Friday, October 5, 2007

Senate Majority Leader Harry Reid and other Democrats yesterday stood beside pallets piled high with fake money as they criticized President Bush for losing $9 billion of taxpayer funds in one year in Iraq and vetoing $7 billion a year for children’s health care.

But the money in Iraq didn’t come from U.S. taxpayers — although it was U.S. currency. An inspector general report stated the U.S.-led government in post-Saddam Hussein Iraq poorly accounted for about $9 billion of Iraqi funds. It’s not clear where the money went or how it was spent.

It was the second time in a week that Mr. Reid fudged facts when challenging the White House. He said last week that Mr. Bush’s threat to veto the defense authorization bill would make him the first president in U.S. history to reject the defense legislation, although Presidents Carter, Reagan and Clinton also vetoed the annual bill.

“One of the most incredible examples of fiscal incompetence and lack of accountability in our nation’s history is this administration’s inability to account for at least $9 billion they lost in Iraq in 2003 and 2004,” said Mr. Reid, Nevada Democrat, adding that the president’s priorities are out of whack.

Sen. Amy Klobuchar, Minnesota Democrat, said losing $9 billion and blocking SCHIP “simply defies common sense.”

Mr. Reid stood firm when questions about the source of the $9 billion in Iraq. “That was American money,” he said.

When pressed about the Iraqi money after the press conference, Mrs. Klobuchar said it was her understanding that “a lot of taxpayer money was lost in Iraq and that was some of it.”

Sen. Edward M. Kennedy, Massachusetts Democrat, backed them up.

“Where do you think [the money] came from?” he said as he left the press conference.

The remarks echo the shrill rhetoric dominating the Democrat-led Congress’ run-in with the White House over the State Children’s Health Care Program (SCHIP), the first in what is expected to be a series of veto showdowns.

“This is exactly what the American people don’t want us to do, play political games instead of getting things done,” said House Minority Leader John A. Boehner, Ohio Republican, who criticized Democrats for delaying a veto-override vote to milk political gain from the issue.

Mr. Bush vetoed the bill Wednesday, saying the legislation was too expensive and a step toward socialized medicine because it extends government-funded insurance to families that could afford to pay it themselves.

The bill would raise the cost of the popular program for low-income children from $25 billion to $60 billion over five years to insure about 10 million children, about 4 million more than currently covered. Mr. Bush and Republicans have offered a $5 billion increase.

A Reid aide later clarified that the money unaccounted for, was in fact, U.S. currency although not taxpayer dollars. The money came from funds seized from the Hussein government and from Iraqi oil proceeds.

“The president talks about fiscal responsibility but … they don’t know what happened to that money,” the aide said.

Former Ambassador L. Paul Bremer III, who ran the Coalition Provisional Authority (CPA) in postwar Iraq in 2003 and 2004, testified before a House panel in February that accounting discrepancy involved Iraq oil money — not U.S. taxpayer dollars.

Stuart R. Bowen Jr., the special inspector general for Iraq reconstruction, told the same committee in 2005 that the audit only showed flawed accounting practices.” It did not say that the money was lost,” Mr. Bowen said. “It did not say that the money was stolen. It did not say that the money was fraudulently disbursed by U.S. authorities.”

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