National Security Reform Program

SHARING THE BURDEN: MORE INTERNATIONAL SUPPORT NEEDED TO PAY FOR WAR AND POST-SADDAM IRAQ
By Keith Ashdown 1
March 24, 2003

1 - 2 - 3 - 4 - 5 - 6 - notes - links - (pdf)

I. INTRODUCTION
War has always been expensive and the war in Iraq is no different. The United States has already spent $1 billion dollars on cruise missiles, $380 million on chemical protective suits, $100 million for air combat sorties, $3 million per day for food for the troops and about $2.9 million a day to operate each of the aircraft carrier groups.

As the War in Iraq progresses, there are growing questions about the total cost of 'liberating' Iraq from Saddam Hussein. Taxpayers for Common Sense (TCS) is concerned that our nation has engaged in a fiscally costly game of diplomatic brinkmanship that will likely increase the long-term American costs for building democracy in Iraq.

Most Americans, and indeed the world, agree that Saddam Hussein has to be removed from power, but there is still vast disagreement on the way to achieve this goal in a cost-effective manner. While cost alone should never be the deciding factor, any time our nation decides to go to war, the budgetary and economic costs should always be considered and carefully evaluated. In the case of Iraq, the full costs, including prosecuting the war, occupation, rebuilding and democracy building; need to be disclosed by the administration. American taxpayers deserve full disclosure on the costs to prevent a bad case of sticker shock. This open debate over long-term costs is vital to ensuring that we don't shortchange the necessary efforts to achieve the strategic goal of building a new democracy in Iraq.

Despite international dissension over the decision to go to war, the President and lawmakers should still endeavor to build stronger post-invasion ties with European and other countries that have a vested interest in a stable, democratically governed Iraq. Our current practice of fiscal unilaterialism has to end. Day by day, it becomes clearer that the real long-term financial costs lie within the occupation and rebuilding of the country. We need to encourage other countries to share in the long-term financial burden or the United States will find itself in a financially vulnerable position as we continue to fight a global war against terrorism.

The administration's delay in releasing details about the total costs of the war delays and hampers legitimate debate about the costs of a war in Iraq. As our nation is at war, it is imperative that the full short, and long-term costs of an Iraq invasion to the federal budget be carefully scrutinized, evaluated and brought to the public eye. Unfortunately, Defense Secretary Donald Rumsfeld and several other officials in this administration have commented that a full estimate on the costs of war is not "a very useful exercise." 2

This paper provides a realistic analysis of all the costs associated with an invasion of Iraq, including build-up, direct costs, replacement costs, occupation and rebuilding costs, and the economic costs of potential U.S. casualties from the conflict. While focusing on direct costs of the invasion for 2003, Sharing the Burden also calculates the total potential cost of the war if it doesn't proceed exactly as planned. The report also examines the total expense of rebuilding, occupation, casualties and protecting the health of our troops. Finally, this report provides new insight to the debate on the importance of sharing the financial burden of a post-war Iraq with other nations.

Table 1- Total potential cost of war in Iraq over the next decade
Area	Low	High
Costs of Combat 3	$56 billion	$85 billion
Humanitarian Aid4	$9 billion	$36 billion
Rebuilding Iraq5	$50 billion	$250 billion
Occupation 6	$50 billion	$159 billion
Veterans Benefits	$5 billion	$20 billion
Total	$170 billion	$550 billion

In order to pay the bill for the war and to rebuild and occupy Iraq, we are either going to run up a record federal budget deficit for this year, or we have to start making tough decisions on new ways to pay for this massive military expense. Do we cut domestic programs, pork, or wasteful and redundant military expenditures? Do we work to get international allies to help share the burden of the cost? The Administration has not provided a plan to dig our way out of the current budgetary hole and to fund a military offensive and rebuilding plan in the Middle East.

The Impact of Iraq on the Federal Budget
The escalating costs of the war on terrorism and the fact that the costs of the Iraq war haven't even been included in the $2.2 trillion dollar budget for 2004 makes it even more important that Congress and taxpayers demand the right to know about the total costs of war and it's effect on the fiscal health of our nation.7

The Bush administration is expected to request $80 billion in emergency spending to pay for a short Iraq war, costs of occupation and humanitarian aid, and homeland security spending.8 This added expense would increase the fiscal year 2003 deficit to $400 billion, the largest in U.S. history, even adjusted for inflation.9

TCS estimates that a U.S. military campaign to invade, occupy, and rebuild Iraq will cost more than $110 billion this year. When you consider all the factors, the total price tag could be $544 billion over the next ten years.10 The war is expected to cost much more than a billion dollars a day. Lawrence Lindsey, former economic advisor to the President, predicted that the total cost of Iraq war could cost $100 - $200 billion.

For the first time in a decade, the United States is running a deficit of more than $300 billion, while at the same time having to pay for other new domestic priorities and to prosecute the war on terrorism. The counter-terrorism budget has increased to over $30 billion, with much of that money going to efforts to combat Al Qaeda.11 All this despite the fact that the Bush administration took office pledging fiscal responsibility, and promised to keep the expansion and expenditures of government to a minimum during the current recession.

The current budget increases military spending to near Cold War spending levels. The tens of billions of dollars in increases for military spending will further dig a hole into the federal deficit and will crowd out other domestic spending programs, including the ability to fund a new Medicare drug benefit program, Social Security reform and the President's own education initiatives.12 Even with these increases, a full-scale war with Iraq will financially crimp military budgets, potentially force spending tradeoffs, and pave the way for one of the largest emergency supplemental bills in our nation's history, which will further increase the debt burden on our nation.

Highlights of the report:

• Costs of the war and occupation of a post-Saddam Iraq are growing. A one to three-month war is expected to cost between $56 billion and $85 billion. However, the costs of the invasion are only the tip of the iceberg. If there are military setbacks and we don't get significant international support, the Iraq war could cost up to $600 billion over the next 10 years.
  
  
• Over a five-year period, TCS estimates the cost of rebuilding and occupying Iraq to be between $100 billion and $409 billion.
  
  
• The United States is already bearing the brunt of the costs of prosecuting the war in Iraq. Sharing the Burden found that the cost of combat, rebuilding, and occupation are likely to surpass $110 billion this year.13 It is essential that the President act immediately to bridge strained relationships with our traditional allies to share the burden of the costs and responsibilities of building a stable, democratic Iraq. With a growing budget deficit and a stalled economy, the financial stakes are high.
  
  
• Additional scrutiny is needed on current administration plans to significantly involve private corporations in the rebuilding of Iraq. There is evidence from rebuilding efforts in the Balkans that government contracts with private companies can lead to significant increases in spending and costs overruns.
  
  
• If the war doesn't go as planned, a significant cost could be an increase in veterans benefits. Costs could be in the range of $2 billion a year.

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