War Tab Swamps Bush’s Estimate
Published on Sunday, May 9, 2004 by the San Francisco Chronicle
War Tab Swamps Bush’s Estimate
Spending Projection: $150 Billion by 2005
by James Sterngold
 

With troop commitments growing, the cost of the war in Iraq could top $150 billion through the next fiscal year — as much as three times what the White House had originally estimated. And, according to congressional researchers and outside budget experts, the war and continuing occupation could total $300 billion over the next decade, making this one of the costliest military campaigns in modern times.

As a measure of the Bush administration’s priorities in the war on terrorism, it has spent about $3 in Iraq for every $1 committed to homeland security, experts say.

That divide may be growing.

The Pentagon says its monthly costs for Operation Iraqi Freedom shot up from $2.7 billion in November to nearly $7 billion in January, the last month for which ithas provided figures. Since then, the number of troops has jumped by 20,000 to 135,000, and the bloody insurgency has grown.

Defense officials initially said the troop increases were temporary, but last week they changed course and said they planned to maintain the higher levels through 2005, along with increased numbers of tanks and other heavy military equipment. The tempo of military operations has increased sharply in response to a wave of lethal attacks, suggesting the costs still may be climbing.

Both Democratic and Republican lawmakers have started to express deep concern over the costs and the way in which the Bush administration is choosing to cover them.

They contend that the White House has been relying on budgeting stratagems to conceal the overall expense, at least until after the election in November. And lawmakers worry that Congress is going to be forced to do something the White House has said until now was not necessary: Chop away at other government programs to cover the costs of an occupation that has no end in sight.

“DOD (Department of Defense) is being more than customarily opaque with us, ” Rep. John Spratt of South Carolina, the senior Democrat on the House Budget Committee, said in an interview. “We’re trying to pool our efforts and share information and piece something together, which is the only way to figure out what it is really going to cost us. But this is basic information. This is not unorthodox to get these numbers. It’s not asking for somebody to rework the whole books. I think they are embarrassed by the level of the costs.”

By contrast, Operation Desert Storm, begun in 1991 after Saddam Hussein’s armies invaded Kuwait, cost about $84 billion, adjusted for inflation, according to the Center for Strategic and Budgetary Assessments, a nonpartisan Washington think tank. But because the United States was part of a broad coalition of wealthy countries, including Britain, France, Germany, Japan and Saudi Arabia, about 90 percent of those costs were paid for by America’s allies.

Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, said war costs will reach $100 billion by the end of the current fiscal year on Sept. 30 and could come to more than $150 billion by the end of fiscal 2005.

Rep. Curt Weldon, R-Pa., vice chairman of the House Armed Services Committee and a hawk on defense issues, said in an interview that his concern is that the administration has not been including the war’s costs in the Defense Department’s regular budget, but instead has been seeking special supplemental appropriations, which it has asked for as late as possible to delay the public release of financial information on the war.

Worse, he said, by providing funding so late, the administration has placed further stress on the military itself, which is having to scramble and transfer money from other accounts to temporarily cover some war costs.

“Somehow, they have come to think that it’s politically embarrassing that they need more money to pay for this war,” Weldon said of President Bush and his aides. “If they’re doing this for political purposes, I think it’s stupid. It’s shortsighted.”

Weldon said he is a staunch supporter of the war and the occupation, but he insisted that the White House’s approach of paying for the war by running budget deficits rather than slashing other programs — including those to modernize the military by making it more mobile — will have to end.

“You can’t do both at the same time,” Weldon said. “The administration doesn’t want to say that.”

Defense officials insist that they are following normal budgeting procedures and that routine military needs will be met.

“We do not budget for war,” said Lt. Col. Rose-Ann Lynch, a public affairs officer in the Pentagon, referring to the way the White House has requested funds through a series of supplemental budget requests, often at the last minute.

Last week, the White House unexpectedly announced another supplemental request for $25 billion to cover war costs through the end of the current fiscal year.

Kosiak said that without a doubt, the administration will need at least $50 billion to get through the next fiscal year.

In this fiscal year, the Defense Department’s regular budget totals about $401 billion, and the White House has requested $423 billion for fiscal 2005, which begins Oct. 1. All the costs of military operations in Iraq and Afghanistan are over and above those amounts.

Also, neither the regular defense budgets nor the supplemental budgets include the costs of reconstruction.

The United States has committed an additional $23 billion for rebuilding, which is likely to be paid out over a period of years. The Coalition Provisional Authority, as the U.S.-led occupation in Iraq is officially known, is another expense separate from the other budgets. It is costing nearly $900 million a year.

What worries some in Congress is that part of these costs have been covered by shifting funds among accounts, rather than the White House directly explaining the entire financial need and asking Congress for appropriations.

For instance, in his recent book, “Plan of Attack,” Bob Woodward writes that the Bush administration improperly diverted $700 million from a $40 billion emergency appropriation in the wake of the Sept. 11 attacks to pay for Iraq war preparations. Democrats have called for an investigation of this transfer. The White House has acknowledged using most of the funds for the war, but says it did so only after Congress passed resolutions supporting the invasion of Iraq.

Many lawmakers now say the administration is going to have to bite the bullet and make hard decisions about what programs will have to be cut to finance the war.

“What all this tells you is that you have questions that really haven’t been asked much until now,” Kosiak said. “If this really is about the war on terror, is this the best way to spend the money? Should more be spent on homeland security? There’s no real right way to look at it. It’s judgment calls.”

There are many mysteries about how the occupation is being managed and paid for, experts say. For instance, a recent report by the Congressional Research Service said it was not even clear who was responsible for the Coalition Provisional Authority.

“No explicit, unambiguous and authoritative statement has been provided that declares how the authority was established, under what authority, and by whom,” the report concluded.

In addition, the supplemental budgets that have paid for the war have given the Bush administration unusual flexibility in how it uses and accounts for the funds.

What all sides agree on now is that the costs of the war in Iraq, still only 15 months old, are approaching those of other major military campaigns in modern history.

The Korean War, which involved several years of all-out military campaigns, cost about $418 billion in inflation-adjusted Pentagon’s $401 billion budget excludes Iraq dollars, and the Vietnam War cost about $597 billion, according to the Center for Strategic and Budgetary Assessments.

In late 2002, months before the Iraq war started, the Bush administration rebuked its own chief economic adviser, Lawrence Lindsey, for publicly estimating that a war in Iraq might cost $100 billion to $200 billion. In December 2002, Mitch Daniels, then the director of the Office of Management and Budget, said the cost more likely would be $50 billion to $60 billion — which now looks like a fraction of the actual expenses.

The Pentagon says the war in Iraq cost $63 billion from its beginning in March 2003 through January 2004. That involves money actually spent, rather than costs incurred and payments to which it is committed, experts say. Kosiak said it also does not include ancillary costs, such as the buildup of bases in Kuwait and other areas in the region.

The Congressional Budget Office produced an analysis last year that estimated a continuing occupation of Iraq would cost somewhere between $85 billion and $200 billion over the next nine years, depending on how large an American force is needed and how long it remains.

The numbers shoot even higher if, as some have proposed, the military has to create new divisions to bolster its overstretched forces.

“In the near term, the absolute overriding concern has to be to bring this war and our efforts to fruition,” Spratt said. “But at some point, we’re going to have to look at the operating costs and think about taking money from elsewhere to pay for this. It’s a lot of money.”



CHART (1):


    THE COST OF WAR
    The Iraq war is proving to be far costlier than initial Bush 
administration estimates. Adjusting for inflation, the nonpartisan Center for 
Strategic and Budgetary Assessments estimated the cost of major U.S. wars of 
the previous half-century:

    Korean War, 1950-1953                     $418 billion
    Vietnam War, 1964-1975                    $597 billion
    Persian Gulf War*, 1990-1991               $84 billion
    War in Iraq
    (March 2003 projected to Sept. 30, 2004)  $100 billion
    (March 2003 projected to Sept. 30, 2005)  $150 billion
    *About 90 percent of these costs were paid by U.S. allies.


CHART (2): NATION'S COSTS FOR WAR AND SECURITY Since Sept. 11, 2001, appropriations for the wars in Iraq and Afghanistan, homeland security and other federal anti-terrorism programs have soared. Here is an estimate by the Center for Strategic and Budgetary Assessments for the extra costs associated with those programs: -- Response to and recovery from 9/11 terrorist attacks Military operations related to combating terrorism,including operations in Afghanistan and homeland security $83 billion Reconstruction and related aid to Afghanistan $3 billion Non-Defense Department homeland security and combating terrorism $65 billion Victim relief and recovery from 9/11 attacks $16 billion Subtotal $167 billion -- War in Iraq and aftermath Military operations (Defense Department) through fiscal 2004* $105 billion Subtotal $105 billion -- Other Reconstruction and related aid to Iraq $23 billion Foreign aid (primarily to states supporting U.S. operations in Afghanistan and Iraq) $7 billion Aviation industry relief $2 billion Other $1 billion Subtotal $33 billion -- General Department of Defense programs (activities unrelated to terrorism, homeland security or Iraq) $101 billion Subtotal $101 billion Total $407 billion * Center for Strategic and Budgetary Assessments estimate of projected additional costs for Iraq and Afghanistan, fiscal 2005: approximately $50 billion. Sources: Department of Defense, Office of Management and Budget, Congressional Research Service, Congressional Budget Office

©2004 San Francisco Chronicle

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