The Cost of a Surge

January 4, 2007 Topic: Economics Region: Persian GulfMiddle East Tags: Iraq War

The Cost of a Surge

Due to Bush’s “emergency requests”, it is virtually impossible for the nation to track Iraq spending. The decision to “surge” forces this winter would only exacerbate the problem.

The president is widely expected to soon announce a plan for Iraq that hinges on sending more U.S. military forces to Iraq, above and beyond the 140,000 currently in that country. And while there has been some bipartisan cheerleading for such a prospect, there has been less discussion of where the troops for this famous surge would come from, what it would cost, or how it would further unravel a national-security, budget-planning process that has served the nation well since the Second World War.

Budgeting for Iraq and the so-called Global War on Terror (or GWOT), is already out of control. In large part because of its "emergency" status, the nation, and even Congress, does not know what the funding for this war covers or how it has been spent. It is virtually impossible for Congress or the American people to track Iraq spending.

The Bush Administration has demonstrated that it vastly prefers to fund Iraq as an "emergency", allowing it to sidestep the kind of detailed justification and reporting that Congress seeks in the regular budget process and has started to request on Iraq. A decision to "surge" forces this winter would only exacerbate the problem, since it will be coming long after the Pentagon has already put the next "emergency" budget request together.

Demands and Recommendations Rebuffed

The December 2006 Iraq Study Group report urged the administration to return to normal budget procedures: "costs for the war in Iraq should be included in the president's annual budget request starting in 2008."  The White House has made no response.

Later in December Congress again urged this change. In a letter, Senate Budget Committee Chair Senator Kent Conrad (D-ND) and his House counterpart Representative John Spratt (D-SC), along with Senator Judd Gregg (R-NH), asked the president to "include in [his] budget the best possible projection of war costs beyond 2008, and to specify war costs with the same level of detail as items in the regular budget." 

There is no indication the president, or the Pentagon, will agree to this request, which will in all likelihood lead to a continuation of the dance we have grown familiar with: forces go into Iraq; they are not budgeted in advance; an "emergency" budget is put together to cover them and shipped to the Congress on a "fast track", leading to little scrutiny and yet more funding.

The opacity of Iraq and GWOT spending has increasingly been the focus of concern. Last year, Congress, led by Senators John McCain (R-AZ) and Gregg, asked the Pentagon to change its budget practices and submit Iraq budget requests as part of the regular defense budget, providing equally detailed justification for the funding. The White House chose to interpret this legislation as inconsistent with the president's constitutional authority. 

According to the Congressional Research Service, the United States has committed more than $507 billion to these struggles, three quarters of it for operations in Iraq, 91 percent of it for the Pentagon and over 90 percent as "emergency" funding. In all likelihood, the White House in February will request another $100 billion in emergency funding, as well as a roughly $50 billion down payment for the same "emergency" in the next fiscal year. 

If Congress approves all of these requests, the GWOT will be at least as costly as any other war in American history, save World War II, when more than 12 million at a time served in the U.S. military. Moreover, the Congressional Budget Office estimates, very conservatively, that the United States could spend another $320 billion over the next nine years in Iraq alone, putting the total war costs over $1 trillion.

If U.S. deployments do not decline, these costs could rise significantly. The annual trajectory for GWOT spending is ever upwards, from $31.4 billion in 2001-02 to a possible $170 billion for 2007 alone. To tether these astronomical figures closer to the ground, this fiscal year we are likely to spend $14 billion a month on the GWOT, or $3.3 billion a week. Put another way, emergency money for the GWOT will consist of roughly a quarter of all the funds the Pentagon will receive for the current fiscal year.

Transparency, Interrupted

There are serious issues of good government, accountable budgeting and spending control buried in this pile of dollars. When the budgets for Iraq and GWOT are put together in the Pentagon, they consist of "lump sums" for categories of spending, not detailed budgets for specific programs or requirements. For example, the Army discloses what it is requesting for "operations and maintenance", but does not detail the funding for specific provisions, supplies, spares, or logistics. Nor does the Pentagon distinguish between the uses of these emergency funds and the regular budget funds for non-Iraq activities. Congress has been asked to take on faith that all of these funds are needed, that they are all dedicated to Iraq and the GWOT, and that other regular budget funds are not being siphoned into the war.

When the Iraq and GWOT budgets come to the Congress, the accompanying justification is thin and the emergency designation means that only one set of committees-the appropriators-get to look at it. The Budget and Armed Services Committees don't get to scrutinize the funding, unlike the normal defense budget.

These requests have also frequently included funding for items that are questionably linked to Iraq and GWOT needs and, in any case, are certainly not urgent, such as the long-term transformation of the Army, or helicopters that will take two or three years to deliver.  The forthcoming GWOT emergency request is rumored to include funding for the military's new F-35 fighter.

And once funds for Iraq and the GWOT are appropriated, there is little reporting back to the Congress on how the funds have been actually been spent. Repeated legislation requiring detailed reporting has not been followed by the Defense Department. It argues that because so much of the funding is mixed with regular budget funds for operations, maintenance, etc., that it simply cannot sort it out by emergency funds or by particular operations.

Meanwhile, the State Department reports to Congress the type of program that funds its diplomatic and foreign assistance budget, but provides no reporting on the actual execution of programs and projects.

And because it is budgeting for the war six months at a time (by now there are usually two emergency requests a year), the Defense Department has done no forecasting of what the Iraq War and the GWOT are likely to cost in the future. It says the war is unpredictable, so they cannot make a forecast, leaving it up to Congress' Budget Office to make its own estimates without any DOD input.

This rolling approach to funding the war every six months makes a clear break with past wartime practices. Historically, even wartime budgets have been put through the normal budget process in the Pentagon within a year or two of the start of combat. Today we are entering the seventh year of this unusual budget process.

Over the past six years, this practice has undermined both the administration's budget-planning system and the normal scrutiny and control Congress has given to the defense and foreign policy budgets. The budgetary consequence is real: projections of future deficits are meaningless, because Iraq costs are not forecast into the future as part of the regular budget and actual spending is counted only after the fact. The national security consequence is equally serious: neither the Congress nor the American people have a clear view of how much the war actually costs, how we are spending the funds or how much it is likely to cost in the future. The nation's fiscal-and therefore security-health is at stake.

Gordon Adams is a fellow at the Woodrow Wilson International Center for Scholars.  From 1993-97, he was associate director for National Security and International Affairs at the White House's Office of Management and Budget.