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Backgrounder: The Cost of the Iraq War

Council on Foreign Relations

Author: Lionel Beehner, Staff Writer
November 8, 2006

Introduction

The United States has appropriated well over $300 billion (PDF) to the war in Iraq, according to the Congressional Research Service (CRS). Some economists predict the entire war, based on projections U.S. forces will remain in Iraq until after 2010, may cost over $1 trillion. The price tag has drawn criticism not only because prewar projections by the White House were closer to $50 billion, but because of the manner in which the bill was budgeted: through supplemental requests, often with little time for congressional oversight or full disclosure of how the money is allocated. “It’s a question of budgetary integrity and the degree to which you are doing this outside the normal budgetary process in a way that lacks sufficient oversight,” says CFR Chair in International Economics Douglas Holtz-Eakin, former director of the Congressional Budget Office. The next supplemental request by the Pentagon, expected next February, will be the largest yet at $160 billion.

What explains the high costs of the war?

In 2002, then-White House Economic Adviser Lawrence B. Lindsey predicted the war in Iraq would run between $100 billion and $200 billion. Mitch Daniels, the Bush administration’s budget director at the time, called the estimate “very, very high.” As it turns out, Lindsey’s estimate was low. Experts say the costs of war have escalated mainly because of a longer-than-expected occupation, stalled reconstruction efforts, and shortfalls in projected Iraqi oil revenue. “I think it was a combination of not wanting to talk about the true cost and wishful, naïve thinking about how this would play out,” says Anita Dancs, research director of the National Priorities Project, a watchdog organization that examines federal budgets. Also adding to the costs, she says, were increased demands by the U.S. military to replace or repair worn-out equipment.

Read the rest of this article on the cfr.org website.

Copyright 2006 by the Council on Foreign Relations. This material is republished on GlobalSecurity.org with specific permission from the cfr.org. Reprint and republication queries for this article should be directed to cfr.org.