The Russian Central Bank's move ties in with increasing signs that Middle Eastern oil exporters are also looking to diversify their reserves out of the dollar. "This is a bearish development for the dollar," Chris Turner, head of currency research at ING Financial Markets, told the British Financial Times. "It reminds us that global surpluses are accumulating to the oil exporters,and Russia is telling us that an increasingly lower proportion of these reserves will be held in dollars. This suggests there is a trend shift away from the dollar."

Clyde Wardle, senior Emerging Market Currency strategist at HSBC, told the paper: "We have heard talk that Middle Eastern countries are doing a similar thing and even some Asian countries have indicated their desire to do so."

Moscow's move was unsurprising. Russia's $71.5billion Stabilization fund, which accumulates windfall oil revenues, is due to be converted from rubles to 45 percent dollars, 45 percent euros and 10 percent sterling. The day-to-day movements of the ruble are monitored against a basket of 0.6 dollars and 0.4 euros. About 39 percent of Russia's goods imports came from the eurozone in 2005, against just 4 percent from the US.

The statement plays into a perception that central banks, which together hold $4.25 trillion of reserves, are increasingly channeling fresh reserves away from the dollar to reduce potential losses if the dollar was to fall sharply.

House lawmakers sliced about $4 billion from the president's spending request for the Pentagon because of what they said were other priorities within the budget and a soaring federal deficit.

"We did the best we could with the money we had to work with," said Rep. John Murtha of Pennsylvania, the top Democrat on the subcommittee. He provided some details of the bill after the panel approved it in a session that was closed to the public.

Overall, Murtha said, the subcommittee went to great lengths to support the National Guard. The bill, he said, provides $500 million for the Guard to replace equipment tattered in war zones. And it states that the Pentagon plan to drop the number of Guard combat brigades from 34 to 28 is unacceptable, he said.

House lawmakers consider the $50 billion for Iraq and Afghanistan the first installment of what they expect will be continued war costs through 2007, although no one would predict how much more money would be needed.

If approved, the House bill would push total war-related dollars since 2001 toward a staggering half-trillion dollars.

The Congressional Research Service, a nonpartisan agency that writes reports for lawmakers, says that since the Sept. 11, 2001, terrorist attacks, lawmakers already have provided $368 billion for military operations in Iraq and Afghanistan and other costs associated with the war on terrorism.

Additionally, a bill making its way through Congress now to pay for the rest of this year's war costs includes another $65.7 billion for the Pentagon, much of which will be used to pay for military operations, maintenance and personnel costs in the two war zones.

Lawmakers say the Pentagon is spending about $8 billion a month in Iraq and $1 billion a month in Afghanistan.

When word of the missing money first surfaced in 2004, Congress passed legislation creating an office of Special Inspector General, assuming that this new agency would root out the problem and figure why all that taxpayer money had disappeared, and why only minimal reconstruction was going on in destroyed Iraq, instead of a massive rebuilding program as intended.

The new inspector general, an affable attorney named Stuart Bowen, went to work and came up with a report in early 2006 that sounded scathing enough. Bowen found cases of double billing by contractors, of payments for work that was never done, and other scandals. But he never came up with more than $1 billion or so worth of problems.

Now we know why.

It turns out that Bowen was never really looking very hard.

When the Boston Globe, this past April, broke the story that President Bush has been quietly setting aside over 750 acts passed by Congress, claiming he has the authority as "unitary executive" and as commander in chief to ignore such laws, it turned out that one of the laws the president chose to ignore was the one establishing the special inspector general post for Iraq. What the president did was write a so-called "signing statement" on the side (unpublicized of course), saying that the new inspector general would have no authority to investigate any contracts or corruption issues involving the Pentagon.

Well, since most of the missing money has been going to the military in Iraq, that pretty much meant nothing of consequence would be discovered by the inspector general.

You might think that the inspector general himself would have complained about such a restriction on his authority to do the job that Congress had intended, but Bush took care of that. In his role as Chief Executive, he appointed Bowen to the post, a man who has a long history of working as a loyal manservant to the president. Bowen was a deputy general counsel for Governor Bush (meaning he was an assistant to the ever solicitous solicitor Alberto Gonzales). He did yeoman service to Bush as a member of the term that handled the famous vote count atrocity in Florida in the November 2000 election, and then worked under Gonzales again in the White House during Bush's first term, before returning briefly to private practice.

Bowen simply never mentioned to anyone that, courtesy of a secretive and unconstitutional order from the president, he was not doing the job that Congress had intended.

The deception was far-reaching. When Thomas Gimble, the acting inspector general of the Pentagon, was asked in 2005 during a congressional hearing by Christopher Shays (R-CT), chair of the House government reform subcommittee, why the Pentagon had no audit team in Iraq to look for fraud, Gimble facilely replied that such a team was "not needed" because Congress had set up the special inspector general unit to do that. He didn't mention that the president had barred the special inspector general from investigating Pentagon scandals.

This would all be pretty funny except for two things.

First of all, Americans and Iraqis are dying in droves because of the chaos that the U.S. invasion and occupation have created in Iraq-a problem that that $9 billion in missing Congressionally-allocated funds, and the bales of US dollars, were supposed to have solved.

Second, and I admit this is pretty speculative on my part, money being like water, it tends to flow to the lowest level, which, from a moral and ethical standpoint, would be the Bush/Cheney administration and the Republican Party machine that put them, and the do-nothing Congress that covers up for them, into office.

My guess is that a fair piece of those many billions of dollars is sloshing around back in the U.S. paying for things like Republican Party electoral dirty tricks, vote theft, bribing of Democratic members of Congress, and god knows what else.

If this seems far-fetched to anyone, remember that this administration has included a number of people who were linked to the Reagan-era Iran-Contra scandal, when the creative-and criminal-idea was conceived of secretly selling Pentagon stocks of shoulder-fired Stinger anti-aircraft missiles to Iran, and using the proceeds to secretly fund the U.S.-trained and organized Contra fighters who were fighting to topple the Sandinista government in Nicaragua (Congress had inconveniently banned any U.S. aid to the Contras).

It seems to me inconceivable that this corrupt and obsessively power-mad administration would have passed up an opportunity to get its hands on some of the easy money flowing into Iraq over the course of the last three years.

Given all this, it seems almost unfathomable that Democratic Party leaders would be insisting, as have Rep. Nancy Pelosi (R-CA) and Sen. Harry Reid (D-NV), Democratic leaders of the House and Senate, that there would be no impeachment hearings in Congress if Democrats were to succeed in winning back Congress this November.

What better way to follow that money than an impeachment hearing into why the president unconstitutionally subverted the intent of Congress in establishing an office of special inspector general for corruption in Iraq?

Dave Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His new book of CounterPunch columns titled "This Can't be Happening!" is published by Common Courage Press. Lindorff's new book is "The Case for Impeachment", co-authored by Barbara Olshansky.

The documents amount to 100 pages, according to Judicial Watch.

Three years ago Judicial Watch obtained and released an e-mail between the Army Corps of Engineers and another party that referenced the fact that the deal -- awarded in secret, without any competition, two weeks before the invasion of Iraq -- had been coordinated with the vice president's office.

The Army fought Judicial Watch's FOIA lawsuit, but failed to provide enough information to the court for it to make its decision. Therefore, the judge had to review the documents in person to determine whether they were exempt from FOIA requirements. Urbina was not happy.

"The court undertook an onerous in camera review of the defendant's documents in large part because of the defendant's failure to provide an accurate Vaughn index" listing the contents and relevance of each document.

Instead of just aiming to cut the deficit in half, the IMF said the administration should be seeking to bring the budget into balance, excluding the income received by
Social Security.

That would be a significantly harder job since the government is using around $200 billion in surplus Social Security revenues being collected annually to fund other government programs and lower the overall budget deficit.

"With revenues continuing to be buoyant, we would again propose a target of balancing the budget excluding the Social Security surplus over the next five years," the IMF wrote.

The administration's goal is to reduce the deficit to about $260 billion in 2009, which would be half of the $519 billion deficit the administration originally estimated for 2004. The actual deficit for 2004 came in at $413 billion, still a record in dollar terms.

Recently, Treasury Secretary John Snow said the administration will be able to meet its goal of cutting the deficit in half earlier than 2009 based on a flood of government tax receipts from an improving economy.

The Congressional Budget Office is forecasting that the deficit for the current year could be as low as $300 billion.

The IMF also said the administration should consider tax increases to meet a more ambitious goal of eliminating the deficit by 2011. It suggested considering a national sales tax, a value added tax like ones in place in Europe or increased taxes on energy products.

Brookly McLaughlin, a Treasury Department spokeswoman, said the administration did not plan on following the IMF recommendations on deficit goals or taxes.

"Our deficit reduction target is ambitious and we are exceeding the pace we set to meet the president's target of cutting the deficit in half by 2009," she said.

"Maybe it is fashionable in some circles to look down on Middle America, to say they don't get the complexities of the world and they don't have the benefit of continental education and they are deficient in so many ways," Mr Bolton added. "It is illegitimate for an international civil servant to criticise what he thinks are the inadequacies of citizens of a member government."

The tough-talking US envoy reiterated that the dispute could harm important reforms to the international body. He also hinted that the US Congress, which controls American government spending, might reconsider US funding to the UN, which accounts for 22 per cent of the organisation's annual budget. "Congress has the power of the purse and they feel quite strongly on a bipartisan basis that America has a right to know how their tax dollars are being spent, even people from Middle America," he said, with a note of sarcasm. "I don't think we have seen the end of it." Before Mr Bolton arrived in London, Kofi Annan, the UN chief, tried to play down the controversy. "I think the message that was intended is that the US needs the UN, and the UN needs the US, and we need to support each other," Mr Annan said. "I think the speech by my deputy should be read in the right spirit and let's put it behind us and move on."

The public spat between Mr Malloch Brown and Mr Bolton represents more than just a clash of outsized personalities. It reflects the long-running battle of ideas over the role of international institutions. Mr Bolton, a Republican right-winger, has been a leading conservative critic of the UN since serving as the Assistant Secretary of State for International Organisations in the Administration of the first President Bush.

Mr Malloch Brown, a former journalist who founded The Economist Development Report and went on to work at a political consultancy before joining the UN system, is a member of a powerful network of internationalists. Their clash threatens to undermine congressional support for the world body as it confronts a looming budget crisis, caused by Washington's insistence that management reforms be put in place.

The row was sparked by a speech by Mr Malloch Brown on Tuesday. Addressing prominent Democrats in New York, he criticised Washington for allowing "too much unchecked UN-bashing and stereotyping". He singled out the conservative talk-show host Rush Limbaugh and the Fox News cable channel, owned by News Corp, the parent company of The Times.

"The prevailing practice of seeking to use the UN almost by stealth as a diplomatic tool while failing to stand up for it against its domestic critics is simply not sustainable," Mr Malloch Brown said. "You will lose the UN one way or another," he added.

America has a long tradition of isolationism, dating back to even before the US refused to join the League of Nations. The UN has been portrayed by far-right groups as a godless, communist and corrupt "nest of spies" ready to invade America.

Relations began to improve during the presidency of the elder George Bush, a former American Ambassador to the UN. The current crisis stems from the split over the war in Iraq, when the 15-nation UN Security Council refused to give explicit approval for the military action, and Kofi Annan, the UN Secretary-General, dubbed the invasion "illegal". The invasion yielded evidence that UN officials or their families had benefited from the Oil-for-Food programme, which was designed to feed Iraqis during UN sanctions.

Mr Annan, under fire from Republicans, began a UN reform drive and sought advice from his American friends, predominantly Democrats. After a secret meeting at the home of the Clinton Administration's UN Ambassador, Richard Holbrooke, Mr Annan named Mr Malloch Brown as his chief of staff in January last year.

The appointment raised eyebrows when it was reported that Mr Malloch Brown was renting a house on George Soros's estate for $2,500 a month less than the previous occupant. Even before Mr Bolton was named US Ambassador, he seemed destined to clash with Mr Malloch Brown. Mr Soros, Mr Malloch Brown's landlord and old friend, helped to fund the Stop Bolton campaign, aimed at stopping him from getting the post.

Mr Malloch Brown has been criticised by dissident UN staff for aligning the world body too closely with Democrats in US domestic politics. They accuse him of allowing a UN staffer, Justin Leites, to play a leading role in the 2004 presidential campaign of John Kerry, violating staff rules. It is a charge that he denies. "I don't consider myself aligned with any American political establishment," he said. "I am British. I have worked in the UN and in international jobs all of my life."

Ed Luck, a Columbia University professor and author of Mixed Messages: American Politics and International Organization: 1919-1999, said it was rare for a top UN official to criticise the US so explicitly, but not unprecedented.

BOLTON'S WIT

ON NEGOTIATING
"I don't do carrots."

ON THE UN
"It's a target-rich environment."

ON REVAMPING THE UN
"Reform is not a one-night stand."

ON UN HUMAN RIGHTS COUNCIL
"We want a butterfly. We're not going to put lipstick on a caterpillar and declare it a success."

ON THE NEXT UN SECRETARY-GENERAL
"A proletarian."

ON THE WORLD ORGANISATION
"There is no such thing as the United Nations."

ON THE UN BUREAUCRACY
"If the UN Secretariat building in New York lost ten storeys, it wouldn't make a bit of difference."

At the center of the debate is the most important public policy you've probably never heard of: "network neutrality." Net neutrality means simply that all like Internet content must be treated alike and move at the same speed over the network. The owners of the Internet's wires cannot discriminate. This is the simple but brilliant "end-to-end" design of the Internet that has made it such a powerful force for economic and social good: All of the intelligence and control is held by producers and users, not the networks that connect them.

The protections that guaranteed network neutrality have been law since the birth of the Internet -- right up until last year, when the Federal Communications Commission eliminated the rules that kept cable and phone companies from discriminating against content providers. This triggered a wave of announcements from phone company chief executives that they plan to do exactly that.

Now Congress faces a legislative decision. Will we reinstate net neutrality and keep the Internet free? Or will we let it die at the hands of network owners itching to become content gatekeepers? The implications of permanently losing network neutrality could not be more serious. The current legislation, backed by companies such as AT&T, Verizon and Comcast, would allow the firms to create different tiers of online service. They would be able to sell access to the express lane to deep-pocketed corporations and relegate everyone else to the digital equivalent of a winding dirt road. Worse still, these gatekeepers would determine who gets premium treatment and who doesn't.

Their idea is to stand between the content provider and the consumer, demanding a toll to guarantee quality delivery. It's what Timothy Wu, an Internet policy expert at Columbia University, calls "the Tony Soprano business model": By extorting protection money from every Web site -- from the smallest blogger to Google -- network owners would earn huge profits. Meanwhile, they could slow or even block the Web sites and services of their competitors or those who refuse to pay up. They'd like Congress to "trust them" to behave.

Without net neutrality, the Internet would start to look like cable TV. A handful of massive companies would control access and distribution of content, deciding what you get to see and how much it costs. Major industries such as health care, finance, retailing and gambling would face huge tariffs for fast, secure Internet use -- all subject to discriminatory and exclusive dealmaking with telephone and cable giants.

We would lose the opportunity to vastly expand access and distribution of independent news and community information through broadband television. More than 60 percent of Web content is created by regular people, not corporations. How will this innovation and production thrive if creators must seek permission from a cartel of network owners?

The smell of windfall profits is in the air in Washington. The phone companies are pulling out all the stops to legislate themselves monopoly power. They're spending tens of millions of dollars on inside-the-Beltway print, radio and TV ads; high-priced lobbyists; coin-operated think tanks; and sham "Astroturf" groups -- fake grass-roots operations with such Orwellian names as Hands Off the Internet and NetCompetition.org.

They're opposed by a real grass-roots coalition of more than 700 groups, 5,000 bloggers and 750,000 individual Americans who have rallied in support of net neutrality at http://www.savetheinternet.com/ . The coalition is left and right, commercial and noncommercial, public and private. Supporters include the Christian Coalition of America, MoveOn.org, National Religious Broadcasters, the Service Employees International Union, the American Library Association, AARP and nearly every consumer group. It includes the founders of the Internet, the brand names of Silicon Valley, and a bloc of retailers, innovators and entrepreneurs. Coalitions of such breadth, depth and purpose are rare in contemporary politics.

Most of the great innovators in the history of the Internet started out in their garages with great ideas and little capital. This is no accident. Network neutrality protections minimized control by the network owners, maximized competition and invited outsiders in to innovate. Net neutrality guaranteed a free and competitive market for Internet content. The benefits are extraordinary and undeniable.

Congress is deciding on the fate of the Internet. The question before it is simple: Should the Internet be handed over to the handful of cable and telephone companies that control online access for 98 percent of the broadband market? Only a Congress besieged by high-priced telecom lobbyists and stuffed with campaign contributions could possibly even consider such an absurd act.

People are waking up to what's at stake, and their voices are growing louder by the day. As millions of citizens learn the facts, the message to Congress is clear: Save the Internet.

Lawrence Lessig is a law professor at Stanford University and founder of the Center for Internet and Society. Robert W. McChesney is a communications professor at the University of Illinois at Urbana-Champaign and co-founder of the media reform group Free Press.