Iraq struggles with spending plan as oil dips

[March 03, 2009]  BAGHDAD (AP) -- Iraqi lawmakers struggled Tuesday to hammer out spending plans that could include additional cuts in reconstruction and military purchases because of falling oil prices.

Parliament members gathered in separate caucuses before an expected full session to discuss the budget, which has been trimmed by more than 10 percent. The cuts will likely require officials to mothball some reconstruction projects and military arms purchases even as Iraq prepares to take full control of security next year.

Parliament has repeatedly postponed voting on the proposed $64 billion budget following calls for deeper austerity. The impasse has frozen other critical tasks facing lawmakers, including setting a framework that would regulate foreign oil investment.

Noureddin al-Hiyali, a lawmaker of the main Sunni bloc in parliament, criticized fiscal planners for basing projections on $50 a barrel for oil and creating a "fake budget."

Oil prices are hovering near $41 a barrel after hitting highs of about $150 a barrel last summer. Oil exports account for about 95 percent of Iraq's revenue.

Iraq is seeking to boost crude exports to offset falling prices. But an Iraqi oil official, Falah al-Amiri, said that February showed the opposite trend -- slipping to about 1.8 million barrels a day from almost 1.9 million the previous month.

The decline was partly blamed on infrastructure problems and bad weather.

Meanwhile, in a ceremony in Baghdad, more than 250 U.S. soldiers became American citizens on Tuesday.

The No. 2 U.S. commander in Iraq, Lt. Gen. Lloyd Austin, welcomed the group shortly before they took the formal oath of citizenship inside one of Saddam Hussein's former palaces.

The soldiers received a citizenship certificate and an American flag each. Some of the soldiers had their weapons slung over their shoulders.

Since 2004, active-duty immigrant soldiers can apply for citizenship without the normal three-year waiting period and without being inside the United States.

Also Tuesday, the U.S. military said the number of detainees held by the Americans in Iraq has dropped to 13,832 from a peak of 26,000 in 2007. A military statement said U.S. forces have been releasing an average of 50 detainees a day.

The prisoners are being released or transferred to Iraqi custody to meet the requirements of a security agreement that took effect on Jan. 1.

[Associated Press; By SAMEER N. YACOUB]

Associated Press writer Sinan Salaheddin contributed to this report.

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