Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, March 25, 1991                   TAG: 9103250126
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: By San Francisco Chronicle
DATELINE: WASHINGTON                                LENGTH: Medium

U.S. COULD TURN $12 BILLION PROFIT ON WAR/

Based on the most recent estimates, the Pentagon and Congress have settled on $42.6 billion as the cost of the Desert Shield buildup, the Desert Storm war and the postwar mop-up.

But three gulf states, along with Japan, Germany and South Korea, have pledged $54.5 billion in contributions to the United States for its military efforts.

Thus, there will be a $12 billion surplus if all countries contribute as much as they have pledged, and if the U.S. cost estimates are not altered.

Bills passed by the House and Senate last week created a separate Gulf War account for the contributions from foreign countries. The United States can draw on this account to cover its war expenses. If other countries' contributions do not cover all U.S. expenses, the legislation appropriates up to $15 billion of U.S. money to pay for the war.

So far, other countries have contributed $26.8 billion - $22.7 billion in cash and $4.1 billion in "in-kind" transfers, including weapons, vehicles and fuel. If the other countries never pay another dime, the $15 billion appropriation would virtually cover the cost of the war. Any money received from now on will reduce the amount the U.S. pays, and could lead to a surplus.

Sen. Robert Byrd, D-W.Va., has lambasted the allies for not paying up fast enough, even though final payments are not scheduled until March 31.

"We're sending out a late notice before the bill is due," said Joshua Muravchik, a scholar at the American Enterprise Institute.

Muravchik said this attitude could negate the good will that the United States gained in Germany, Japan and the allied Arab states during the war.

The war cost is the estimated amount needed to replace the bombs and other materiel expended, and to pay for transporting, feeding and caring for the troops.

Germany is dispatching its finance minister to Washington today to check the books. Its Social Democrats want to renegotiate Germany's $6.6 billion commitment because the war was shorter than expected. Germany has already paid $4.7 billion.

When Japan committed $13 billion to the gulf allies, including $11 billion to the United States, last August, the commitment was made at the yen's current rate. But the yen has risen in value, so Japan's contribution may be less.

Japanese Foreign Minister Taro Nakayama delivered $5.7 billion Friday.