So, You Think You Know the Cost
of the Wars?
by Winslow Wheeler, CDI Straus
Military Reform Project Director
The Defense Monitor, Center for
Defense Informaton, September/October 2006
In a seemingly welcome exercise of congressional
oversight, Rep. Christopher Shays, R-Conn., held hearings on the
cost of the wars in Iraq and Afghanistan. He's the chairman of
the subcommittee on National Security, Emerging Threats, and International
Relations of the House Government Reform and Oversight Committee.
He required testimony by all three congressional research agencies
(the Congressional Research Service [CRS], the Congressional Budget
Office [CBO], and the Government Accountability Office [GAO])
and by the departments of State and Defense.
WAR COST ESTIMATES
CRS estimated the cost of the wars per
the table below.
In its testimony, CBO reported different
* $433 billion, not $439.9 billion, for
the total cost of the various wars.
* Of that amount, CBO counted $290 billion
for Iraq, not $318.5 billion.
* CBO counted $142 billion for Afghanistan
and Noble Eagle, not $114.4 billion.
* CBO also calculated the cost of interest
on the national debt based on war costs ($11 billion through the
end of 2006).
GAO had still different numbers, including
$430.1 billion for all costs for the "war on terror."
DOD, the State Department and other Bush
administration components said the real cost was $416.6 billion.
These estimates present a range of $20.3
billion. Perhaps most troubling, these differences are not over
the arcane issue of how much has been "obligated" (that
is, cued up inside agencies to be spent for a specific program
or contractor) or "outlayed" (actually spent). Instead,
these differences are over the relatively simple question of how
much has been appropriated in public bills by Congress.
Worse yet, Congress doesn't seem to know
how much it appropriated either. In a letter dated July 20, Shays
brought the discrepancies to the attention of the chairman of
the House and Senate Appropriations Committee. Shays has received
no reply, and Hill staff expect he will get none.
THE MESS IN DOD
These differences notwithstanding, CRS,
CBO, and GAO did agree on one thing: DOD's data on the costs of
the wars cannot be trusted.
CBO stated in its testimony to the National
CBO frequently has difficulty obtaining
monthly reports on war obligations [i.e. how the money is planned
to be spent] and other data. Often the agency receives that information
months after the data are officially approved for release."
CBO also stated "DOD's supplemental
budget requests and the monthly obligation reports issued by the
Defense Finance and Accounting Service (DFAS) often do not provide
enough detail to determine how ... funds for operations in Iraq
and the war on terrorism have been obligated."
GAO's testimony was more pointed: "GAO's
prior work found numerous problems with DOD's processes for recording
and reporting GWOT [global war on terrorism] costs, including
long-standing deficiencies in DOD's financial management systems
and business processes, the use of estimates instead of actual
cost data, and the lack of adequate supporting documentation."
For example, GAO found $1.8 billion in
expenses that were double counted in 2004 and 2005; and some costs
to be "materially overstated" by as much a $2.1 billion
GAO concluded: "As a result, neither
DOD nor the Congress reliably know how much the war is costing
and how appropriated funds are being used or have historical data
useful in considering future funding needs."
CRS' testimony was the most revealing
of all. It asserted that reporting on the costs of the wars requires
the "use of estimates to fill gaps and resolve discrepancies
and uncertainties" encountered in DOD's data.
The terms "gaps" and "discrepancies"
are perhaps a bit too polite for some of the problems CRS found,
* In fiscal years 2001 to 2002, DOD "obligated"
[intended to spend] $1.2 billion more than the budget authority
appropriated by Congress for the wars - a potential violation
of the Anti-Deficiency Act.
* The funding sources for $2.5 billion
spent in 2002, "presumably for initial troop deployments"
for the Iraq war, were "unclear."
* $7 billion that was appropriated in
2003 to DOD for the war has apparently not been spent, but in
any case DOD's records on what happened to the money do not exist.
* Yet again, in 2004, DOD obligated $2
billion more than the appropriations available to it from Congress
- another potential Anti-Deficiency Act violation.
Most of the above data pertain to "obligations,"
not the money actually spent (outlays). The outlays for the war
are impossible to track; DOD mixes those records with outlays
for non-war costs, making it impossible to determine if the money
was spent as DOD, or Congress, intended.
CRS also reported that it is not just
DOD's cost estimates that are problematic. DOD apparently cannot
agree with itself on the question of how many military personnel
are deployed for the wars in Iraq and Afghanistan.
DOD, and the press, typically report on
the numbers of U.S. military personnel deployed inside Iraq and
Afghanistan, not including the numbers deployed to surrounding
countries to support the in-country personnel.
Different DOD reports give different figures
for the total numbers in and around both countries:
DOD's Contingency Tracking System counted
260,000 deployed in and around Iraq (as opposed to numbers varying
from 140,000 to 160,000 for those inside Iraq) and 60,000 deployed
in and around Afghanistan (as opposed to 18,000 to 20,000 reported
o DOD's report "Active Duty Military Personnel by Regional
Area and by Country" listed 207,000 deployed altogether for
Iraq and 20,000 for Afghanistan.
* DFAS cost data supports 202,000 deployed
for Iraq and 50,000 deployed for Afghanistan.
In short, nobody in the executive branch
or Congress can reliably say what the wars in Iraq and Afghanistan
have cost, nor the exact number of troops deployed for them. Various
entities have different estimates that vary by tens of billions
of dollars and thousands of people; they cannot even agree on
the dollars publicly appropriated by Congress. Also, there is
no reliable record for how the Pentagon planned to spend the money
appropriated to it by Congress, and there is no record whatsoever
for how it was actually spent.
Students of DOD finances over the years
will understand this unhappy fact as just one more example of
the Defense Department's failure to comply, as most other federal
agencies have already done, with generally accepted laws, regulations,
and practices for financial management. According to the discussion
in the hearing, this problem has been with us since 1947.
Under the banner of "support for
the troops," Congress has been heaving hundreds of billions
of dollars at DOD, but it has not made a public record of how
much it has appropriated for the wars, and it has not required
DOD to keep any competent records either. These problems caused
some uncomplimentary comments at the July 18 hearing, but no plan
for remedial action was decided upon.
What would seem to be a laudable exercise
of congressional oversight has actually become a painful example
of how little oversight there actually is.
Shays deserves credit for asking for testimony
and complaining to the Pentagon and the appropriations committees.
However, he might as well just shout down an empty well.
If Shays decided to climb down to the
bottom of that well, he'd find the financial and moral accountability
Congress and the Pentagon have thrown down there.