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Cost of Iraq war, like fog, is illusive

Author: Michael Moran
January 7, 2007


In the months leading up to the Iraq War, a spirited debate about its potential cost raged among academics and policy groups, and within the Bush administration. In late 2002, as planning for the invasion climaxed, Lawrence Lindsay, a White House economic adviser, put the cost at between $100 and $200 billion.

This led to calls for his head from many on the right, and an embarrassing public rebuke from the man who is supposed to be the Bush administration’s final authority on the matter, Office of Management and Budget Director Mitch Daniels, who called $200 billion “the outer edge of speculation,” and suggested that a more realistic price tag would be $50-$60 billion. Soon afterward, Lindsay was fired.

To say Lindsay has been vindicated by time would be somewhat inaccurate, however. By September of 2006, the Congressional Budget Office estimated over $300 billion had been appropriated for the war, and it predicted the cost would rise as high as a trillion dollars by the end of the decade if, as Defense Department budget planners say, a sizable U.S. force remains in the country until 2010.

That means even Yale economist William Nordhaus, whom the war’s supporters wanted to crucify back in June 2003 for suggesting America would spend $500-$600 billion over a decade, may turn out looking like a wild-eyed optimist.

Over the next month, as Democrats settle into their new roles as committee chairmen in Congress, the Defense Department plans to ask for an additional $97 billion to cover war costs through June of this year—and that is on top of a $70 billion supplemental bill approved in mid-2006, and a “baseline” defense budget of $462 billion. It brings total spending for this year to more than $632 billion, a record in anyone’s book.

Most of these “emergency” spending measures consist of funds for the Army and Marine Corps, bearing the brunt of the fighting, whose equipment, logistical systems and people now are stretched to the breaking point. Yet, predictably, the “supplementals” also are larded with programs that have little to do with the “emergency” in Iraq or Afghanistan—$62 million for ballistic missiles, for instance, and $3.9 billion for the next- generation F-35 fighter, which won’t join active service for years. The Air Force even wants $1.2 billion for something it calls “pure research.”

“Pure baloney,” says Stephen Biddle, senior defense policy fellow at the Council on Foreign Relations. “It’s disingenuous of the administration to claim we have no idea what Iraq needs will be and so we can’t budget for them. It could and should be handled through normal channels, but the services have come to view the supplementals as bulletproof and so they’re dumping all sorts of things into them that hardly qualify as emergencies.”

You may be thinking, “So what? This is a war.” But the costs of handling defense spending this way are beginning to be felt, and beginning to pose difficult questions involving the deficit, the military’s ability to modernize its forces, and the federal government’s ability to spend money on virtually anything other than war, interest on the national debt and the handful of entitlement programs known as “mandatory spending”—Social Security, Medicare/Medicaid, food stamps, student loans, etc.

Non-military “discretionary spending” came to 19 percent of the 2007 budget, more than all other discretionary programs combined, and that calculation does not include the huge supplemental infusions.

Alarmed at this growth, both Democrats and Republicans in Congress have expressed dismay at the increasing size and frequency of the supplemental requests. Sen. John McCain, the Arizona Republican, added a provision to the fiscal year 2007 defense authorization act compelling the administration to put future such requests through normal channels. However, President Bush flatly refused to abide by it, in effect calling McCain’s bluff.

The record supplemental spending request expected later this month from the Department of Defense will be seen by some in Congress as a direct challenge to their authority. Indeed, since win ning control of Congress in November, Democrats, too, have pledged to make these funds subject to scrutiny of the normal budget process—hearings and oversight by defense committees in the House and Senate. Last month, the bipartisan Iraq Study Group noted: “The war is in the fourth year and the regular budget process should not be circumvented. Funding requests for the war in Iraq should be presented clearly to Congress and the American people.”

But many experts remain deeply skeptical that Congress has the will to seriously scrutinize military spending with two wars rag ing. “I would be surprised to see more than a slowdown in spending for some of the larger programs,” says James McAleese, whose Virginia law firm represents military contractors. “Congressionally, the Senate really hasn’t changed too much, and like the House, the Democratic chairmen of the key committees are the same senior guys who were the ranking members during the Republican Congress. They may slow down the pace of programs not already underway, but I doubt you’ll see major cancellations.”

That is not to say there won’t be changes. Experts believe new Defense Secretary Robert Gates will likely concentrate on Iraqpolicy rather than long-term procurement and force structure issues. In the meanwhile, three of the key Democratic committee leaders—Sen. Carl Levin (D-Mich.), who will head the Senate Armed Services Committee, Rep. Ike Skelton (D- Mo.), chair of that committee in the House, and John Murtha (D- Pa.), who will chair the House defense appropriations subcommittee, all say they want to increase the size of the active-duty Army and Marine Corps—an argument which echoes concerns from many before the Iraq War that too few troops had been committed to stabilize the country after Baghdad fell.

McAleese, whose views are respected on Wall Street and among defense contractors, expects to see congressional moves to make permanent the “temporary” increase in the size of the Army that Congress authorized after 9/11, when it went from 482,000 to 512,000 strong. But that, too, has budget implications.

“In effect, it would restore an 11th Army division on a permanent basis, and there are suggestions the Army would then want to grow by an additional 6,000 to 7,000 annually in the active component for the foreseeable future,” says McAleese. “That’s two additional brigade combat teams whose training, equipment, salaries, etc., can no longer be sequestered from the baseline defense budget. The Army’s ability to procure modernized weapons under this plan would be in serious question.”

Whatever happens with regard to supplemental spending proposals, the battle lines over future military priorities grow clearer by the day. The basic doctrinal debate raging since 9/11 pits the high-tech, capital-intensive Air Force and Navy, along with their political al lies in Special Operations Forces, against the labor-intensive Army and Marine Corps. Former Defense Secretary Donald Rumsfeld’s vision of “transformation” sat squarely in the former camp.

“The Rumsfeldian ‘Toys R Us’ version of future warfare has in mind future adversaries like China or possibly North Korea, while the Army and Marines see the future in counterinsurgency, irregular warfare, and a larger, much lower-tech military willing to get its hands dirty,” says Biddle. Realities on the ground in Iraq andAfghanistan caused a major revision—some say, a defeat—of the high-tech philosophy, epitomized by Rumsfeld’s eventual resignation. But Biddle believes that, whatever the outcome in Iraq, the debate will come back even more fiercely afterward.

“One of the major post-Iraq schools of thought is going to be that the ‘Afghan model’ should be the primary vehicle for use of force. SOF (Special Operations Forces) plays a central role in that model, where the ‘never again’ debate dovetails with the high-tech crowd,” says Biddle. “That makes it very hard for the Army. If there’s any headline you could write yearly since 1945 in Washington, it’s ‘Army Loses Budget Battle Again to the Air Force’.”

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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