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Originally published Sunday, March 1, 2009 at 12:00 AM

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Oil prices put squeeze on Iraq budget proposals

Iraq's parliament pushed back voting Saturday on this year's budget and could be forced to make further cuts because of falling oil prices...

The Associated Press

BAGHDAD — Iraq's parliament pushed back voting Saturday on this year's budget and could be forced to make further cuts because of falling oil prices.

The latest delay in trying to ratify the current $64 billion budget proposal highlights the financial squeeze facing Iraq as declining oil revenues cut into reconstruction plans such as new roads and improved utilities — which the Shiite-led government hopes to use as showcases in national elections later this year.

The pinch has also brought calls by Prime Minister Nouri al-Maliki for proposals to diversify Iraq's oil-dependent economy with expansion of agriculture and other trade. But Iraq's plans for this year have been dragged down along with the price of oil, which is now less than $45 a barrel after hitting highs last summer of $150 a barrel.

Army Lt. Gen. Frank Helmick, commander of Multinational Security Transition Command, said that the budget crisis would force Iraq to make some very difficult decisions about how to grow its security forces.

"They are many, many hard decisions that they are going to have to make," he said.

He said U.S. military advisers have been making recommendations to the Iraqi security officials on possible ways to deal with the shrunken budget.

Iraq's leaders have promised their security forces will be ready to take over full responsibility once the U.S. combat role formally ends in August 2010 under the timetable announced by President Obama.

In Tehran, Iran's supreme leader expressed concern that the U.S. was preparing for a "long stay" in Iraq despite a pact that calls for all American troops to leave the country by the end of 2011.

"Occupiers are making preparations for a continuing and long stay in Iraq," Iranian state television quoted Ayatollah Ali Khamenei as telling visiting Iraqi President Jalal Talabani. "This is a big danger."

At least 15 U.S. troops died in Iraq in February, including 12 who were killed in combat, according to an Associated Press tally. That compared with nine U.S. combat deaths in January.

A report from Iraq's Interior and Health ministries said 211 civilians were killed and 437 wounded last month — compared with 138 killed and 303 wounded in January. The figures were given by officials from the ministries who spoke on condition of anonymity because they were not authorized to release the information.

Copyright © 2009 The Seattle Times Company

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