U.S. to defer billions in Iraq rebuilding

The Bush administration will delay about $4 billion in Iraq reconstruction work until the U.S. cedes political control to an interim Iraqi government this summer, the Wall Street Journal said on Wednesday.

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The paper said the decision, struck at a White House meeting on Tuesday after almost a month of infighting, significantly cuts the amount of work to be handled by a Pentagon-run office in Baghdad created to manage most of the $18.6 billion set aside for Iraq reconstruction.

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But U.S. officials said they wanted to postpone some work until after the June 30 transfer of sovereignty, to help maintain leverage over the next Iraqi government, according to the Wall Street Journal.

The paper said there are also signs that the administration might become open to awarding contracts to companies from countries such as France, Germany and Russia, which are now barred from the process.