War cost estimates

1. War Costs Will Continue After 2014

   Published: June 12th, 2012
   

   The U.S. combat mission in Afghanistan may end in by 2014, but that doesn’t mean troops will be coming home. And it certainly doesn’t mean that war costs will end any time soon.

   The situations in Iraq and Afghanistan are very different, but Iraq can still tell us something about what may happen in Afghanistan.  President Obama declared an end to the combat mission in Iraq at the end of August 2010, when there were close to 50,000 U.S. troops in the country. One year later, there were still around 40,000. If the Iraq government hadn’t refused to grant U.S. troops legal immunity, they would still be in Iraq today.

   We’re likely to see something similar in Afghanistan. The U.S. and NATO allies will transition the lead combat mission to Afghan forces mid-2013, but the International Security Assistance Force
   combat role will not end until 2014. What the U.S. military presence in Afghanistan will look like post-2014 is anyone’s guess, but the U.S.-Afghanistan Strategic Partnership Agreement explicitly “provides for the possibility of U.S. forces in Afghanistan after 2014.”

   Sustaining an expansive the U.S. presence in Afghanistan will be expensive, especially if the number of deployed U.S. troops stays high. The U.S. has already agreed to pay $2.6 billion per year through 2024 for the Afghan security forces. Add to that some $8 billion – that Department of State request for war-related operations in 2013 – and you’re already over $10 billion, without even looking at the Department of Defense budget. DOD’s reset account – funds to repair and replace equipment used in combat operations – came to $13 billion in 2012.

   Costs to sustain U.S. troops, however many stay in Afghanistan post-2014, are in addition to all these costs, meaning U.S. taxpayers will continue to pay billions to finance the war for years to come.

   
   

   Tags: Afghan security forces, aid, defense spending, State Department, strategy, timetable, War cost estimates, War costs, withdraw

2. Wars End, but War Costs Continue

   Published: March 27th, 2012
   

   The Afghanistan War will end eventually, the troops will come home, and the United States taxpayer will start saving billions a week. However, U.S. operations in Afghanistan will continue to be a significant expense long after the troops come home.

   We can look to Iraq as an example. The last U.S. troops left Iraq in December 2011, three months into fiscal year 2012. In FY12, we budgeted over $14 billion for operations in Iraq—that includes Department of Defense funding ($9.6 billion) as well as Department of State and foreign aid ($4.8 billion).

   The fiscal year 2013 request is much less than that, but still significant—about $7.6 billion. $2.9 billion is for DOD’s “reset of equipment from deploying in Iraq.” Assuming reset costs decline steadily, that still leaves over $5 billion for State and foreign aid. Further, assuming we continue to maintain a diplomatic presence in Iraq, that $5 billion per year will likely continue.

   There’s every reason to believe that the transition from DOD to State,soldiers to civilians, in Afghanistan will be at least as expensive. For one, Afghanistan already gets more in foreign aid than Iraq—$2.3 billion in 2012. Assuming the civilian presence expands as U.S. diplomats replace soldiers, the Department of State in Afghanistan will increase too.

   On top of diplomatic operations and State-funded foreign aid, Afghanistan gets a big chunk of change through the Department of Defense. The Afghanistan Infrastructure Fund and the Commander’s Emergency Response Program came to $800 million in 2012. Since these funds are for Afghanistan reconstruction projects, they may continue after U.S. troops leave.

   Then there is the small matter of training and equipping the Afghanistan Security Forces. The 2013 DOD request is $5.7 billion, a big drop from $11.2 in 2012. Considering Afghanistan’s financial situation, local security forces will likely rely on foreign funds for many years—meaning $5 billion per year is about what we can expect to pay for the next several years to support Afghan’s security forces.

   We still haven’t even gotten to the one big question: what about U.S. troops? If you thought that all U.S. troops will be leaving Afghanistan by 2014, think again. The administration has consistently emphasized 2014 deadline, the date agreed to at the Lisbon summit, as the deadline for transitioning to a training role, meaning local forces will take the lead in combat. By and large U.S. officials have stuck to that date, with a few hints of starting to transition early and ending by 2013.

   Here’s the catch: the U.S. combat mission may end in 2014, but that doesn’t mean all troops will leave. The majority of the 68,000 left may come home by 2014. However there is considerable support for leaving anywhere from 10,000 to 35,000 troops to serve as trainers and advisors to the Afghan National Security Forces. The costs associated with maintaining a military presence after 2014 are unclear, but it won’t be cheap.

   There are good arguments to be made for leaving military advisors and for maintaining a diplomatic presence in Afghanistan. But that argument must be made in a budget context, because whatever we decide, we’ll have to pay for it.

   
   

   Tags: defense spending, deficit reduction, drawdown, strategy, timetable, War cost estimates, War costs

3. Afghanistan Weekly Reader: U.S. Spent $52 billion for Training and Equipping Afghan Security Forces

   Published: February 24th, 2012
   

   The US has spent around $86 billion on Afghanistan reconstruction efforts since 2002, according to a report from the Special Inspector General for Afghanistan Reconstruction. The majority of these funds, some $52 billion, is for training and equipping the Afghan security forces. The remaining $34 billion goes towards governance and development, counternarcotics efforts, and humanitarian aid.

   What does $86 billion buy? Not much, it seems. A SIGAR auditor estimates that only 15% of US aid to Afghanistan makes it to the intended recipients. A whopping 70% – over $60 billion – is eaten up by overhead costs. The remaining $13 billion is lost to waste and corruption.

   Ten years of war point to one thing: it’s time to rethink our Afghanistan policy. An effective strategy doesn’t have to be a costly strategy.

   From ASG
   2/22/12
   Tracking Hidden War Costs
   Afghanistan Study Group by Mary Kaszynski
   The Department of Defense war funding request for 2013 is $88.5 billion. But war costs hidden in the rest of the federal budget true costs of war are hidden

   ARTICLES
   2/20/12
   The Real Defense Budget
   The Atlantic by Steve Clemons
   While everyone knows that the defense budget is large — even in the numbers that the public sees as the formally admitted figures by the Department of Defense — the truth is that when one scratches beneath the bureaucratic veneer, national security spending is much larger, nearly double the amount US citizens are told.

   2/21/12
   War Funding Request Denotes 68,000 Troops Through Late 2013
   FCNL by Matt Southworth
   Looking at the fiscal year 2013 war funding request, you might think war is getting less expensive. Not quite. Funding overall is on the decline, yes, but the war in Afghanistan still costs $1 million per soldier, per year.

   OPINION
   2/19/12
   U.S. troops will remain in Afghanistan beyond 2014
   Washington Post by Ronald E. Neumann
   The strategy of transition asks our commanders for large measures of resolve, discipline and courage. They have every right to expect clarity and resolve from their political leaders. President Obama needs to explain his strategy to Americans, not talk only about withdrawal dates.

   2/21/12
   U.S. Should Consider an Earlier Exit From Afghanistan
   Bloomberg Editorial
   Over the last decade the U.S. has made an enduring point: Any nation that allows a terrorist attack on the U.S. from its soil faces a response that will be swift, brutal and relentless. Isn’t that enough?

   2/24/12
   Why we need to get out of Afghanistan — now
   Chicago Tribune by Mark Doyle
   Many are criticizing the Obama administration’s decision to withdraw American troops from Afghanistan in 2013. They say it is too soon.
   I say it is not soon enough. After spending the past year working in Afghanistan trying to account for billions of dollars spent there by U.S. taxpayers, I say why wait another year? Let’s bring our military and civilian personnel home — now.

   
   

   Tags: Afghan security forces, Afghanistan Weekly Reader, aid, War cost estimates, War costs

4. Tracking Hidden War Costs

   Published: February 22nd, 2012
   

   Mary Kaszynski
   Afghanistan Study Group

   How much have the wars in Afghanistan and Iraq cost the American taxpayer? It seems like an easy question. Add up all those supplemental war appropriations from the Bush years and the overseas contingency operations, and you should have the answer.

   It’s not that simple. The US invaded Afghanistan in October 2001. More than ten years later, we’re still at war, and we still don’t know how much we’ve spent on it. That says something about the Pentagon’s accounting practices—the Department of Defense still can’t complete an audit—and the way we budget for war in particular.  Most importantly, it says something about accountability and transparency in government spending in general.

   We recently tried to add up America’s war bill and encountered some difficulties just trying to get the right number.  We looked at various agency budgets to locate line items that contribute to the cost of war in Iraq and Afghanistan.  Our hope is to demonstrate that arriving at a firm number is a herculean task.

   Defense War Budget – the primary costs of war should be in the Department of Defense Overseas Contingency Operations (OCO) account. However, all war costs are not in the OCO account – and everything in the OCO account is not for the war. Included in OCO is the cost of the military “reset”, which allocates monies for repairing and restoring equipment used during the war.

   How much of the reset actually has to do with the war is unclear. The Congressional Research Service estimates that more than 40% of what the Army calls “reset” is used for things other than repair and replacement.

   Defense Base Budget – Sometimes non-war costs are moved from the base to the war account to evade budget caps. Sometimes it goes the other way; In this year’s budget the administration moved about $10 billion in enduring operations costs to the base budget.

   It’s hard to estimate just how much of the base defense budget goes towards the wars. The defense budget, excluding war funding, has grown significantly since 2001, which shows that some portion of the base defense budget can be attributed to the cost of war in Afghanistan and Iraq. How much? Economist Joseph Stiglitz estimates at least 25% of the base budget increase is due to the wars (The Three Trillion Dollar War, page 46). With an increase of $670 billion since 2001 in the base budget, that would mean an additional $168 billion in war costs.
   
   Other Agencies – Since 2001, CRS estimates that State and USAID have spent $67 billion in Iraq and Afghanistan. These agencies will take on more as combat operations wind down, and war funding reflects this. State’s 2013 request for OCO (a new account in 2012) is $8.2 billion.

   State’s OCO account may be small, but that doesn’t mean following the money is any easier. Take state money for Afghanistan for example. State OCO includes $3.3 billion for the war in Afghanistan.
   
   Associated Costs – There is much more to paying for war than the costs of ongoing operations. One big associated cost is caring for veterans of Iraq and Afghanistan. The Veterans Affairs budget has grown significantly over the past ten years, and it will continue to grow long after the wars are over.

   The cost of caring for veterans is never included in the Pentagon’s war estimate, but full-cost analyses commonly take this into account. The projected total cost of veterans’ health care and disability is $422 billion to $717 billion, according to a recent study by the Center for American Progress. The 2013 VA request is $140 billion.

   The wars in Iraq and Afghanistan are also a main driver of the national debt. In 2013, the payment on the national debt due to DOD war costs will be about $5.8 billion.* Stiglitz estimates that the wars are directly responsible for at least a quarter of the increase in the national debt – that’s over $2 trillion since 2003.

   So how much have the wars in Iraq and Afghanistan cost? The Department of Defense war budget (supplementals plus OCO) totals $1.2 trillion since 2001. But as you can see, DOD OCO is just the beginning. Once you start adding in all the hidden costs, the total is much, much greater.

   
   *DOD OCO is approximately 2.3% of total government spending (88.5/3800). Payment on the debt in 2013 is $248 billion. Assuming war costs account for the same percentage of debt as total government spending, we have $248B*2.3%=$5.7B. See Winslow Wheeler’s calculation for the defense budget and payment on the debt: “Which Pentagon Numbers Are Real? You Decide!”

   
   

   Tags: exit strategy, timetable, War cost estimates, War costs

5. Afghanistan Weekly Reader: $97 billion for another year of war

   Published: February 16th, 2012
   

   The defense budget is driving the news this week. The president’s request for fiscal year 2013, unveiled Monday, includes $89 billion in war costs for the Department of Defense, plus $8 billion for State – a total of $97 billion. Problems with this number are already starting to pop up. Funding for inefficient and unsustainable infrastructure projects continues in the 2013 request, as does the Pentagon’s habit of hiding non-war costs in the war budget.

   Defense Secretary Panetta expects an agreement on the US presence in Afghanistan in the next few weeks. That may help clear up some questions about future war costs. But if this year’s war budget is any indication, war spending won’t be going down anytime soon.

   From ASG
   2/14/12
   Capping War Costs at Only $450 Billion
   Afghanistan Study Group by Mary Kaszynski
   The president’s budget proposes a $450 billion cap on war spending over the next nine years. This is a step in the right direction, but the proposed cap is far too high, leaving plenty of room for unnecessary spending.

   ARTICLES
   2/10/12
   Defense budget magic
   CNN by Libby Lewis
   Defense Secretary Leon Panetta hasn’t revealed much so far about his department’s budget proposal for the next fiscal year. But he has offered a peek at some numbers, like this one: $88.4 billion for war funding…The war is expensive, true, but some defense budget experts say there may be also be some defense budget magic going on. It’s a magic made possible by two things.

   2/12/12
   Risks of Afghan War Shift From Soldiers to Contractors
   New York Times by Rod Norlund
   Even dying is being outsourced here.
   This is a war where traditional military jobs, from mess hall cooks to base guards and convoy drivers, have increasingly been shifted to the private sector. Many American generals and diplomats have private contractors for their personal bodyguards. And along with the risks have come the consequences: More civilian contractors working for American companies than American soldiers died in Afghanistan last year for the first time during the war.

   2/15/12
   Pentagon hides $3 billion in budget accounting maneuver
   Foreign Policy by Josh Rogin
   The Pentagon’s new budget request moves $3 billion of military pay and benefits out of the base budget into the war budget in an accounting maneuver experts and congressional staffers say is meant to get around legally mandated budget caps and bolster the administration’s plan to cut the size of the Army and Marines.

   OPINION
   2/14/12
   450 Bases and It’s Not Over Yet
   TomDispatch by Nick Turse
   Whether the U.S. military will still be in Afghanistan in five or 10 years remains to be seen, but steps are currently being taken to make that possible. U.S. military publications, plans and schematics, contracting documents, and other official data examined by TomDispatch catalog hundreds of construction projects worth billions of dollars slated to begin, continue, or conclude in 2012.

   
   

   Tags: Afghanistan Weekly Reader, drawdown, exit strategy, War cost estimates, War costs

6. Do you want to spend another $88 Billion in Afghanistan?

   Published: February 7th, 2012
   

   

   Mary Kaszynski
   Afghanistan Study Group

   Of the 90,000 troops currently stationed in Afghanistan, 22,000 are scheduled to come home this summer. The 2013 drawdown plan hasn’t been revealed, but Sec. Panetta’s announcement that combat operations may end in 2013 seems to indicate a faster drawdown than previously expected.

   The war in Afghanistan may be winding down faster than expected, but it continues to cost billions. One week from today the president will unveil a spending plan for 2013. His request is expected to include $525 billion for the Department of Defense, plus an additional $88 billion for war costs.

   We’ve mentioned before that this number seems suspiciously high, considering the pace of the drawdown, We’re not the only ones who think so. At the budget briefing two weeks ago a reporter noted that the cut from last year’s war costs to this year “doesn’t seem like it’s that much of a reduction” and asked DOD officials to “give us some sense of what that’s for, that 88.4 billion?” JCS Chair General Dempsey’s response: “For recapitalization, for reconstitution, we’ve always said that it would take years following the end of the conflict to recapitalize the force.  And some of the OCO costs are caught up in that. ”

   Dempsey’s answer is not that surprising. The need to “recapitalize” or “reset” the force after a decade of war is a favorite line for those who want to keep defense spending high. Trimming the defense budget, we are told, would hollow out our military forces and leave us open to all sorts of dangers.

   The problem with this argument is that it’s simply not true. A new report from the Congressional Research Service says, in a typically understated way, “it can be argued that the use of the term “hollow force” is inappropriate under present circumstances.”

   Recent defense spending trends confirm this. Over the past ten years, the US has spent close to $1 trillion on defense procurement, according to a recent report from the Stimson Center. $233 billion, or 22% of that total, came from the war costs account. Thanks to the war funding, the Army was able to upgrade most of its combat and support vehicles – and then some. The GAO estimates that over 40% of the funds the Army requested for the “reset” went to programs that “although beneficial to the Army, do not directly relate to replacing lost equipment or repairing worn or damaged systems.”

   War spending has consistently been given a special status, exempt from the scrutiny applied to other areas of government spending. This is unlikely to change in the near future. In fact, since the Budget Control Act of 2011 exempts war funding from spending caps, it is even more likely that non-war expenses will find their way into the war account.

   What does this mean for the American taxpayer? It means that the price tag for the war in Afghanistan – $88 billion if the 2013 request is fully funded – will include a war that the majority of Americans do not support, plus some equipment that the Army doesn’t need, and who knows what else. The war may be winding down, but the Defense Department’s shady accounting practices continue, at the expense of the American taxpayer.

   
   

   Tags: drawdown, Reset, War cost estimates, War costs

7. $83 billion in projected war costs for 2013

   Published: January 17th, 2012
   

   

   Mary Kaszynski
   Afghanistan Study Group

   The president’s budget request for fiscal year 2013, starting October 1 of this year, will be released next week. Bloomberg reports the request is expected to include $83 billion for the wars in Iraq and Afghanistan.

   The final number for Defense Department war costs in fiscal year 2012 is projected to be $115 billion, so $83 billion doesn’t look too bad by comparison – that’s a decrease of $32 billion, or 28%. $83 billion is still a lot of money, however, especially when money is tight. So it’s worth taking a closer look.
   
   What’s immediately clear that there’s something funny with this number. In its most recent scenario for the drawdown timeline, the Congressional Budget Office estimated $83 billion for fiscal year 2013, the same as the expected request. CBO’s estimate, however, was based on an assumed troop level of 100,000 in 2013. The president’s plan is to bring back the rest of the 30,000 “surge” troops in 2012, leaving about 68,000 at the beginning of 2013. (The timeline for 2013 and beyond is still unclear, though 2014 is still the official deadline for the transition to local security forces).

   So, to recap: CBO says 100,000 troops in 2013. The administration says 68,000 at the beginning of 2013, and something lower than that by the end. Both say this will cost $83 billion.
   
   What explains the discrepancy? The Congressional Research Service’s latest report Amy Belasco offers a couple of explanations.

   First, the way CBO makes these estimates cannot take into account policy decisions, like the decision about how much to contribute to the Afghan National Security forces. (This particular example doesn’t explain why the administration estimate is higher, since the US is planning to cut back on aid to the Afghan security forces).
   
   A second explanation is in the different ways in which CBO and DOD develop these estimates. CBO bases its estimate on previous cost trends. DOD, on the other hand, uses “a model to estimate the costs of deploying specific types of units in each service.” CRS notes that “It does not appear that DOD uses per previous annual per troop costs as a general check of the validity of its model.” The end result is that CBO’s estimates are usually much lower than the request for the same number of troops.
   Finally, the CRS report concludes with a fascinating line: “There is some evidence in recently reported obligations that DOD’s war requests may be overstated.” CRS has documented and discussed at length the differences between DOD requests and CBO estimates (see, for example, pages 20-24 of this report). But the bottom line is this: DOD consistently requests more for war costs than CBO estimates, and there is no entirely satisfactory reason.
   
   The 2013 request is unlikely to be an exception to this trend. $83 billion may not seem like a lot compared to last year, but it is still too much. The war is supposed to be wrapping up and the troops coming home. The Defense Department is making some tough choices about where to cut back.  Why aren’t they cutting back war costs?

   
   

   Tags: Congressional Budget Office, Congressional Research Service, defense spending, drawdown, overseas contingency operations, timetable, War cost estimates, War costs