Wed Jul 21, 7:21 PM ET
By Anna Willard
WASHINGTON (Reuters) - The Pentagon (news - web sites) said on Wednesday it may tap emergency funding for Iraq (news - web sites) and Afghanistan (news - web sites) earlier than requested as a congressional report found that the Bush administration underestimated war costs by $12.3 billion.
The report fueled criticism that the wars were badly planned and comes as Congress prepares to approve this week $25 billion in war funds that the White House requested for the 2005 fiscal year beginning Oct. 1. Those funds will become available when the legislation is passed.
But a Pentagon spokeswoman said the Defense Department may need to use that money earlier if Congress does not approve a request to divert unused money from other Pentagon accounts.
"If we do not get the ... reprograming, we will have to tap into the $25 billion earlier than fiscal year 2005," the spokeswoman said.
The report by Congress' investigative arm found that the Defense Department has been forced to shift funds from other uses, including pushing expenses from the 2004 fiscal year into 2005, in a move likely to boost war costs further down the line.
"Analysis ... suggests that anticipated costs will exceed the supplemental funding provided for the war by $12.3 billion for the current fiscal year," the report by the Government Accountability Office (GAO) said.
Congress approved an $87 billion emergency spending bill in October 2003 to finance military operations in Iraq and Afghanistan through the end of September.
Democrats estimate that the Pentagon has $5 billion left to fund the 2004 shortfall but will need to find $7 billion to cover it in the last two months of the fiscal year.
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"George W. Bush likes to call himself the wartime president, yet ... he has grossly mismanaged the war on terrorism and the war in Iraq," said a spokesman for Democratic presidential hopeful John Kerry (news - web sites).
"This latest report ... is another example of how George W. Bush planned for the best case scenarios and failed to prepare for the realities of war."
A Pentagon spokeswoman said it is hard to predict the exact cost of a war. "No one knows how long it's going to last and what nations will support it or end support."
The report warned that deferring activities planned for the 2004 fiscal year "adds to the requirements that will need to be funded in fiscal year 2005 and potentially later years and could result in a 'bow wave' effect in future fiscal years."
Democrats say the White House is trying to avoid using the $25 billion in the 2004 fiscal year to keep down the size of the record budget deficit ahead of the November election.
The White House is expected to seek a larger emergency spending bill after the U.S. election for Iraq and Afghanistan -- which Democrats say will top $50 billion.
The GAO also criticized the Pentagon for lack of transparency into how the money has been spent. The report said "large amounts" were reported as miscellaneous, providing little insight into where the money went.
Lawmakers have agreed to tighten controls and want monthly reports on the how the latest $25 billion will be used.
But, the GAO said, "additional actions are necessary."
In a separate report, the GAO criticized the Army and Halliburton for their logistics work in Iraq, citing the Army's poor planning and problems with the Texas contractor's cost controls.
(Additional reporting by Adam Entous)