Center for Arms Control and Non-Proliferation

CBO Says $1.765 Trillion to $2.365 Trillion for Iraq and Afghanistan by 2017

by Travis Sharp [contact information]

Published on Iraq Insider blog on October 24, 2007

Bottom line: According to testimony today by the Congressional Budget Office, if one includes debt service costs in long-term U.S. deployment scenarios, the total cost for U.S. operations in Iraq and Afghanistan will reach between $1.765 trillion and $2.365 trillion by 2017.

The chart below incorporates the debt service estimates, something CBO didn't provide in charts in its submitted testimony.

TABLE 1. CBO ESTIMATED COSTS OF U.S. OPERATIONS IN IRAQ AND AFGHANISTAN AND OF OTHER ACTIVITIES RELATED TO THE WAR ON TERRORISM UNDER TWO FUTURE SCENARIOS (BUDGET AUTHORITY IN BILLIONS OF DOLLARS)

	Funding to Date, 2001-2007	Scenario One: Number of Deployed Troops Reduced to 30,000 by 2010	Scenario Two: Number of Deployed Troops Reduced to 75,000 by 2013
Military Operations and Other Defense Activities	533	485	966
Indigenous Security Forces	30	50	50
Diplomatic Operations and Foreign Aid	39	26	26
Veterans' Benefits and Services	3	9	13
Debt Service	415	175	290
Total	1020	745	1345
TABLE NOTES Source: Congressional Budget Office, "Estimated Costs of U.S. Operations in Iraq and Afghanistan and of Other Activities Related to the War on Terrorism," submitted testimony before the House Budget Committee (October 25, 2007), pp. 2, 9.

The Congressional Budget Office (CBO) does not typically include debt service costs in its analyses. In direct response to a congressional request, however, CBO Director Peter Orszag provided a forecast of long-term debt service costs stemming from operations in Iraq and Afghanistan in his testimony before the House Budget Committee today (October 24, 2007). CBO's operating assumption was that all spending for these operations, both past and present, was financed by federal borrowing.

Today's CBO debt service estimate surpasses any that it issued previously. (See, for example, CBO's letter to Rep. John Spratt, July 13, 2006, pp. 9). Steven Kosiak of the Center for Strategic and Budgetary Assessments has previously pointed out that the global war on terror has been financed mainly by increasing deficit spending, estimating that including 10 year interest payments on war-related spending just through 2006 would add another $250 billion to the long-term total cost of the global war on terror. (See Steven Kosiak, testimony before the Senate Budget Committee, February 6, 2007, pp. 3).

Former Clinton administration budget official Linda Bilmes and Nobel Prize-winning economist Joseph Stiglitz have been predicting for some time that after including the long-term costs of caring for American veterans, total war spending could soar well above $2 trillion dollars. Bilmes also testified before the House Budget Committee this morning.

For recent Center analysis of ballooning war costs, see "White House War Funding Request Highlights Skyrocketing Pentagon Spending" (October 23), "Budgeting For War" (September 10), "Bush Won't Stop the Bucks" (August 30), and "The Bucks Never Stop: Iraq and Afghanistan War Costs Continue To Soar" (August 27).