Bush to Seek Up to $95 Billion To Cover Cost of War in Iraq
By GREG JAFFE and JOHN D. MCKINNON Staff Reporters of THE WALL STREET JOURNAL
WASHINGTON -- The Bush administration is preparing supplemental spending requests totaling as much as $95 billion for a war with Iraq, its aftermath and new expenses to fight terrorism, officials said.
The total could be as low as $60 billion because Pentagon budget planners don't know how long a military conflict will last, whether U.S. allies will contribute more than token sums to the effort and what damage Saddam Hussein might do to his own country to retaliate against conquering forces.
Budget planners also are awaiting the outcome of an intense internal debate over whether to include $13 billion in the requests to Congress that the Pentagon says it needs to fund the broader war on terrorism, as well as for stepped up homeland security. The White House Office of Management and Budget argues that the money might not be necessary. President Bush, Defense Secretary Donald Rumsfeld and budget director Mitchell Daniels Jr. met Tuesday to discuss the matter but didn't reach a final agreement. Mr. Rumsfeld plans to continue pressing his case for the funding.
The $95 billion figure -- including money the State Department would use to compensate Turkey and other allies hurt by a war -- suggests that the conflict's ultimate cost could approach the $100 billion-plus estimate offered last year by President Bush's former top economic adviser, Lawrence Lindsey. The size of Mr. Lindsey's estimate shocked Congress and raised a political ruckus at the time.
The supplemental requests' magnitude also indicates that the Bush administration is willing to pump far more money and manpower into maintaining order and rebuilding Iraq than it has in Afghanistan. The Afghan government has complained that the U.S. hasn't placed a high enough priority on such matters there. The administration has asked Congress to appropriate about $7 billion for military operations and humanitarian assistance next year in Afghanistan, where 8,000 troops remain active.
The requests come at a time of soaring deficits -- more than $300 billion proposed for this year -- that have led to calls for austerity, including cutbacks in Mr. Bush's latest budget proposals for housing, job training, health care and other social programs.
Pentagon officials want Congress to approve at least some of the supplemental funds before Capitol Hill's Easter recess begins April 10 to avoid what they say could be a critical shortfall in funds.
There is talk of splitting the requests into two bills: one for the war and a second for reconstruction. Some White House budget officials are pressing for two or even more measures because that would give them greater control over spending if the war turned out to be shorter and therefore less expensive than current Pentagon estimates. Parceling the requests over time also would give the administration political cover, because each would be relatively small.
But Pentagon officials favor a single bill to cover the war and a year of reconstruction, primarily to avoid an interruption in funding at the end of the fiscal year Oct. 1, as happened with reconstruction efforts in Afghanistan. A single bill also would help deliver on Mr. Bush's desire to begin humanitarian efforts as soon as military action begins. Officials already have spent millions shipping food and readying rebuilding plans.
The greatest variable in determining the conflict's total cost is its duration. A two-month war involving 250,000 troops -- about the number the U.S. is currently planning to deploy -- could cost about $40 billion, experts say. Each additional day of high-intensity fighting could cost as much as $500 million, a defense official said.
Although most of the war can be fought with stockpiles of existing weapons, those munitions must be replaced with new ones quickly. "We've got one or two other crises around the world," a senior defense official said, "and the issue becomes how quickly can we reconstitute absolutely necessary munitions."
Another wildcard is the Iraqi oil wells. American officials fear Mr. Hussein might set them ablaze, as he did in Kuwait near the end of the Persian Gulf War. The costs of repairing torched wells could be enormous. Kuwait spent about $4 billion rebuilding its oil fields. The supplemental requests don't include any money for repairing wells or cleaning up the potentially huge environmental mess associated with their destruction, so the total costs go even higher. "To make assumptions with respect to oil is to try to predict something you can't predict," said a senior defense official.
On the other hand, Iraq's oil reserves are second in size only to Saudi Arabia, and U.S. officials say money from them could be instrumental in rebuilding Iraq and could lower the total cost of the conflict. The supplemental requests now being readied assume "zero oil revenue" for the first year, officials said.
Another unknown is whether Mr. Hussein will fire chemical or biological weapons at U.S. troops. If he does, the troops would be forced to don restrictive suits and masks, which would slow their progress, lengthening the war and increasing its cost. Moreover, decontaminating military vehicles, replacing protective suits and the associated environmental cleanup also could be expensive. The requests currently don't include most costs associated with a large-scale chem-bio attack.
"Accounting for the use of weapons of mass destruction is very, very difficult," said a U.S. official.
Officials said it also is tough to estimate the cost of a peacekeeping force that would be needed following a conflict to keep Iraq's ethnic groups from killing one another. U.S. officials estimate that maintaining a peacekeeping force in Iraq for one year could cost between $6 billion and $20 billion, depending on the level of civil unrest and how much manpower other countries are willing to contribute.
Another question involves how much money allies are willing to contribute. If the U.S. is able to win the support of the United Nations Security Council for an Iraq invasion, it is more likely that allies will provide troops and money. Even if the U.S. does win U.N. backing, contributions from allies aren't expected to be as extensive as they were in the 1991 Gulf War.
A senior defense official involved in drawing up the supplemental requests said the Pentagon is pushing for as much flexibility as it can get in how it spends the money. If the war is short, the Pentagon wants to be able to shift money quickly from bombs and bullets to repairing oil wells, caring for refugees and rebuilding infrastructure.
As great as the uncertainties are over the money needed immediately, the long-term costs of the conflict are even more of a guessing game. They could run as high as $105 billion over five years simply for a peacekeeping force, said Steven Kosiak, an analyst at the Center for Strategic and Budgetary Assessments. Ultimately, much depends on whether the U.S. simply ousts Mr. Hussein and strips his government of its weapons of mass destruction, or whether it seeks to make Iraq a showcase of democracy-building.
"You can do the former with much less than the latter," he said.
-- Jeanne Cummings contributed to this article.
----
PAYING FOR WAR
The White House is weighing new spending bills for a war in Iraq, but experts say the ultimate costs could run even higher.
White House estimate
- Range: $60 billion to $95 billion for one year
- Includes: Conflict, one-year reconstruction and aid to affected countries
- Variables: Damage done, financial aid from allies
Independent estimate
- Conflict: $20-80 billion
- Peacekeeping: $25-105 billion (five years)
- Humanitarian assistance: $1-10 billion
- Cost of governance: (civil servants and police force) $5-12 bil.
- Reconstruction including oil fields: $10-105 bil.
- Aid to allies: $6-10 bil.
- Debt claims and reparations: $62-361 bil.