Sun, Sep 28, 2003 - Page 7 News List

Critics question Marshall Plan comparison

WAR DOLLARS American taxpayers are pressuring Capitol Hill to get some form of return on Iraqi reconstruction in the spirit of the post-World War II deal to boost Europe

NY TIMES NEWS SERVICE , WASHINGTON

The Bush administration says its plan to rebuild Iraq is modeled on the farsighted spirit of the Marshall Plan. But lawmakers and historians are increasingly finding flaws in the postwar analogy, many of which are at the heart of the debate over the administration's US$87 billion spending request, which includes a modest amount for Afghanistan.

The Marshall Plan, they say, required a much larger contribution from its European beneficiaries after World War II than the administration is asking of Iraq. European countries were required by the Truman administration to match every dollar of US aid, and 10 percent of the Marshall Plan's US$13 billion (worth about US$105 billion today)was made up of loans.

By contrast, the US$20.3 billion reconstruction grant for Iraq is not contingent on any contribution from that country's future revenues. Paul Bremer, the US administrator in Iraq, told senators this week that Iraq might eventually be able to share a large portion of the costs with its oil revenues, but he said the country is too burdened with debt to take on another large loan now.

Iraq owes US$200 billion, about half in reparations to Saudi Arabia and Kuwait for damages surrounding the invasion of Kuwait and the 1991 Persian Gulf War, the rest borrowed from France, Russia, Germany and Japan by Saddam Hussein's government.

The refusal to guarantee the US some form of return on its investment is causing enormous consternation among both Republicans and Democrats on Capitol Hill. Their constituents are pressing them to explain the great expenditures on Iraq at a time of high deficits and squeezed domestic spending.

Republican Senator Susan Collins of Maine told Bremer at a hearing on Thursday that Americans would be "justifiably outraged" if a dime of taxpayer aid allowed Iraq to pay back its loans to creditors in France or Saudi Arabia.

"The American taxpayer is very generous," she said, citing Iraq's short-term needs. "But in the long run, Iraq will be a prosperous country. Therefore, it seems logical to many of us to come up with a way to structure part of the construction costs as a long-term loan."

Scott McClellan, the White House spokesman, said on Friday that the administration still opposed a loan to Iraq but was willing to work with Congress to get the package approved.

Bremer and other administration officials say Iraq's needs are immediate and desperate, and the investment is necessary to prevent Iraq from returning to the kind of tyranny that can breed terrorism.

But Larry Bland, the editor of General George Marshall's papers, said the primary purpose of the European reconstruction program was not a guarantee of safety or pure altruism but rather American and global economic needs.

"The primary emphasis of the Marshall Plan was on restimulating trade," said Bland, who has produced four volumes of the former secretary of state's papers for the Marshall Foundation.

"The countries of Europe ... had no money to buy anything from us, so trade was dead. The idea was to stimulate their economy so they could buy goods again," he said.

Some Republicans, like Senator John Warner of Virginia, chairman of the Armed Services Committee, said the comparison to the previous plan was apt, predicting that the reconstruction of Iraq would eventually pay for itself many times over.

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