BUDGET DISPUTE DELAYS VOTE, COR ADJOURNS UNTIL

C O N F I D E N T I A L SECTION 01 OF 02 BAGHDAD 000290 SIPDIS SIPDIS E.O. 12958: DECL: 01/27/2017 TAGS: ECON EFIN PGOV IZ SUBJECT: BUDGET DISPUTE DELAYS VOTE, COR ADJOURNS UNTIL FEBRUARY 3 Classified By: Economic Minister-Counselor Daniel Weygandt for reasons 1.4 (b) and (d). ¶1. (C) Summary: In an unusual Saturday session at the CoR on January 27, a dispute over the 55.5 million USD 'social benefits' allocation of the Presidency Council derailed the discussion, resulting in a walk out of the Kurdish and Tawafuq CoR members. Negotiations were unable to immediately resolve the issue, and the CoR adjourned until February 3. Post contacts report that this allocation is the only remaining point of contention in the budget, and the dispute does not seem to be a proxy for an underlying issue. While the week-long adjournment was unexpected, it may be partially due to the Shi'a holiday Ashoura which falls on January 30. End summary. -------------- Dramatic Walk-Out, and then Adjournment -------------- ¶2. (U) The only substantive agenda item for the CoR's January 27 session was to vote on the 2007 budget. Finance Committee Chair Ayad al Samara'i (Tawafuq - IIP) began with a request for a vote on whether the Presidency Council allocation for 'social benefits' should stay as is. After a long discussion, a vote was held. The Kurds and Tawafuq voted for keeping the allocation, but the vote failed. Then a Kurdish CoR member requested a vote to adjourn the session so that the block leaders could resolve this issue. A vote was held, and the Kurds and Tawafuq, along with leading SCIRI CoR member Jalal al-Din Al-Saghir voted to delay the session, but the vote failed. Then the Kurds and Tawafuq stood up and left the session, resulting in a loss of quorum. The session was adjourned for one hour to continue negotiations. After two hours, Deputy Speaker Khalid Attiyah (UIC - Independent) adjourned the session until Saturday February 3. -------------- 'Social Benefits' -------------- ¶3. (C) The 'social benefits' allocation is understood as funding for grants, scholarships, gifts and other payments to constituents as deemed appropriate - there are very few restrictions on this allocation. The 55.5 million USD 'social benefits' allocation for the Presidency Council is high, but not unusual. The Prime Minister (PM) and the Secretariat of the Council of Ministers (CoM) have 'social SIPDIS benefits' allocations as well, $23.7 million and $14.3 million respectively. Compared to 2006 the Presidency Council's allocation for 'social benefits' has increased by a lower rate (32.5%) than that of the PM (1085%) and the Secretariat of the CoM (43%). At the CoR the argument broke SIPDIS down clearly on sectarian and party lines; the Kurds and Tawafuq each have representatives in the Presidency Council, and they supported the allocation. CoR member Ridha Jawad Taqi (SCIRI - UIC) told Econoff that SCIRI (which also has a member in the Presidency Council) supported 'moving forward on the budget, even if there are problems'. Taqi said that the Fadhila party, Da'wa party, and some Sadrists wanted to decrease the Presidency Council allocation, but keep the 'social benefits' allocations for the PM and CoM Secretariat the same. Nonetheless, SCIRI members did not vote with the Kurds and Tawafuq to keep the allocation during the session. This issues appears to be the only outstanding point of contention; Rowsh Shaways (KAL - KDP),who is close to the Kurdish leadership, told poloff on January 26 that the security and defense portion of the budget had been resolved and there were no other major issues impeding passage. -------------- The Role of the Speaker -------------- ¶4. (C) A dispute over 55.5 million dollars should not derail the passing of a 41 billion dollar budget. The only substantive portion of the short agenda for the CoR on January 27 was to vote on the budget, and most CoR members expected the budget to pass that day. Minister of Finance Bayan Jabr joined the January 27 session mid-way through, presumably in expectation that the budget would pass. Speaker Mahmoud al-Mashhadani (National Dialogue - Tawafuq) did not manage the session effectively, allowing the discussion to become first unproductive, and then divisive, as different alternatives to the 55.5 million USD allocation were raised. Deputy Speaker Khalid Attiyah was unfortunately out of the room for most of the discussion; he is both better at managing the CoR debates and votes and had stated his interest in getting the budget passed. -------------- BAGHDAD 00000290 002 OF 002 Comment -------------- ¶5. (C) The week-long adjournment indicates a need for more negotiations between the different parties, but is also partially due to the Shi'a holiday Ashoura on January 30. The issue of the 'social benefits' allocation should be resolvable, and it represents a small part of the 41 billion dollar budget. The Kurds attended the budget discussion on January 27, which indicates that they thought the issue could be resolved within the session. This dispute does not seem to be a proxy for an underlying issue; instead, it indicates that some CoR members do not feel a sense of urgency about passing the budget. KHALILZAD