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Estimated Costs of Operation Desert Shield [i] (September 1990)

handle is hein.congrec/cbo9662 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Robert D. Relschauer U.S. CONGRESS Director WASHINGTON, D.C. 20515 September 7, 1990 ESTIMATED COSTS OF OPERATION DESERT SHIELD The Congressional Budget Office has prepared estimates of the cost of Operation Desert Shield. CBO estimates that costs in 1990 will be about $2.2 billion in budget authority and $1.7 billion in outlays. In 1991, costs would be about $7.6 billion in budget authority and $6.3 billion in outlays. However, the scope of the operation is unclear as far as costs are concerned, and all estimates are uncertain These estimates are based on the following assumptions. First, CBO assumed that the operation involves deploying about 210,000 people to Saudi Arabia (or to the Middle East more generally). Second, most forces are moved to the region from the United States in fiscal year 1990 and that they do not return until after fiscal year 1991. However, the estimates assume that personnel are rotated every six months. Third, except for Naval forces, operating tempo is little changed and there are no actual hostilities. CBO assumes that fuel prices will exceed baseline estimates by an average of $10 per barrel in 1990 and $5 per barrel in 1991. Finally, the estimate does not assume reimbursement from any other country nor does it assume any savings from recent DoD directives aimed at reducing costs not associated with Desert Shield. Table I shows CBO's estimates for Desert Shield's costs in 1990 and 1991. The table categorizes costs as one-time and recurring. Table 2 compares the CBO estimate with the most recent estimate from the DoD. (DoD's estimates of one-time versus recurring costs are not available). CBO estimates are based on an analysis of the DoD estimates, particularly a division of costs between one-time and recurring for 1990. This division of costs was based on judgments about the nature of costs in each cost category. Once recurring costs for 1990 were estimated, extrapolations were made for 1991. The largest differences between DoD and CBO estimates occurs in the costs of airlift and sealift in 1991. CBO includes much less than DoD for this category because it assumes that the movement of forces overseas--except for personnel rotations-is practically complete by the end of 1990. CBO was unable to ascertain why under such an assumption costs could be as high as DoD estimates. The other major difference is in added costs for military construction in 1991. The DoD includes $1.8 billion for construction of assorted facilities designed for a 24-month life. CR0 has no basis for estimating construction costs because it is not clear how long the deployment will last, what type of facilities might be desired, and what construction costs might be.

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