fiscal responsibility

  1. Capping War Costs at Only $450 Billion

    Published: February 14th, 2012

    The president’s budget plan for fiscal year 2013, unveiled yesterday, includes $96.7 billion for war funding ($88.5 billion for the Department of Defense and $8.2 for State – see page 89 of the budget). The Afghanistan war accounts for almost all of the request – $88.9 billion.

    While the numbers themselves are interesting (interestingly high, that is), even more significant is the administration’s proposal to establish a cap on the war funds account:

    Leaving OCO [overseas contingency operations, or war costs] funding unconstrained could allow future Administrations and Congresses to use it as a convenient vehicle to evade the fiscal discipline that the BCA [Budget Control Act of 2011] caps require elsewhere in the Budget. With the end of our military presence in Iraq, and as troops continue to draw down in Afghanistan, this Budget proposes a binding cap on OCO spending as well. From 2013 through 2021, the Budget limits OCO appropriations to $450 billion. [Emphasis added. See page 26 of the president’s budget.]

    Before diving into the implications of the proposed cap, a couple of notes. First, the debt deal left a loophole for war costs, and that that loophole must be closed if policymakers are serious about getting nation’s fiscal house in order. Second, this is a cap, not a request. So $450 billion over the next nine years is a maximum; costs may not get that high.

    These caveats aside, take another look at the cap itself. The proposal would limit war costs to $450 over the next nine years, an average of $50 billion per year. That might seem like a good deal, until you remember that we have spent $570 billion on the Afghanistan war since 2001. Assuming most of the proposed $450 billion would be for Afghanistan, that would bring the cost of the war to over $1 trillion.

    Remember too that the Pentagon has announced plans to transition to local security forces by mid-2013. If the US combat role ends in 2013, what could possibly account for $450 billion in war costs through 2021?

    A couple of explanations come to mind. First, the drawdown plan for 2013 and beyond is still unclear. US troops’ combat role may be ending, but who knows how long the training mission will last, and how many troops will be left in Afghanistan to see it through. Estimates range from 5,000 to 30,000, according to Afghanistan’s former deputy interior minister.

    The second explanation isn’t much better. Troop levels alone are unlikely to account for $450 billion, meaning there will still be plenty of room for shady budgeting. Federal budgeters intend to keep doing what they’ve been doing all along, hiding non-war costs in the war budget. This has happened before – in 2012 alone some $7 billion was moved from the base defense budget to the war account. And it’s likely to happen again, with a cap as high as $450 billion.

    Capping war costs is a good step towards fiscal responsibility in the defense budget. But this cap still leaves plenty of room for unnecessary spending. More serious efforts to restrain spending are necessary.

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