Bush Stockpiles Oil For Multibillion-
Dollar War With Iraq

President Bush is being warned that a war with Iraq costing billions of dollars would harm the American economy and stall his domestic agenda

July 31, 2002
From Roland Watson in Washington

PRESIDENT BUSH is being warned that a war with Iraq costing billions of dollars would harm the American economy and stall his domestic agenda.

A rerun of the 1991 Gulf War, which involved 500,000 US troops and military assistance from dozens of other countries to evict Iraqi troops from Kuwait, would cost $80 billion (£51 billion) at today’s prices.

The largest number of American troops envisaged so far by the Pentagon for military action aimed at toppling President Saddam Hussein is half that figure. But the United States would have to bear the whole burden, which is likely to come to tens of billions of dollars.

In 1991, the $61 billion cost of Operation Desert Storm was split between Saudi Arabia, Kuwait, Japan and the US. The first three paid $48 billion, with the US picking up the rest.

Unlike a decade ago, the US cannot count on any allies to make financial contributions, even though Tony Blair has hinted broadly that Britain would play a part.

The Bush Administration has already started trying to offset the future costs of a war by stockpiling American oil reserves in anticipation that global supplies would be disrupted and oil prices would rise.

Oil shipments into America’s strategic reserve have reached record levels, adding some 150,000 barrels a day. The White House aims to add more than 100 million barrels to the reserve, which would bring it close to its 700 million barrels capacity. Saddam is the sixth-biggest oil supplier to the United States, contributing 8 per cent of American oil imports last year, a million barrels a day at its peak.

While the US is boosting its oil reserves, there is less that it can do to guard against the wider economic impact of a war. Due to the after-effects of September 11, combined with Mr Bush’s ten-year, $1.3 thousand billion tax cut, a $127 billion US budget surplus has been transformed into a $165 billion deficit in less than 12 months.

No congressional representatives would suggest that America should tailor its military action according to budgetary constraints. But they said that Mr Bush will have a domestic price to pay.

John Spratt, the senior Democrat on the House Budget Committee and a member of the Armed Services Committee, said that Washington would spend what it took in a war with Iraq, but that issues such as drug provision and other care for the elderly would suffer.

Mr Spratt said: “While it’s not beyond our means, we can’t have it all. Since there is no surplus in the budget, there will be trade-offs and there almost certainly will be deeper deficits and more debt.”

US military planners have come up with a range of plans, from a 250,000-strong invasion force to a more surgical thrust towards Baghdad aimed at swiftly crippling Saddam’s command structure.

The “lighter” option is more likely to be guided by the failure of Washington so far to persuade Turkey or Saudi Arabia to allow access to US troops.

Donald Rumsfeld, the Defence Secretary, said that Washington had taken no decision about use of military action to overthrow Saddam. But he cast doubt on whether Iraqi concessions over arms inspectors would be enough to deter Washington from war with Iraq.

He told a Pentagon news conference that it was “difficult to begin to think they might accept” an inspections regime that was “without notice, anywhere, any time”.

Mr Rumsfeld also cautioned that if Washington pursued the military option, the Pentagon would not be able to rely on air power alone to destroy Iraqi weapons.

http://www.timesonline.co.uk/article/0,,3-370150,00.html