Report provides bleak outlook for Iraq

WASHINGTON - A highly classified National Intelligence Estimate assembled by some of the government's most senior analysts this summer provided a pessimistic assessment about the future security and stability of Iraq.

The National Intelligence Council looked at the political, economic and security situation in the war-torn country and determined - at best - the situation would be tenuous in terms of stability, a U.S. official said late Wednesday, speaking on the condition of anonymity.

At worst, the official said, were "trend lines that would point to a civil war."

The intelligence estimate, which was prepared for President Bush, considered the window of time between July and the end of 2005. It is the first formal assessment of Iraq since the October 2002 National Intelligence Estimate on the threat posed by fallen Iraqi President Saddam Hussein.

A review of that estimate released this summer by the Senate Intelligence Committee found widespread intelligence failures that led to faulty assumptions that Iraq had weapons of mass destruction.

Senate Republicans and Democrats on Wednesday denounced the Bush administration's slow progress in rebuilding Iraq, saying the risks of failure are great if it doesn't act with greater urgency.

"It's beyond pitiful, it's beyond embarrassing, it's now in the zone of dangerous," said Sen. Chuck Hagel, R-Neb., referring to figures showing only about 6 percent of the reconstruction money approved by Congress last year has been spent.

Foreign Relations Committee members vented their frustrations at a hearing where the State Department explained its request to divert $3.46 billion in reconstruction funds to security and economic development. The money was part of the $18.4 billion approved by Congress last year mostly for public works projects.

The request comes as heavy fighting continues between U.S.-led forces and a variety of Iraqi insurgents, endangering prospects for elections slated for January.

"We know that the provision of adequate security up front is requisite to rapid progress on all other fronts," said Deputy Assistant Secretary of State Ron Schlicher.

White House spokesman Scott McClellan said circumstances in Iraq have changed since last year. "It's important that you have some flexibility."

But Hagel said the shift in funds "does not add up in my opinion to a pretty picture, to a picture that shows that we're winning. But it does add up to this: an acknowledgment that we are in deep trouble."

Hagel, Committee Chairman Richard Lugar, R-Ind., and other committee members have long argued - even before the war - that administration plans for rebuilding Iraq were inadequate and based on overly optimistic assumptions that Americans would be greeted as liberators.

But the criticism from the panel's top Republicans had an extra sting coming less than seven weeks before the presidential election in which President Bush's handling of the war is a top issue.

"Our committee heard blindly optimistic people from the administration prior to the war and people outside the administration - what I call the 'dancing in the street crowd,' that we just simply will be greeted with open arms," Lugar said. "The nonsense of all of that is apparent. The lack of planning is apparent."

He said the need to shift the reconstruction funds was clear in July, but the administration was slow to make the request.

"This is an extraordinary, ineffective administrative procedure. It is exasperating from anybody looking at this from any vantage point," he said.

State Department officials stressed areas of progress in Iraq since the United States turned over political control of Iraq to an interim government on June 28. They cited advances in generating electricity, producing oil and creating jobs.

Schlicher said the department hopes to create more than 800,000 short- and long-term jobs over two years, saying, "When Iraqis have hope for the future and real opportunity, they will reject those who advocate violence."

Congress approved the $18.4 billion in November as part of an $87 billion package mostly for military operations in Iraq and Afghanistan. At the time, administration officials said the reconstruction money was just as important as the military funds. But only $1.14 billion had been spent as of Sept. 8.

"It's incompetence, from my perspective, looking at this," said the panel's top Democrat, Sen. Joseph Biden Jr. of Delaware.

In separate action Wednesday, the Senate A