Since 2001, Congress has appropriated about $640 billion for the global war on terrorism, the majority of this for operations in Iraq. In Jan. 2007, the Pres. announced ¿The New Way Forward¿ to stem violence in Iraq and enable the Iraqi gov¿t. to foster national reconciliation. This new strategy established goals and objectives to achieve over 12 to 18 months, or by July 2008. This report discusses progress in meeting key goals in ¿The New Way Forward¿: (1) improve security conditions; (2) develop capable Iraqi security forces and help the Iraqi gov¿t.; (3) enact key legislation; (4) spend capital budgets; and (5) provide essential services. Also discusses U.S. strategies for Iraq. Includes recommendations. Charts and tables.

In Jan. 2007, the Pres. announced a new U.S. strategy to stem the violence in Iraq and help the Iraqi gov¿t. foster conditions for national reconciliation. In ¿The New Way Forward,¿ the Admin. articulated near-term goals to achieve over a 12- to 18-month period and reasserted the end state for Iraq: a unified, democratic, federal Iraq that can govern, defend, and sustain itself and is an ally in the war on terror. To support this strategy, the U.S. increased its military presence and financial commitments for Iraq operations. This testimony discusses: (1) progress in meeting key security, legislative, and economic goals of ¿The New Way Forward¿; and (2) past and current U.S. strategies for Iraq and the need for an updated strategy. Illus.

Since 2001, Congress has appropriated about $640 billion for the global war on terrorism, the majority of it for operations in Iraq. In January 2007, the President announced "The New Way Forward" to stem violence in Iraq and enable the Iraqi government to foster national reconciliation. This new strategy established goals and objectives to be achieved over 12 to 18 months, or by July 2008. GAO discusses progress in meeting the following key goals of "The New Way Forward": (1) improve security conditions; (2) develop capable Iraqi security forces; and (3) help the Iraqi government enact key legislation, spend capital budgets, and provide essential services. GAO also discusses U.S. strategies for Iraq. GAO reviewed documents and interviewed officials from U.S. agencies, the United Nations, and the Iraqi government. GAO also had staff stationed in Baghdad. Since May 2003, GAO has issued over 130 Iraq-related audits which have provided baseline information for this assessment. GAO prepared this report under the Comptroller General's authority. GAO recommends that the Departments of Defense and State, in conjunction with relevant U.S. agencies, develop an updated strategy for Iraq that defines U.S. goals and objectives after July 2008, and addresses the long-term goal of achieving an Iraq that can govern, defend, and sustain itself.

Public Law 110-28 requires a report to Congress by Sept. 1, 2007, on whether or not the gov¿t. of Iraq has met 18 benchmarks contained in the Act, & the status of the achievement of these benchmarks. The benchmarks stem from commitments first articulated by the Iraqi gov¿t. in June 2006. In comparison, the Act requires the admin. to report in July & Sept. 2007 on whether satisfactory progress is being made toward meeting the benchmarks, not whether the benchmarks have been met. The author reviewed gov¿t. documents & interviewed officials from U.S. agencies, the U.N.; & the gov¿t. of Iraq. He also made multiple visits to Iraq during 2006 & 2007. This analyses was enhanced by 100 Iraq-related audits that have been completed since May `03.

Iraq has an estimated 115 billion barrels of crude oil reserves, the third largest in the world. Oil export revenues are critical to Iraq¿s reconstruction, accounting for over 90% of the Iraqi government¿s revenues. In June 2008, the author reported low 2007 spending rates by the Iraqi gov¿t. for some critical sectors in the face of declining U.S. investments in these sectors. This report examines: (1) Iraq¿s estimated revenues from 2005 through 2008; (2) Iraq¿s estimated expenditures from 2005 through 2008; (3) Iraq¿s financial deposits through 2007 and budget surpluses; (4) U.S. cumulative expenditures on stabilization and reconstruction activities in Iraq since 2003; and (5) factors affecting Iraq¿s efforts to accelerate spending. Charts and tables.