In Talk of War, Cost Is Avoided
Cost Estimates Vary, but Administration Saying LIttle

By Terry M. Neal
washingtonpost.com Staff Writer
Friday, March 7, 2003; 1:07 PM


In his prime-time press conference Thursday night, President Bush did not specifically address the pink elephant in the room.

Given that the public is so split on the question of going to war, it's astonishing that there has been so little debate on the potential costs of war and what the impact of those costs will be over the long term in terms of meeting other priorities and securing the economic health of the nation.

Few rational people would argue against spending large amounts of money or even running large deficits to allow a nation to defend itself. But there is legitimate debate among the president's detractors and his supporters about whether attacking Iraq really will increase the security of America and its allies.

The White House has assiduously avoided the debate over the cost of war. When President Bush's former economic adviser, Lawrence B. Lindsey, broached the subject in an interview with the Wall Street Journal last fall and predicted that the war and its aftermath could cost as much as $200 billion, he sealed his fate as a short-timer in the administration.

The president Thursday night carefully avoided talking specifically about what the potential cost to taxpayers could be. A reporter asked the president why he had not shared with the public the range of cost estimates the government's numbers crunchers had come up with for various scenarios.

"We will," the president responded. "We'll present it in the form of a supplemental to the spenders. We don't get to spend the money, as you know, we have to request the expenditure of money from the Congress. And at the appropriate time, we'll request a supplemental. We're obviously analyzing all aspects. We hope we don't go to war. But if we should, we will present a supplemental."

The White House has been deliberately vague about when it would submit that supplemental budget. Interestingly, when the administration released its 2004 budget last month, there was no indication whatsoever about how much might be needed to fund a war that appeared to be inevitable at that point. What's even more interesting is that Bush could technically submit his request for funding to Congress after the bombs start to drop -- meaning there likely will be no meaningful public debate over the costs of war, since there is almost no way Congress would refuse to fund a war that it already gave the president authority to fight.

The Cost Scenarios

The truth is, no one knows how much a military strike on Iraq will cost. There are simply too many scenarios: Will it be quick and relatively easy? Or will it be protracted and bloody? How long will the U.S. stick around for peacekeeping purposes? To what extent will the United States commit to rebuilding the tattered nation -- and how much support can it count on from its allies in that regard?

At this point, there have been a number of analyses of the potential cost of war. Let's examine a few of them here:

• In September, the nonpartisan Congressional Budget Office wrote to Democratic leaders in Congress about potential costs, estimating that deploying troops to the region for war and returning them to their home bases afterwards could cost between $14 billion and $20 billion. Fighting the war could cost up to $9 billion a month, and post-war occupation would cost up to $4 billion a month.

Extrapolating from the CBO data, a two-month war with a two-year occupation, not including rebuilding and humanitarian costs, could cost as much as $134 billion. Because the administration has indicated it will launch a major nation-building effort aimed at turning Iraq into a model democracy after the war, it is safe to assume that the costs will be far greater.

• Also in September, the House Budget Committee's Democratic staff concluded in a report that Lindsey's estimate of up to $200 billion in direct costs was accurate. The cost of the military operation alone, assuming a two-month conflict using up to 250,000 troops, would cost as much as $93 billion, according to this report. And that is assuming that the operation is like the one in the Persian Gulf War, "with inept enemy forces, no use of chemical or biological weapons, access to bases and airspace in most Gulf states and Turkey, and low casualties on our side."

• A new study by Steven M. Kosiak, a military budget analyst for the nonpartisan Center for Strategic and Budgetary Assessments, is getting a lot of notice around Washington. Released in late February, Kosiak's report www.csbaonline.org offers a range of scenarios and potential costs for war and post-war occupation.

Using numbers from the CBO report and historical data from recent U.S.-led military operations in the Persian Gulf and the Balkans, Kosiak assumes a minimum cost of $43 billion for a best-case scenario -- a one-month war using 175,000 troops and a five-year occupation using 20,000 troops. But that figure could top $200 billion, should the operation last longer and become more difficult than envisioned.

• In a report from Yale University economist William D. Nordhaus, he argues that the total macroeconomic costs of war and its aftermath could reach in a worst case scenario as much as $1.6 trillion (by comparison, Bush's 2004 budget proposal for the entire federal government is $2.25 trillion). Nordhaus looks at not only the direct costs of war and its aftermath, but the potential impact on stock and oil markets.

Of course, the real wild card in all of these estimates is what happens after the war. And, with U.S. allies split on Iraq, the Bush administration could end up bearing much of the costs. Kosiak estimates post-war, non-military costs of up to $137 billion for things such as aid to allies in the region, humanitarian assistance, governing activities and reconstruction and recovery. Adding in debt relief and other related costs could push the costs up by as much as another $361 billion. Given the anger over the Bush administration's bellicose rhetoric, it is easy to assume less rather than more post-war cooperation from allies.

Kosiak estimates that even in the short-term, a war on Iraq could add as much as $100 billion to next year's predicted record $307 billion deficit. The further out you go, the less clear the budgetary impact is. But this is certain: Every dollar spent on war is one not spent on education, health care, domestic law enforcement, homeland security and other priorities.

The irony is Bush's submission of his Iraq war supplemental budget is likely to end up undermining his new tax cut proposal, which was just revised upward by the nonpartisan congressional Joint Committee on Taxation to $726 billion over he next decade.

"There is a legitimate question over whether that (the cost of war) should or shouldn't color your view about permanent changes in taxes or entitlement spending," Kosiak said. "But maybe it suggests you should resolve some of that uncertainty before you sign up for those sorts of tax cuts or continue spending at the same rate."

The Price of Inaction

There are, of course, at least two sides to every argument.

"The price of doing nothing exceeds the price of taking action if we have to," Bush said during his press conference. "We will do everything we can to minimize the loss of life. The price of the attacks on America, the cost of the attacks on America on September the 11th were enormous. They were significant. And I am not willing to take that chance again."

Kosiak agrees: "In weighing the merits of military action, it is also important to understand that there may be substantial costs associated with foregoing or delaying military action."

Many of those who support Bush's position argue that it is ridiculous to even get caught up in this debate: How do you put a dollar figure on security, on human lives? How could anyone agree that a man like Saddam Hussein -- who has dropped poison gas on his own countrymen, hates America and has tried to assassinate an American president -- should be allowed to build and possess weapons that in the hands of the wrong people could used to attack in a way that would dwarf the Sept. 11 terror attacks in scale?

The flip side of that is that many people here and abroad are not convinced that attacking Iraq will make the free world a safer place at all. First, they say, there's still no convincing evidence that Saddam Hussein had anything to do with 9/11, which was planned and funded largely by people from American ally Saudi Arabia. Secondly, they say resentment against America for attacking a Muslim nation will only increase resentment and increase the determination of terrorists. Thirdly, attacking Iraq and ousting Hussein merely eliminates one of dozens of potential ways America could be attacked by those who hate us. And finally, there is not enough convincing evidence against Hussein to deviate from America's historic aversion against pre-emptive attacks.

Given the level of disagreement, war opponents will argue, shouldn't there at least be a real debate over the potential costs of war?

© 2003 The Washington Post Company