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Letter to the Honorable Kent Conrad: Estimated Costs of Continuing Operations in Iraq and other Operations of the Global War on Terrorism 1 (June 2004)

handle is hein.congrec/cbo10023 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas Holtz-Eakin, Director U.S. Congress Washington, DC 20515 June 25, 2004 Honorable Kent Conrad Ranking Member Committee on the Budget United States Senate Washington, DC 20510 Dear Senator: At your request, the Congressional Budget Office (CBO) has estimated the cost of the occupation of Iraq and other operations associated with the global war on terrorism (GWOT) for fiscal year 2005. CBO has also projected the potential 10-year costs of such operations under three scenarios that you specified. Assuming that the force level and pace of operations associated with the occupation of Iraq and other GWOT operations will remain at current levels throughout fiscal year 2005, CBO estimates that the Department of Defense (DoD) will likely require $55 billion to $60 billion in new budget authority to carry out those operations. If the disposition of forces or pace of operations were to differ from the assumed levels, the cost of operations would, of course, change accordingly. The estimate includes only the costs that DoD would incur above amounts budgeted for routine military operations, and does not include the costs for reconstruction activities carried out by DoD or other U.S. government agencies. CBO's estimate of such costs is uncertain for a number of reasons. DoD has provided little detail on actual costs to date. Standard models and cost factors used by CBO in preparing its estimate, though widely accepted, may not fully reflect the unique circumstances of each particular operation, and those circumstances change over time. It is also difficult to estimate the costs that DoD will attribute to those operations for support activities in the United States. CBO's past estimates of the cost of occupying Iraq and carrying out other GWOT operations have generally been lower than the amounts requested and obligated by DoD for those activities. For fiscal year 2004, DoD's obligations are likely to exceed CBO's estimate by more than 10 percent. If a similar difference occurred in fiscal year 2005, costs in that year could be a bit more than $60 billion. On the other hand, the reported obligation data for 2004 may include one-time costs for items such as base construction and procurement activities that will not be required in 2005. If so, obligations in excess of CBO' s estimate would be less likely. CBO also estimated the cost of three scenarios for the occupation of Iraq and GWOT operations using assumptions about the length of each operation and force levels specified in your request letter. Under the first scenario, the occupation force in fraq would increase to 190,000 servicemembers for the 2005-2006 period and then decline so that all U.S. forces would be removed from fraq by 2009. At that point, the only troops deployed overseas in support of the GWOT would be those stationed 1

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