Cox News Service December 20, 2004
Bush Administration Preparing For Money Funds For Iraq
By George Edmonson
With more troops headed to Iraq, more money is likely to be on the way as well.
Pentagon officials are working on a proposal that could push the cost of the war with Iraq over the $200 billion mark. But while there is considerable speculation about how much the military will seek and how much the administration will agree to ask for, there is little official comment.
Spokesmen at the Pentagon and White House acknowledge that work is under way on a proposal, but have provided no specifics.
"When we've got something to announce, we'll announce it," Defense spokesman Lawrence Di Rita told reporters last week.
Most estimates range from $60 billion to $80 billion. As with earlier multi-billion-dollar supplemental appropriations, those funds would be in addition to the defense budget for the current fiscal year, which is more than $400 billion.
Few doubt that Congress will approve another supplemental. A recent research report on the U.S. budget outlook from the investment firm Goldman, Sachs & Co., for example, noted the "likely approval of $70 to $80 billion in supplemental appropriations."
John Pike, director of GlobalSecurity.org and a careful observer of defense activities, was even more forceful: "They'll get as much money as they want."
But the timing of the request, expected to come early next year, and the situation in Iraq at the time will certainly influence the debate. Among the factors that will probably play a role are the success of efforts involving Iraq's scheduled January elections, progress in providing more armor for vehicles in Iraq and the size and performance of Iraq's own security forces.
While Congressional Quarterly recently reported that J. Douglas Holtz-Eakin, director of the Congressional Budget Office, said in an interview that "current budget data points to an estimate of about $70 billion in additional spending," a CBO spokeswoman said the office had made no projection.
Many factors could affect the amount, such as the time period a supplemental request would cover, whether it includes money to repair or replace equipment or finance intelligence activities, she said in an e-mail.
Pike said he is not convinced the White House will, in fact, go for a single large figure at one time.
"My gut hunch is that it's going to be $25 billion or so, that they're just going to try to do it in little blocks," he said.
Such an approach would probably keep officials from having to provide an unclassified forecast of the war's future. It could also delay surpassing the $200 billion price tag for the war, viewed by many as a figure that will garner much attention.
The cost of the Iraq war was a point of friction before it began and remains so.
When President Bush's top economic adviser, Lawrence Lindsey, told the Wall Street Journal in September 2002 that the war could cost as much as $100 billion to $200 billion, there was an outcry and many believe Lindsey's estimate contributed to his leaving the administration.
The $87 billion supplemental request the White House made in the fall of 2003 became something of a touchstone for Democrats and Republicans in the presidential campaign.
U.S. wars have often been funded through supplemental appropriations. Some lawmakers believe it is necessary because including the amounts in the annual budget would run the risk of boosting the amount permanently.
Estimating the cost for fighting can also be extraordinarily difficult.
Yale University economics professor William D. Nordhaus noted in a 2002 examination of the potential consequences of an Iraq war that "the fog of war extends far beyond the battlefield to include forecasts of political reactions and economic consequences."
He cited as an example a Union cost estimate of $240 million for the Civil War made by Abraham Lincoln's Treasury Secretary.
"The actual cost to the North," Nordhaus wrote, "turned out to be $3,200 million, or about 13 times the original estimated cost."
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