Global Policy Forum

By Adam Entous

The Pentagon (news - web sites) has begun tapping into its $25 billion emergency fund for the Iraq (news - web sites) war to prepare for a major troop rotation and intense fighting this fall, administration officials said on Tuesday, despite the White House's initial insistence that it had enough money. The Pentagon has already used more than $2 billion from what the White House dubbed its "contingency reserve" fund for Iraq. The money is being used to ramp up production of armored Humvees to support the troop rotation, as well as to buy body armor and bolster fuel supplies, the officials told Reuters.

The decision to use the $25 billion in Iraq reserves underscores concern within the administration about the rise in anti-American violence in Iraq. The decision follows last week's announcement that President Bush (news - web sites) plans to divert nearly $3.5 billion from Iraqi water, power and other reconstruction projects to improve security.

The White House had initially asserted it would not need additional war funding until January or February, 2005 -- well after the November presidential election. Even after requesting the $25 billion reserve fund in May, White House officials insisted it was an "insurance policy" that they hoped not to tap, though they acknowledged that could change if violence flared up. "As we've always said, our troops in the field will have what they need, when they need it," said Chad Kolton, spokesman for the White House Office of Management and Budget. "In this case, making some of those resources available now ensures that our troops will have the equipment they need going into the fall (rotation)," Kolton added.

Democratic presidential candidate Sen. John Kerry (news - web sites) accused Bush this week of hiding plans to call up more members of the part-time National Guard and Reserve after the election. The Bush campaign called Kerry's assertion "false and ridiculous," and administration officials said the Pentagon decided to tap into the reserve fund because resources were running low as the fiscal year nears its Sept. 30 end.

Enough funding?

Congressional aides and defense analysts said the use of the reserve funds could be an early sign that the Pentagon will run out of money sooner than the White House had expected. Bush has so far spent $120 billion in Iraq, not including the $25 billion contingency fund, and officials said he could seek another $50 billion in February. With the rate of spending in Iraq already at more than $1 billion a week, the Pentagon may not have enough money to "get past Christmas," let alone wait until February, said John Pike, a defense analyst with GlobalSecurity.org. He said the White House could need closer to $75 billion next year.

Steven Kosiak, a defense analyst with the Center for Strategic and Budgetary Assessments, said the administration could shift funding around to fill any shortfall. He added that the decision to dip into the reserve fund so soon was further evidence "the war is costing more than the administration anticipated." Critics have long accused Bush of understating war costs. Before the invasion, then-White House budget director Mitch Daniels predicted Iraq would be "an affordable endeavor," and Deputy Defense Secretary Paul Wolfowitz even assured Congress: "We are dealing with a country that can really finance its own reconstruction and relatively soon."

Sen. Kent Conrad (news, bio, voting record) of North Dakota, the top Democrat on the Senate Budget Committee, said tapping into emergency reserves was "another example of this administration saying one thing and doing another." "This administration is riddled with flip-flops," Conrad added, echoing a charge Bush uses against Kerry.