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US war costs continue to shoot up Print

greenback By David Isenberg - Aug 1st 2006

The US military budget has been steadily growing since 2001, sometimes by leaps and bounds. Yet Pentagon officials and most members of Congress say it needs yet more. Why is that?
It is true government figures always understate costs.

The Pentagon budget is no exception. Congress in December passed a US$453 billion defense appropriations bill for fiscal year 2006. In fact, the total amount to be spent for the Department of Defense in 2006 is $13 billion to $63 billion more, the latter figure assuming full funding for the wars in Iraq and Afghanistan. If you also count non-DoD "national defense" costs, add another $21 billion, and if you count defense-related security costs, such as homeland security, the release numbers are low by more than $200 billion.

The 2007 budget request of $439 billion marks an increase of about 27% in real terms since September 11, 2001, according to

one analysis. This figure does not include $21.8 billion for Energy Department spending on nuclear-weapons activities. Nor does it include spending on the wars the United States is actually fighting. When these costs are added in, military spending for the coming year will be more than $600 billion - a figure that would exceed both the heights of the late president Ronald Reagan's military buildup and the Vietnam War, in inflation-adjusted terms.

Of course, Congress pretends to be more of a budget hawk than it is by means of accounting sleight of hand. For example, according to a tutorial by Winslow Wheeler, former congressional military-budget analyst and now director of the Straus Military Reform Project at the liberal Washington, DC-based Center for Defense Information:

    In the last few years, the annual defense appropriation bill has been supplemented by an additional Title IX, often called "additional appropriations". This year, it amounted to $50 billion, none of it requested by the president. Its declared purpose is to pay for ongoing military operations in Iraq and Afghanistan.

    This money has a unique characteristic. It is "emergency" spending, which has had a specific legislative meaning since a 1991 budget agreement between Congress and then-president George H W Bush. "Emergency" spending is appropriations that do not count in the "spending caps" Congress imposes on itself for appropriations. For example, the 2006 congressional budget resolution imposed a "cap" on the DoD appropriation bill at $402.3 billion. The $452.8 billion Congress appropriated for that bill was, of course, way over that limit. However, $50 billion for Iraq and Afghanistan in Title IX and $5.9 billion in Hurricane Katrina and avian-flu expenses in other parts of the bill were all exempted from being "scored" to the cost of the bill because they are designated as "emergency". Thus the $452.8 billion bill fits under the $402.3 billion "cap" with room to spare.

    More to the point, the "emergency" [budget restraint exempt] characteristic of such Title IXs provide Congress, and its budget gamers, an incentive. If Congress can find a pretext to move programs from the regular part of the bill, where the spending counts, to Title IX, where the money does not count, then Congress can advertise itself as saving money. That is precisely what is going on.

In addition, the White House has chosen to fund the wars in Afghanistan and Iraq through supplemental appropriations and not through the regular budget.

    When America invaded Iraq in March 2003, Congress had not yet appropriated a single penny of the costs of that military operation. Instead, Congress waited for President George Bush to submit a request for "supplemental" appropriations. That first request for fiscal year 2003 was insufficient, and another supplemental request was later submitted. That's the pattern. For virtually each year of the war, Bush has submitted at least one, but usually two, supplemental funding requests. For the ongoing fiscal year, 2006, Bush never submitted a first supplemental; instead, in December 2005, Congress tacked on to the 2006 DoD Appropriations Act a $50 billion "bridge fund" to pay for the first part of this year's war.

Predictably, just like regular appropriations bills, the supplementals serve as vehicles for dubious spending. Veronique de Rugy, a research fellow at the conservative American Enterprise Institute, said supplemental bills amounted to "budget tricks" to evade spending limits.

"We have been using supplementals to finance the war, and it might actually make sense the first year," she said. "But three or four years into the war, no war spending should be going through supplementals. It's not as if it's sudden, urgent and unforeseen, or temporary."

Interestingly, on June 28 the Pentagon delivered to Congress a report, "Fiscal Year 2007 President's Budget: Department of Defense Budget Allowance Details", that spells out how the Pentagon wants to spend the $50 billion it is seeking to pay for operations in the "war on terrorism" during the first few months of fiscal 2007. The Pentagon refuses to release the report publicly.

The Pentagon's budget is being pressured by a corresponding flood of red ink in the federal budget, augmented by rising costs of Medicare, hurricane relief on the Gulf of Mexico coast, tax cuts and the Iraq war.

Budget-wise, the war in Iraq has been one of increasing costs. In January, the Pentagon said it spent $4.5 billion a month on recurring operational costs in Iraq in fiscal 2005, nearly $300 million more than the average monthly costs the previous year. But that cost was only a piece of defense spending for the ongoing operations, and does not include more than $1 billion spent each month on procurement and military construction projects, as well as additional funds allocated for intelligence operations in Iraq.

Iraq war costs are averaging about $6 billion a month, with Afghanistan costing another $1 billion. Together, that's more than the annual budget of the entire Coast Guard and 15 times what the Homeland Security Department is budgeted to spend this fiscal year on emergency preparedness for floods and other natural disasters.

In March, the Congressional Research Service released a report that said spending will rise to $9.8 billion a month from the $6.8 billion a month the Pentagon said it spent last year. The group's March 10 report cites "substantial" expenses to replace or repair damaged weapons, aircraft, vehicles, radios and spare parts. US military spending in Iraq and Afghanistan will average 44% more in the current fiscal year than in 2005.

The research service said it considers "all war and occupation costs", and figures in costs for health care, fuel, national intelligence and the training of Iraqi and Afghan security forces - "now a substantial expense", while the Pentagon counts just the cost of personnel, maintenance and operations.

War costs are rising despite Pentagon estimates of lower personnel costs. Offsetting that decline is an increased request for procurement of new equipment: $25.7 billion in 2006, up from the $18.8 billion Congress provided in 2005. And year-by-year comparisons show that appropriations for operations and maintenance spending for the US Army and Marine Corps are rising by better than 30%. Higher fuel prices are a factor. In addition, the army must hire more contractors for logistical chores previously handled by National Guard forces, who have returned home after their mobilization has run its course.

In fact, annual war costs in Iraq are easily outpacing the $61 billion a year that the United States spent in Vietnam between 1964 and 1972, in today's dollars.

And the outlook is for more of the same. In July, the US Congressional Budget Office (CBO) released an analysis that found:

    The Congress has appropriated $432 billion for military operations and other activities related to the war on terrorism since September 2001. According to CBO estimates, from the time US forces invaded Iraq in March 2003, $290 billion has been allocated for activities in Iraq, of which $254 billion has gone to the Department of Defense and other defense agencies for military operations. Approximately $14 billion has been provided to establish, train and equip Iraqi security forces. Another $22 billion has been appropriated for reconstruction and relief efforts, diplomatic and consular operations, embassy construction, economic support and foreign aid.

In addition to the amounts specifically appropriated for the "war on terrorism", the CBO estimates that from 2003 to the end of fiscal year 2006, the Veterans Administration will have spent about $1 billion on medical care, disability compensation, and survivor benefits resulting from military activities in Iraq.

The CBO also projected the cost of those activities over the next 10 years under two scenarios.

    In the first scenario the number of forces deployed in and around Iraq would be reduced from the current level of approximately 190,000 to 140,000 in 2007 and would continue to decline rapidly until all troops were withdrawn from the Iraq theater of operations by the end of calendar year 2009. By CBO's estimates, that scenario would require additional appropriations totaling $166 billion for military operations over the 2007-2016 period.

    In the second scenario, the number of troops deployed to the Iraq theater of operations would decline less rapidly, from 170,000 in 2007 to 40,000 by the end of calendar year 2010 and would remain at that lower level through 2016. By CBO's estimates, that scenario would require the appropriation of $368 billion for military operations over the 2007-2016 period.

Lack of accountability over Iraq war-related spending has been so obvious and blatant that Republican members of Congress agreed to co-sponsor with Democrats a landmark proposal to create a special House committee to investigate Iraq war spending. Previously the proposal to create a modern-day "Truman Committee" - modeled after the oversight board run by then-senator Harry Truman to root out contracting abuses during World War II - has been blocked from consideration by Republican leaders for more than a year.

The Iraq war has also had substantial costs in terms of wear and tear on equipment.

Last year senior Marine Corps officials admitted that if the war in Iraq ended tomorrow and their units shipped home, it would cost $12.8 billion to re-equip them with vehicles and gear lost in combat and through wear and tear. That outlay would take up a significant portion of the corps's yearly budget, which in 2004 stood at nearly $17 billion.

Much of the equipment deployed in Iraq is beginning to wear out as a result of heavy use, harsh operating conditions, and the frequent attacks launched by insurgents. Furthermore, the quantity and quality of weapons in units away from the war zone are eroding as equipment is transferred to deploying units. The latter problem is particularly pronounced in the reserves, which already were functioning with a deficit of modern equipment when the war began.

It was reported in February that the army is asking for $9 billion to "reset" its war-depleted stocks - the vast bulk to replace and repair tanks, helicopters and vehicles. Since the Iraq insurgency heated up in autumn 2003, the army's combat losses include about 20 M1 Abrams tanks, 50 Bradley Fighting Vehicles, 20 Stryker wheeled combat vehicles, 20 M113 armored personnel carriers, and 250 Humvees.

The number of vehicles lost in battle comes to nearly 1,000 after adding in heavy and medium trucks and trailers, mine-clearing vehicles and Fox wheeled reconnaissance vehicles. Nearly all these losses were caused by improvised explosive devices in Iraq.
The army said unfunded repair and upgrade work alone totals more than $3 billion.

During fiscal 2005 the army deployed 23% of its trucks, 15% of its combat vehicles and 15% of its helicopters in Iraq, according to the Association of the United States Army. Much of this equipment does not rotate out when troops do, either because the army is trying to minimize transport costs or because it wants to retain key items such as up-armored vehicles in the war zone.

As a result, the equipment is exposed to continuous use for long periods of time - more than two years in the case of some Chinook helicopters - and may not receive scheduled maintenance in a timely fashion. The army conducted an analysis of how such stresses affect field equipment and concluded that a single year of deployment in Iraq would cause as much wear and tear as five years of peacetime use.

That is hardly surprising, given that much of the equipment in Iraq is being used at a rate several times as high as typically prevails in peacetime. The operating tempo, or "optempo", of helicopters is twice as high in the war zone as elsewhere. Combat vehicles such as the Abrams tank and Bradley Fighting Vehicle operate at five or six times normal rates. And trucks are used at up to 10 times their peacetime rates (which helps explain why so many are washed out by the end of their time in Iraq).

But high utilization rates are only the beginning of the problem, because the conditions under which systems operate in Iraq are harsher than those encountered in peacetime training exercises. For example, Abrams tanks are designed to operate in open country, but in Iraq they often travel on paved roads, accelerating wear. Their mechanical and electronic systems are exposed to sand, wind, precipitation and vibration far in excess of what would be experienced in peacetime. Maintenance is deferred, or carried out in sub-optimal circumstances. And then there is the enemy, which seldom misses an opportunity to shoot a rocket-propelled grenade at whatever US vehicle is going by.

Considering all the insults visited on army equipment in Iraq, it is impressive that the mission-capable rates of ground vehicles such as Abrams tanks and Humvees have been maintained at 90% in the war zone, and the mission-capable rate for helicopters is a respectable 77%. But this high state of readiness is being bought at a price. The equipment in Iraq is being run down rapidly, while reserve equipment in the US is being transferred to deploying units so extensively that non-deploying National Guard units have virtually no night-vision goggles, up-armored Humvees or chemical-agent-detection equipment.

A June 26 memorandum circulated on Capitol Hill by Republican Congressman Joel Hefley, a House Armed Services Readiness Subcommittee chairman, raised concerns that army units training at home are so short on equipment and personnel that they are unready if needed urgently for Iraq, Afghanistan or potentially any other crisis that may emerge domestically or abroad. The document suggested the army had already deployed units to Iraq and Afghanistan officially rated at the lowest levels of readiness.

Fixing and replacing army equipment alone could run from $60 billion to $100 billion, according to retired General Paul Kern, a senior consultant to the Cohen Group and the retired head of Army Materiel Command. The total cost for wear-and-tear on US equipment is unclear because it is not known how long US troops will be needed in Iraq and Afghanistan.

David Isenberg is a senior research analyst at the British American Security Information Council, a member of the Coalition for a Realistic Foreign Policy, and an adviser to the Straus Military Reform Project of the Center for Defense Information, Washington. These views are his own. 

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