GovernmentExecutive.com

The Office of Management and Budget has submitted the first of its congressionally mandated quarterly reports on the proposed uses of the $18.65 billion set aside for Iraq reconstruction, as part of the $87.5 billion fiscal 2004 emergency war supplemental enacted last year.

The report, sent to the House and Senate Appropriations Committees last week, said that $1.39 billion was spent in the first quarter of fiscal 2004, although some funds would be obligated in the second quarter. The bulk of the funds--$772 million--have been spent on security and law enforcement, and no funds have yet been obligated for road construction, oil infrastructure, transportation and telecommunications, or private sector development.

Funding is expected to jump to $6.36 billion in the second quarter, including $1.6 billion for oil infrastructure. That represents the lion's share of the $1.7 billion earmark for that purpose. The report stated that at the end of the fiscal year, $5.79 billion would be left for fiscal 2005 obligations--mostly consisting of $2.94 billion for water resources and sanitation and $2.566 billion for electric sector development. The report cautioned that since the White House submitted its supplemental request, circumstances have changed--such as the procurement of $13 billion from foreign donors at the October donors' conference in Madrid, the November agreement between the Coalition Provisional Authority and the Iraqi Governing Council to accelerate the transition to Iraqi sovereignty, and the "revised emphasis on funding for security forces."

Security funding is expected to jump to $1.56 billion in the second quarter, gradually trailing off until no funds are expected to remain for fiscal 2005.

"Security is the immediate priority of the Iraqi reconstruction effort," the report stated.

However, President Bush's fiscal 2005 budget is not expected to contain any funds for Iraq reconstruction efforts, leading some congressional aides to speculate that another supplemental request will be forthcoming despite White House statements to the contrary.