover the peacekeeping force.

LEAHY: Let me ask, just so you can add to your answer: Can we stop the genocide in Darfur?

RICE: Well, Senator, I hope that we can stop the violence and the genocide in Darfur. That's certainly what we are attempting to do. There are really three prongs to this policy.

Let me first say that we do, in fact, favor both a U.N. peacekeeping force and an expansion of the numbers of peacekeepers that are now on the ground.

And one reason that we want to go to a blue-hatted force is that we believe we would have a more sustainable way to attract enough forces to have a doubling of the force in Darfur. So we do favor that.

We also favor, as the president has said, a role for NATO in the planning and logistics and support to that force. And General Jones is working within NATO to see what we can do to effectively bring that O piece into it.

So we want a more robust peacekeeping force in Darfur.

RICE: The president himself has spoken to that.

But it's going to require more than a peacekeeping force in Darfur to end the violence there. It is also going to require an effort at a peace agreement between the parties. And we are spending a lot of time in the Abuja talks trying to bring a peace agreement between the parties.

We also, Senator, are trying to make certain that the comprehensive peace agreement for the agreement between the south and the north is fully implemented, because that ended a civil war that killed millions of people over decades.

And so there are many pieces to our policy in Darfur, but we do favor a more robust peacekeeping force for Darfur.

COCHRAN: Thank you, Senator.

Senator Stevens?

STEVENS: Thank you very much. And we commend all of you. I'm glad to see you take the time to come justify these requests.

I must say, though, Mr. Secretary, I'm worried about the sustainability of the level of funding for the department when we've had so many supplementals now, in addition to the annual budgets during this period. The chairman of the Budget Committee believes that these monies are fungible and they're flowing back and forth between the funds that we put into the regular bill and the supplemental, and there's hardly any way to track where the money's going.

Let me tell you, for instance, right now, in the '06 bill, we funded monies to train the Afghan police forces in the State Department appropriation bill. This supplemental requests money for that purpose in the Department of Defense supplemental.

Now, that's an indication of the fungibility.

Why is it in the Defense bill now when in the regular bill it was in the State Department bill?

RUMSFELD: Well, I'll start, and Secretary Rice can comment.

Historically, training for police has been considered part of the Department of State's activity. They've had an office that engaged in that.

And in the case of Iraq, the Department of State had the responsibility for the training and equipping of Iraqi police up to...

STEVENS: This is Afghan now. This separates out Afghan police forces from State Department in the regular bill and puts it in the supplemental for your department.

RUMSFELD: OK. The same principle's the same. The State Department had the responsibility for Afghanistan, and in a discussion between the Department of State and the Department of Defense it was agreed that it would be appropriate since we were staffed up to deal with the Ministry of Defense security forces there, that we assume that responsibility for Afghanistan.

RUMSFELD: Originally, under the Bonn process, I believe the German government had the initial responsibility, but to make sure we got the job done and could begin reducing U.S. military forces, the Department of State asked us to assume that responsibility with our people, and that is now currently the case.

The Department of Defense has that responsibility in Afghanistan. And I believe that's the reason for the changing in the funding.

STEVENS: General Abizaid, there's $2 billion in the supplemental for infrastructure projects for Iraq and Afghanistan security forces. We have already funded 77 military base projects, 345 police facilities in Iraq, and now this is $2 billion more. Will this fully fund the infrastructure requirements for security forces in Iraq and Afghanistan now?

ABIZAID: Senator, I can't tell you for Afghanistan whether it fully funds it or not. I think Afghanistan, there will be continuing requirements, because the infrastructure conditions there are so abysmal.

STEVENS: Well, General, they were funded through the Iraqi Reconstruction and Relief Fund in the past. This time, $2 billion goes into your budget.

ABIZAID: I can't answer the question about where they went in the various different locations in the budget.

STEVENS: I'm asking the question, because, you know, we really don't -- when we get these monies as they come in on this supplemental request basis, we don't get a continuity of really reporting that we would get if we had it through the regular bill.

What about the IEDs? We've put up $2.9 billion to date for the IED counterthreat, to try and establish it. We have now in this bill, I understand it, a new permanent organization for that purpose, and there is a request in this supplemental for another $1.9 billion.

I'm sure we all fear IEDs. But is this new organization now to take over the total expenditure of funds to defeat the IED threat?

ABIZAID: Sir, I'll try to answer that, if I could.

General Meigs's organization does now have responsibility for the Department of Defense, reporting directly to the secretary, for all things that have to do with IED defeat...

STEVENS: He will spend this money that's in this supplemental?

ABIZAID: He will make a recommendation to the secretary of defense for disbursement of the funding in the supplemental, yes, sir.

STEVENS: Thank you.

To date, we have provided -- and the president, of course, has requested -- we've approved $31.7 billion for equipment repair and maintenance, procurement and depot maintenance. This is now another $19.6 billion for that purpose.

We saw some of that when we visited Fallujah and we saw the up- armoring of the major trucks. But this is an extremely expensive process when it's done in-country there. How long do you plan to pursue emergency supplemental funding for restitution of these vehicles? Some of it's not even done in-country, I understand. Who can answer that question?

RUMSFELD: The broad approach of the department has been that as equipment is used, either destroyed because of combat or exhausted because of use at a higher level than normally would be the case in a training environment, it will be replaced by supplementals.

RUMSFELD: Now, you have to put a caveat on that because, instead of replacing everything exactly the way it was, people are replacing things the way they ought to be.

So if you have a next-generation, for example, up-armored Humvee and you'd damaged an old Humvee, you would replace it with a later generation Humvee.

And the goal, the intent of the Department of Defense and, I believe, the Office of Management and Budget, Senator Stevens, is to continue with supplementals for war costs, which, clearly, that would be categorized as a war cost.

STEVENS: Mr. Secretary, we provided $8 billion for equipment procurement and $4.1 billion in the bridge fund that was attached to the annual bill for '06.

This supplemental puts $19.6 billion more into that same account, now, for '06, plus there is a bridge fund going into '07.

Now, what I'm asking, really, is we're going to review that procurement account in the regular bill for '07, but here we've got $50 billion standing over our head which is a bridge fund going into '07 which you will spend for the same thing we're reviewing now.

I again say we have very little ability to deal with this. I, for instance, don't understand why this money would be spent here in the U.S. to buy new equipment, other than in terms of the regular bill.

I understand it may have been destroyed over there, but you're buying the new equipment here.

Now, we have difficulty plowing these budgets through, Mr. Secretary. And I think that's what's bothering the Budget Committee now, in terms of this funding.

These are enormous amounts of money going into this procurement and restitution accounts. Have you got a watchdog on that activity?

RUMSFELD: I'm told that there have been something like 31,000 pages of budget justifications that have been provided, when you combine the regular budget and the bridge and the supplemental.

STEVENS: We have not any justification for this supplemental, Mr. Secretary. We had that discussion with Jonas yesterday. We'll go on to it later.

Let me ask one last question, General Abizaid. And I think it's very important to this senator.

How important is the port of Dubai to the war effort right now?

ABIZAID: The port of Dubai is very important to the war effort, Senator.

STEVENS: Can you explain why?

ABIZAID: Well, it's one of the largest ports in the region. A tremendous amount of equipment that ends up in the war zone ends up transiting through there.

U.S. Navy aircraft carriers can use it and do it. It's a port of call for our service men and women. I think it's one of the largest in the world, if not the largest in the world.

STEVENS: What percentage of the activities that you have supervised goes through the port of Dubai?

ABIZAID: It's hard to say what percentage of the activities, but clearly the port of Dubai is essential for the defense of the Arabian Gulf.

STEVENS: Thank you, Mr. General.

COCHRAN: Thank you, Senator.

Senator Mikulski?

MIKULSKI: Thank you, Mr. Chairman.

Mr. Chairman, I would like to thank you for the way you've structured this hearing. To have the secretary of defense, the joint chief, the general in the field and our secretary of state at the table, I think, is a very good way to have done this.

I see this as a year of transition, particularly in Iraq. And, in that year of transition, one of the questions will be, in addition to the policy, support and passion for our troops, is how are we going to continue paying the bill, along the lines that even Senator Stevens has asked.

My question goes to Iraq oil. When we were going into the war, we were assured that we wouldn't have to worry about how big the bill was because we were going to be there on a short term basis and that Iraqi oil would pay the bill for reconstruction, self-help, et cetera.

My question is where are we in terms of Iraqi oil? Who controls it -- distribution, marketing?

Is it flowing? When will it flow? And then, what about the issues of corruption and the impact on ethnic conflict?

And I turn to anyone at the table -- Mr. Secretary, Dr. Rice -- how you would like to address that. But where are we with the oil? When is it going to start to pay the bill? What about corruption? And what about its reliability as a future revenue stream?

RICE: Thank you, Senator. Perhaps I should start and then, if anyone would like to add.

First of all, Iraq is a country that we believe should one day be sustainable -- be able to sustain its own expenses because it does have this great natural resource.

RICE: It is in that sense in distinction to Afghanistan, which does not have resources of that kind.

There have been two problems with the oil industry. One is a significant under investment in the oil industry during the period of time of Saddam Hussein, even though the Iraqis were producing about 2 billion to 2.5 billion barrels per day and exporting about 1.3 billion barrels a day, it was doing it on a very creaky infrastructure.

And, indeed, some of the investments that we made as a part of the I.R. funding, the Iraqi reconstruction funding that was provided by the Congress, was to increase the capacity in the near term of the Iraqis to produce.

It is also the case that the Iraqis have been looking at ways to have investment laws that will make it possible to get some foreign assistance with technology and the like for their oil industry, because one of the problems with the oil industry under Saddam Hussein is that it was isolated from the best of technologies, although they have...

MIKULSKI: Madam Secretary, I've got about five more minutes.

RICE: Yes, I'm sorry.

MIKULSKI: Are they producing it?

RICE: They are producing currently at below the prewar range of 2 billion to 2.5 billion largely because of problems in inefficiency in the management of the oil industry -- and we've worked very hard with the Iraqis on that piece of it -- but also the interdiction by insurgents of the oil pipeline in the north, which is 400,000 barrels a day that has been essentially been shut in.

What we're doing about that is that we are working with the Iraqis to improve their coordination on the oil industry. We're working with the Iraqis to improve security for the oil pipeline. And it is the hope that we would be able by the end of this year -- as you said, this is a transitional year...

MIKULSKI: The end of the calendar year, Madam Secretary?

RICE: The calendar year -- to be able to see crude production at about 2.8 billion barrels a day and exports at about 2.2 billion. Their budget number...

MIKULSKI: But that's pretty slim, isn't it?

RICE: It would be about -- it would be more than Iraq was producing before the war...

MIKULSKI: And what would be the revenue generated at that level?

RICE: What they are counting on in their projections right now is about $1.6 billion to $1.8 billion. So if we would...

MIKULSKI: So it would begin to pay the bill?

RICE: So they would be...

MIKULSKI: But who in this national government of unity that we all hope sticks together -- who controls the oil? Is it the Oil Ministry?

MIKULSKI: Is it through the prime minister?

And then the tools against corruption. Because this seems to be an endemic problem in the region.

RICE: It is an endemic problem in the region, and we have worked very hard with the Iraqis so that they don't fall -- we hope they will not fall prey to some of the problems. But there is significant corruption in the system at this point.

They have created a commission to deal with corruption, openness in government, declaration of assets, that kind of thing. It is now under the control of the state oil company and the Oil Ministry. But I think you will see the Iraqis look also at innovative ways to think about the oil resource over the next several years so that they can get it closer to the people and less centralized in the government.

But right now it follows the normal pattern in that region. It's state-owned oil.

MIKULSKI: I want to go to Afghanistan, but having the pleasure and honor of being on Defense Approps, when we get into defense appropriations I'm going to come back, other than through the supplemental, to ask about guarding the infrastructure and transitions.

Iraq has an asset we need, which is oil. Afghanistan has an asset we don't want, which is opium. This, then, takes me to Afghanistan and the real need for a success story there, the backing of truly a democratic movement at all levels, the return of the diaspora. The Karzai family in the diaspora resides in Maryland. We're proud of their efforts.

I'm concerned about the opium issue. Number one, what are we doing to control it? And number two, is the opium money funding terrorism and insurgent activity, both in Afghanistan and in the region? And could you share with us in what ways we could perhaps provide a more muscular support to Afghanistan in this area? Because I feel, if we lose control of opium, we lose control of Afghanistan.

Is that a good analysis?

RICE: Senator, I think the single most important threat to Afghanistan now in a strategic sense is probably the opium trade, because it has not only the effect that you mentioned of funding terrorists, but it is a source for people who are then able to threaten the central government, threaten people in the provinces. And so we've been very attentive to the opium problem.

It's a multi-pronged approach that we're taking. One is that the Karzai government believes very strongly that public education is important. They've been growing this crop for a long time. People have to be dissuaded.

Secondly, it is very important that there be alternative livelihoods for the farmers who are told not to plant, and we have significant programs and are enlisting also the help of others, including the British, who have the lead on this area.

Third, we are working to help the Afghans train forces that are particularly effective at this kind of law enforcement/paramilitary operation. And I think we're having some success in getting those forces into place now.

And finally, the criminal justice system has got to be able to penalize people who engage in the opium trade.

And so you will see that in our '07 request, not in the supplemental but in our '07 request, there is considerable money for civil justice and rule of law effort in Afghanistan. A lot of that is...

MIKULSKI: Now, would that be in the foreign ops request?

RICE: This would be in the foreign ops request.

MIKULSKI: So that's where we should really look to provide assistance on an ongoing basis.

RICE: That's right.

MIKULSKI: Now, I have to ask you about the Polish visas. As you know, now coming back to Afghanistan, Poland will play the lead role in leading the NATO forces in Afghanistan. It's just what we had hoped with the expanded NATO and the coalition.

As you know, it continues to be a prickly issue with our country. Senator Lugar and I are trying to focus it even more on student public exchange, kind of Fulbright-style type exchanges.

Do you know, can you bring us up to date on where we are on cracking that?

And I want to thank you for the very collegial cooperation of your staff in working with us.

RICE: Thank you, Senator.

We really do want to try to solve this problem, for Poland and for a number of other important allies who are now members of the E.U. but are not capable of being a part of the visa waiver program, for instance. We have, as we've discussed, you and I personally discussed a visa road map program with the Poles to try to get them to the metrics that we take to determine who can be a part of the visa waiver program.

I think the Poles believe that we are making progress on that. Our ambassador certainly does.

We also want to make sure that students from this area can come to the United States. We held a university summit recently, Margaret Spellings and I did, to try to encourage foreign students to come. We'd like nothing better than to have more of them from East Central Europe. And I think our staffs are working together to try to find ways that we can do this.

We have to keep a worldwide program. We can't have exceptions to the program. But we are working very hard to see what we can do for students.

MIKULSKI: No. And I appreciate we can't have exceptions, but they're exceptional allies...

RICE: Absolutely.

MIKULSKI: ... carrying exceptional responsibility. And I think that should be acknowledged. Kind of almost like a veteran's preference. I'm working on it.

RICE: Thank you, Senator.

MIKULSKI: Thank you very much.

COCHRAN: The senator's time has expired.

It's either Senator Bond I think, or Senator Kohl.

9 (UNKNOWN): Senator Allen.

COCHRAN: No, he came in after Senator Murray.

I think it's Senator Kohl.

Senator Kohl?

KOHL: Thank you, Mr. Chairman.

Secretary Rumsfeld, this is the fourth time that you've come before our committee for emergency funds for the war, $445 billion, thus far. America has paid a high price in dollars and most importantly in the lives of American soldiers.

And now we find ourselves in a position no great country should ever occupy -- namely, that we don't control the events that determine the success of the war or even the safety of our troops.

You've been telling the American people that the situation in Iraq is not that dire. But Mr. Secretary, with all due respect, and speaking for a majority of the American people, that is hard to swallow.

From the beginning, the administration's Iraq strategy has been an amalgamation of misdirection and missteps. Intelligence about weapons of mass destruction that justified our invasion, as we know was wrong.

We went to war with no plan beyond the initial few weeks of military action. The estimates of the number of troops needed to accomplish the mission were too low.

And now, we are in Iraq with public support waning, American casualties continuing to mount, and no apparent timetable or plan for turning Iraq back to the Iraqis and bringing our troops home.

Mr. Secretary, a bipartisan majority of the Senate has agreed that 2006 needs to be a year of transition toward a successful conclusion to our involvement in Iraq.

Secretary Levin (ph) has suggested that the Shiites, Sunnis and Kurds are all counting on the U.S. presence to keep the country from falling into civil war. He argues that we should use the leverage to motivate the Iraqis to make the necessary compromises to achieve the broadly based political settlement that is essential for defeating the insurgency, that we should tell the Iraqis that if they fail to reach a solution by the timetable that they have set forth, then we will consider a timetable for the reduction of U.S. forces.

Can you comment, Mr. Secretary, on that option?

RUMSFELD: First, Senator, you're quite correct that the intelligence with respect to the weapons of mass destruction has not proven to be the case.

The comment you made that there was no plan with respect to the war, I'll let General Pace, who was the vice chief at the time, and General Abizaid, who was the deputy CENTCOM commander, comment on that, because there were plans.

Third, with respect to the timetable question, it's a difficult one. And you put your finger quite on it.