Spratt Statement on Potential Cost of Operations in Iraq

WASHINGTON – Rep. John Spratt, Jr. (D-SC) today issued the following statement on release of his new report on the cost of war and reconstruction in Iraq.

“The Congress, our country, and the world were divided over the wisdom and timing of the war in Iraq. Many questions remain to be answered, but Saddam Hussein is gone, our troops are in Iraq, and the United States has a responsibility to finish the task we started and see that the job is done right. The Bush Administration has another responsibility, that of telling Congress and the American people how much this commitment is likely to cost in lives, dollars, and other resources, and what we can do to reduce the cost and expedite the return of our troops.

“The Administration should have been better prepared for the post-war operation. It also should have done more to project its impact on the budget. The cost of war with Iraq was foreseen by a number of analysts, including my staff on the House Budget Committee. In September 2002, we projected that the cost would be $100 billion to $200 billion, an estimate which has proven conservative. Nobody expects the Administration to be clairvoyant and predict the costs to the penny, and that’s not what we have been asking for. We have been asking for ballpark numbers. We have been saying that the war was something we should take into account before moving another round of tax cuts. Nobody knew the exact cost, but we knew it was not zero, and that was the number for Iraq that the President put in his budget for 2004.

“This year the federal government will run the largest deficit in its history, over $400 billion. When the President’s supplemental for Iraq is factored into the budget, next year’s deficit will exceed $500 billion.

“At a time when the nation should be saving for the retirement of the baby boomers, our budget policies are saddling us with debt. We need at a minimum to recognize the real costs of our operations in Iraq so that the President and the Congress can work out budgets that accommodate that cost. That’s what this study seeks to achieve.

“The analysis conducted by my Budget Committee staff shows that the long-term cost of the war in Iraq and the post-war reconstruction effort will be more than $178 billion and under plausible assumptions could exceed $400 billion. In all of our scenarios we assume some participation of foreign forces and some contribution toward reconstruction by other nations or by Iraqi oil revenues. Optimists may say Iraqi resources or foreign contributions will cover much of those costs; pessimists may say such sources will cover little of the costs. That’s why we present three scenarios.

“The Administration began making military preparations for the conflict in Iraq late last summer, but made no preparations for the impact on the government’s budget. The Administration operates in fiscal denial, downplaying costs or insisting costs are too variable to predict, right up to the time when the bill must be submitted to Congress. We have to finish what we have begun, and we have to support our troops, but in view of the impact on the budget, Congress should:

Require an accounting for the $70 billion in supplemental funding enacted last April for Iraq and Afghanistan, not as an audit, but as a way of bringing into focus what operations are actually costing, what economies are possible, and what costs should be expected in the future. The Pentagon has indicated that the cost of the combat phase was less than expected, but has never said where the savings were realized or what they were spent on.

Call for the Administration to justify the $87 billion now requested. The largest share of this request goes to military operations in Iraq and is based on a cost of deployment which the Pentagon asserts to be $3.9 billion per month. Congress has no validation of that estimate, and CBO tells us that it cannot account for more than $3 billion as the monthly cost of deployment.

Insist that the Administration give us its best estimate of the remaining cost, or several estimates based on realistic scenarios. All the evidence points to a large deployment of troops lasting at least two years and to requests for billions of dollars more. We need to know the total cost to understand the impact Iraq will have on a budget that is nearly a half trillion dollars in deficit already.

Identify offsets to reduce, over time, the impact that the war in Iraq and post-war reconstruction will have on budget deficits.

“It’s easy to say, as the President said, ‘We will spend whatever it takes.’ But it’s fair to ask how much that’s likely to be. It’s also fair to ask: Are we going to share the sacrifice, or charge the cost to the national debt and pass it on to our children?

“The objective of this analysis is to do what the Administration has been unwilling to do: face up to the cost of the war and what its impact will be. How much will it add to the deficit? What trade-offs will it entail? Can we sustain a go-it-alone doctrine on a global basis? Is there not a way other countries, the U.N., and multilateral agencies can share more of the cost? This study does not answer all those questions, but it does show why they should be asked.”