The $1 Trillion Bill for Bush's War on Terror

By Mark Thompson / Washington

U.S. soldiers arrive at the Kandahar Air Field in southern Afghanistan in March

The news that President Bush's war on terrorism soon will have cost the U.S. taxpayers $1 trillion — and counting — is unlikely to spread much Christmas cheer in these tough economic times. A trio of recent reports — none by the Bush Administration — suggests that sometime early in the Obama presidency, spending on the wars started since 9/11 will pass the trillion-dollar mark. Even after adjusting for inflation, that's four times more than America spent fighting World War I, and more than 10 times the cost of 1991's Persian Gulf War (90% of which was paid for by U.S. allies). The war on terrorism looks set to surpass the costs the Korean and Vietnam wars combined, topped only by World War II's price tag of $3.5 trillion.

The cost of sending a single soldier to fight for a year in Afghanistan or Iraq is about $775,000 — three times more than in other recent wars, says a new report from the private but authoritative Center for Strategic and Budgetary Assessments (CSBA). A large chunk of the increase is a result of the Administration's cramming new military hardware into the emergency budget bills it has been using to pay for the wars. (See pictures of U.S. troops in Iraq.)

These costs, of course, pale alongside the price paid by the nearly 5,000 U.S. troops who have lost their lives in the conflicts — not to mention the wounded — and the families of all the casualties. And President Bush insists that their sacrifice and the expenditure on the wars have helped prevent a repeat of 9/11. "We could not afford to wait for the terrorists to attack again," he said last week at the Army War College. "So we launched a global campaign to take the fight to the terrorists abroad, to dismantle their networks, to dry up their financing and find their leaders and bring them to justice."

But many Americans may suffer a moment of sticker shock from the conclusions of the CSBA report and similar assessments from the Government Accounting Office (GAO) and Congressional Research Service (CRS), which make clear that the nearly $1 trillion already spent is only a down payment on the war's long-term costs. The trillion-dollare figure does not, for example, include long-term health care for veterans, thousands of whom have suffered crippling wounds, or the interest payments on the money borrowed by the Federal Government to fund the war. The bottom lines of the three assessments vary: the CSBA study says $904 billion has been spent so far, while the GAO says the Pentagon alone has spent $808 billion through last September. The CRS study says the wars have cost $864 billion, but CRS didn't factor inflation into its calculations.

Sifting through Pentagon data, the CSBA study breaks down the total costs of the war on terrorism as $687 billion for Iraq, $184 billion for Afghanistan and $33 billion for homeland security. By 2018, depending on how many U.S. troops remain in Afghanistan and Iraq, the total cost is projected to likely be between $1.3 trillion and $1.7 trillion. On the safe assumption that the wars are being waged with borrowed money, interest payments raise the cost by an additional $600 billion through 2018.

Shortly before the Iraq war began, White House economic adviser Larry Lindsey earned a rebuke from within the Administration when he said the war could cost as much as $200 billion. "It's not knowable what a war or conflict like that would cost," Defense Secretary Don Rumsfeld said. "You don't know if it's going to last two days or two weeks or two months. It certainly isn't going to last two years."

According to the CSBA study, the Administration has fudged the war's true costs in two ways. Borrowing money to fund the wars is one way of conducting them on the cheap, at least in the short term. But just as pernicious has been the Administration's novel way of budgeting for them. Previous wars were funded through the annual appropriations process, with emergency spending — which gets far less congressional scrutiny — used only for the initial stages of a conflict. But the Bush Administration relied on such supplemental appropriations to fund the wars until 2008, seven years after invading Afghanistan and five years after storming Iraq.

"For these wars, we have relied on supplemental appropriations for far longer than in the case of past conflicts," says Steven Kosiak of the CSBA, one of Washington's top defense-budget analysts. "Likewise, we have relied on borrowing to cover more of these costs than we have in earlier wars — which will likely increase the ultimate price we have to pay." That refusal to spell out the full cost can lead to unwise spending increases elsewhere in the federal budget or unwarranted tax cuts. "A sound budgeting process forces policymakers to recognize the true costs of their policy choices," Kosiak adds. "Not only did we not raise taxes, we cut taxes and significantly expanded spending."

The bottom line: Bush's projections of future defense spending "substantially understate" just how much money it will take to run Obama's Pentagon, the CSBA says in its report. Luckily, Defense Secretary Robert Gates plans to hang around to try to iron out the problem.

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