Wednesday, March 08, 2006

Costs in Iraq, Afghanistan Will Reach $117.6 Billion

By David Rogers
Wall Street Journal
March 8, 2006

WASHINGTON -- As the U.S. enters its fourth year in Iraq this month, the annual cost of military operations is growing -- even as the Pentagon assumes the number of troops there will shrink.

Monthly expenditures are running at $5.9 billion; the U.S. commitment in Afghanistan adds roughly another $1 billion. Taken together, annual spending for the two wars will reach $117.6 billion for the fiscal year ending Sept. 30 -- 18% above funding for the prior 12 months.

That escalation reflects the fact that America's military today is a higher-cost war machine than the one that fought in Vietnam decades ago. But it has also produced bipartisan concern in Congress that "emergency spending" for Iraq has become a way for the Pentagon to meet other needs.

War costs are rising despite Pentagon estimates of lower personnel costs: $2.6 billion for 2006, or 14% less than in 2005. 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 Army and Marines 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. "They don't have enough people," said Rep. John Murtha, a Pennsylvania Democrat.

Three years in Iraq also have taken a toll on stocks of military equipment, requiring creation of in-country maintenance facilities in Iraq. "There are unprecedented costs. It's staggering," said Republican Sen. Ted Stevens of Alaska, who, like Mr. Murtha, is a senior member of the Appropriations Committee leadership overseeing defense funding.

For Senate Budget Committee Chairman Judd Gregg of New Hampshire, an early ally of Mr. Bush, the result is a total defense budget that in real dollars surpasses those of the Vietnam War era and defense buildup under Ronald Reagan at the height of the Cold War.

"Essentially, defense is being budgeted outside the budget through emergencies," Mr. Gregg says. "The war is being used to drive those numbers, but as a practical matter, money's fungible. Obviously, a lot of that money is moving back and forth within the Defense Department."

He wants to impose more order on the process as part of a Senate budget resolution for the coming year. Meantime, the House Appropriations Committee is slated today to take up the Pentagon's newest $67.6 billion request as part of an emergency spending bill that also will provide more resources for hurricane recovery on the Gulf Coast.

Already, $50 billion in war-related emergency spending has been approved for 2006 as part of a "bridge fund" added to the annual defense-appropriations bill in December. When the new request is added, that brings the total to $117.6 billion for 2006, compared with about $99.8 billion in 2005.

The process can be difficult to follow. Congress, at the request of the White House, continues to fund the war incrementally as an "emergency." That places spending outside the customary spending ceilings that apply to annual appropriations to run the government.

Typically a "bridge fund" is approved as an addendum to the regular Pentagon budget in the fall. This is followed by a spring supplemental-spending bill, such as the one now in the House. In hopes of quick action, both Defense Secretary Donald Rumsfeld and Secretary of State Condoleezza Rice are scheduled to testify before the Senate Appropriations Committee tomorrow.

Adding to confusion is the changing nomenclature for various accounts. For example, the "Iraq Freedom Fund" was prominent early during the war, but has seemed to fade as the money is reallocated to operations accounts. But when set out in order, the four most recent bills -- two for 2005, two for 2006 -- provide a picture of what the annual costs have become on a year-by-year basis.

The Army's operations and maintenance budget, the largest of the services for the war, illustrates these changes. Total appropriations for Army O&M were $30.5 billion in 2005, but the number is expected to rise to $39.7 billion this year. And as much as $1.75 billion has been budgeted for the rest of the year to pay contractors for logistical support work.

The draft House bill today seeks to trim what lawmakers regard as nonemergency requests. The Navy was denied $74 million for helicopter procurement; the Army won't get $135 million for prefabricated buildings that the panel says have nothing to do with Iraq or the war against terrorism. But on balance, lawmakers would add a total of $1.28 billion to the procurement request, chiefly to maintain production of tanks and armored vehicles.


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