New estimate expects US wars' costs to top $1 trillion

The US has spent some $904bn since 2001 fighting the wars in Afghanistan and Iraq, and that could reach $1.7 trillion through the next decade, according to a new analysis.

WASHINGTON // The US has spent some US$904 billion (Dh3.3 trillion) since 2001 fighting the wars in Afghanistan and Iraq, and the price tag of those conflicts through the next decade could reach $1.7 trillion even if troop levels drop as expected, according to a new analysis. A report released this week by the Center for Strategic and Budgetary Assessments noted that the wars in Afghanistan and Iraq - which the Bush administration has identified as part of the "global war on terror" - have been considerably more expensive than other recent US military campaigns.

And it found that the way the administration has requested money from the US Congress to fund them - effectively in piecemeal fashion - has "tended to obscure the long-term costs and budgetary consequences of ongoing military operations" and made it difficult for the legislative branch to provide effective oversight. "The war in Iraq, as well as the war in Afghanistan, has proven to be far more costly than other recent US military operations, even adjusting for differences in the number of troops deployed and the duration of the conflicts," the report by the non-partisan Washington-based research institute found.

"Some of this cost growth appears reasonable and is relatively easy to explain. In other cases, the sources of the cost growth are unclear, or the justification for the growth is questionable." At a briefing with reporters on Monday, Steven M Kosiak, a vice president for budget studies at the centre and the report's author, said that, in recent years, there has been an ever-expanding definition of what constitutes a "war-related" cost.

Thus, the defence department began to include in its war-spending requests to Capitol Hill - largely made outside the normal budgeting cycle - funding related to the broader "war on terror". "This approach would have been like telling the [Armed] Services in 1968, at the height of the Vietnam War, that their requests for Vietnam War funding could include basically anything related to winning the Cold War competition with the Soviet Union," the report said.

The report noted that the Bush administration has funded the conflicts in a way that departs from what has been the norm. Military campaigns traditionally have been financed primarily through tax increases and domestic spending reductions, along with some borrowing. "This time, not only did we not raise taxes, we cut taxes," Mr Kosiak said. Moreover, he added, "We increased funding in other areas, we didn't scale back funding in other areas."

That has led some to argue that the war has been entirely financed by borrowing, raising questions as to whether a reliance on foreign lenders has created a "strategic vulnerability" for the United States. Some also suggest that putting off the bills to a later date essentially eliminated what would have been a useful policy discussion on the overall wisdom of going to war in the first place. The latest findings are part of the long-running effort to determine what US operations in Iraq and Afghanistan will ultimately cost; projections differ, sometimes widely, in part because it is unknown how many troops will remain there, and for how long, and how extensive their veterans' benefits will be.

Earlier this year, Joseph E Stiglitz, a Nobel Prize-winning economist, and Linda J Bilmes, a Harvard University professor who is a leading expert on public finance, published The Three Trillion Dollar War, in which they argued that will be the true cost because of hidden and uncaptured expenses. Their estimate for veterans benefits, for one, is much higher than Mr Kosiak's. Even despite the cost-estimate discrepancies, one thing is for certain: waging the wars will demand a far greater financial investment than the Bush administration expected.

"The budgetary costs of [the Iraq] conflict have already exceeded initial administration estimates by roughly an order of magnitude," the Center for Strategic and Budgetary Assessments (CSBA) report said. "The most obvious cause for this underestimate of the conflict's costs was the administration's extremely optimistic assumption that the vast majority of US forces would be withdrawn from Iraq within a few months after the country's conventional military forces were defeated, and that there would be no need to conduct large-scale, long-term stability operations in Iraq."

The vast majority of the money appropriated by Congress, $816bn, went for military operations in Iraq and Afghanistan, according to the CSBA analysis. Another $40bn was spent on equipping and training those countries' indigenous security forces; $45bn on foreign assistance and other diplomatic activities involved in reconstruction; and $3bn on veterans' care. The cost of the wars could grow to as much as $1.3 trillion to $1.7 trillion through 2018, depending on the level of troops, Mr Kosiak said. The lower estimate assumes the number of troops deployed will drop to about 20,000 in a few years; the higher one assumes the number of troops will level out, and less quickly, at about 75,000.

The analysis drew primarily from spending data by the defence department, the Congressional Research Service and the Congressional Budget Office. The report did not assess the wars' human cost: some 4,800 members of the US military have been killed in Iraq and Afghanistan, with another 33,000 wounded. [e-mail]