Order Code RS21644
October 15, 2004
CRS Report for Congress
Received through the CRS Web
The Cost of Operations in Iraq, Afghanistan,
and Enhanced Security
Amy Belasco
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Summary
Since the 9/11 terrorist attacks, CRS estimates that the Department of Defense
(DOD) has received about $203 billion to cover the costs of combat operations,
occupation, and support for military personnel deployed or supporting operations in Iraq
and Afghanistan and for enhanced security at military installations. The total includes
$25 billion to cover some of DOD’s FY2005 costs. DOD is expected to request another
$50 billion or more for these operations in early 2005. If Congress approves those
funds, DOD funding for these purposes through FY2005 would exceed $250 billion.
While the Defense Department has provided an extensive amount of data, it has not
provided a full breakdown of the allocation of these funds. The estimates in this report
are based on data from DOD and from other sources. Of the $203 billion provided thus
far, DOD planned to spend about $121 billion for Iraq, $53 billion for Afghanistan, and
$23 billion for enhanced security, with an unallocated remainder of $6 billion
transferred from its regular appropriations for the “global war on terrorism.”
If funding requirements in FY2005 are similar to recent experience, DOD’s
cumulative costs are likely to reach about $162 billion for Iraq, about $59 billion for
Afghanistan, and about $27 billion for enhanced security by the end of the year.
Between FY2002 and FY2004, Congress also appropriated $20.9 billion for Iraq and
$3.7 billion for Afghanistan for reconstruction. Including reconstruction, by the end of
FY2005, estimated costs in Iraq would total about $183 billion and about $63 billion for
Afghanistan. State Department operations and embassy construction could add more.
Of the $203 billion provided to date, not including reconstruction assistance, DOD
had obligated — or contracted to spend — about $175 billion through the end of
FY2004, including about $107 billion for Iraq, $46 billion for Afghanistan, and $18
billion for enhanced security. If recent trends persist, DOD will obligate about another
$60 billion for Iraq in FY2005, bringing the total to more than $165 billion.
Congressional Research Service ˜ The Library of Congress

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CRS-2
Estimating Problems
Funds provided to DOD are not appropriated by military operation but rather by the
type of expense, e.g. funds to pay military personnel and to buy equipment. In the mid-
1990s, however, DOD developed a separate accounting system to track the cost of
contingencies, in which the services estimate the incremental cost for those operations
over and above normal peacetime expenses. Those costs are captured in monthly
accounting reports issued by the Defense Finance and Accounting Service (DFAS).1
The Defense Department has not submitted a report that shows all spending for Iraq,
Afghanistan, and enhanced security since the 9/11 attacks. CRS has relied on DFAS
reports, as well as other budget and accounting documents, several DOD briefings, and
congressional appropriations reports to estimate how costs are split among Iraq,
Afghanistan, and enhanced security (known as Operation Noble Eagle). There often are
inconsistencies, however, among these documents for reasons that are not always clear.
This report explains the assumptions underlying CRS estimates. Moreover, funds for war
and peacetime expenses are co-mingled in DOD accounts, making it difficult at times to
segregate expenses. If the Defense Department set up separate accounts for war and
occupation expenses, tracking would improve. As the United States enters its fourth year
in Afghanistan and its third year in Iraq, estimating future expenses is a growing concern.
DOD Funds for Afghanistan, Iraq, and Enhanced Security Total
$203 Billion To Date
Since September 11, 2001, the Department of Defense (DOD) has received about
$203 billion to cover the cost of combat, ongoing military operations, and occupation in
Afghanistan and Iraq, as well as enhanced security in the United States for defense
installations.2 These funds were provided in regular DOD and supplemental
appropriations measures enacted between FY2001 and FY2005 (see Table 1 below).3
1 Although DOD financial regulations guide the services in distinquishing between peacetime and
contingency costs, allocations may require judgement calls, as for example, when allocating the
costs of spare parts; see Volume 12, Chapter 23, “Contingency Operations,” in DOD Financial
Management Regulation, [http://www.defenselink.mil/comptroller/fmr/]. DFAS reports capture
obligations, i.e. amounts DOD contracts to spend, rather than outlays, which are the actual
amounts spent. Unlike other spending, DOD does not track outlays for contingencies.
2 This includes not only $196.9 billion in funds appropriated specifically for war and occupation
costs but also $5.9 billion in funds transferred from regular DOD appropriations because they
were no longer needed. For information about DOD transfers, see FY04-08-IR, 8/11/04, FY04-
81_IR_DWCF, 6/2/04, and FY04-32_PA_Omnibus, 8/16/04 at the following site:
[http://www.defenselink.mil/comptroller/execution/reprogramming/].
3 This total includes funds provided in DOD’s regular FY2003 appropriations act to “respond to,
or protect against, acts or threatened acts of terrorism against the United States,” for both
Afghanistan operations and additional force protection at home. See OMB, Fiscal Year 2003
Budget Appendix, p. 277; [http://www.gpoaccess.gov/usbudget/fy04/pdf/appendix/mil.pdf].
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Table 1. DOD’s Funding for Iraq, Afghanistan, and
Operation Noble Eagle, FY2001-FY2005
(billions of dollars)
Date of
Public Law
DOD
Name of Law
Enactment
Number
Fundinga
FY2001 Emergency Terrorism Response
9/18/01;
P.L. 107-38;
$16.5
Supplemental Appropriations Act and the
1/10/02
P.L. 107-117
FY2002 DOD Appropriations Act
FY2002 Emergency Supplemental
8/2/02
P.L. 107-206
$14.0
FY2003 DOD Appropriations Act
10/23/02
P.L.107-248
$7.1
FY2003 Consolidated Appropriations Resolution
2/20/03
P.L. 108-8
$10.0
FY2003 Emergency Supplementala
4/16/03
P.L. 108-11
$62.6
FY2004 DOD Appropriations Acta
9/30/03
P.L. 108-87
-$3.5
Transfers from FY2004 Regular Appropriationsb 9/30/03
P.L.108-87
$5.9
FY2004 Emergency Supplemental
11/6/03
P.L.108-106
$65.2
FY2005 DOD Appropriations Actc
8/5/2004
P.L.108-287
$25.0
Total Received Thus Far
—
—
$202.8
Expected FY2005 Supplemental
—
—
$50.0
Total if Likely FY2005 Supplemental is
—
—
$252.8
Enacted
Sources: CRS calculations based on public laws cited above. Totals may not add due to rounding.
Notes:
a.. Totals reflect budgetary resources available to DOD excluding funds transferred from DOD to other
agencies, contingent appropriations not approved, and rescissions, and including transfers from
peacetime funds.
b. In FY2004, DOD transferred $5.7 billion of funds from its regular appropriations to fund operations in
the “global war on terrorism,” and Congress transferred $226 million in FY2001 funds to FY2004.
c Congress provided $25 billion to DOD in Title IX of the FY2005 DOD regular appropriations act for
expenses related to Afghanistan and Iraq.
DOD’s Projected Funding For Iraq, Afghanistan, and Enhanced
Security, FY2001-FY2005
The estimates below show DOD’s projections of funding for Iraq, Afghanistan, and
enhanced security from appropriations received to date, including funds provided for the
first part of FY2005 in DOD’s regular appropriations bill (see Table 1). Including all
DOD funding received to date, Iraq is expected to cost about $121 billion, Afghanistan
about $53 billion, and DOD enhanced security about $23 billion. (Through FY2004,
projected funding for Iraq would total $99.6 billion.) (See Table 2).
Of the total $203 billion provided to date, the relative shares for each military
operation or mission are 26% for Afghanistan, 60% for Iraq, and 11% for enhanced

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security. Funding allocated by mission totaled $76.2 billion in FY2003 and $65.2 billion
in FY2004. Comparing allocations in those two years, Afghanistan’s share declines from
24% to 11% while Iraq’s share grows from 63% to 78%, the share for enhanced security
slips from about 12% to 11% . Unallocated funding goes from zero to 8%.
Table 2. Funding to Date for Iraq, Afghanistan and Enhanced
Security, FY2001- FY2005
(billions of dollars)
FY2003
FY2005
FY2001,
FY2002
FY2003
Regular
FY2003
FY2004
Regular
Military
P.L.107-38
Emerg.
Omnibus,
DOD
Emerg.
Supp,
DOD
Operation or
and
Supp
Total
P.L.108-
Approps,
Supp, P.L. P.L.108-
Approps,
Mission
P.L.107-
P.L.107-
11b
P.L.107-
108-7d
106d
P.L. 108-
117a
206
248c
287e
Afghanistan
11.9 12.5 10.0
3.0 5.1 7.1 3.5
53.2
Iraq
—
—
—
—
48.5
51.0
21.5
121.1
Enhanced
4.6
1.5
—
4.1
5.5
7.1
—
22.7
Security and
Othera
Total 16.5
14.0
10.0
7.1
59.1
65.2
25.0
196.9
Transfersf
—
—
—
—
—
5.9
—
5.9
TOTAL
16.5
14.0
10.0
7.1
59.1
71.1
25.0
202.8
Sources: CRS calculations based on data from the Department of Defense, congressional committee reports, and DOD
briefings.
Notes: Totals may not add due to rounding.
a. Allocation reflects DOD’s estimate, including $1.4 billion in intelligence funds allocated to Afghanistan. CRS includes
funding for Pentagon reconstruction and military construction under the category “Enhanced Security and Other.”
b. See H.Rept. 108-10, p. 1498, for the mission split in the FY2003 Omnibus appropriations act. Funding for
Afghanistan includes $3.9 billion for intelligence.
c. CRS used project descriptions in H.Rept. 107-732, the conference report on the FY2003 defense appropriations bill;
Office of the Secretary of Defense, Defense Emergency Response Fund, FY2003 Budget Estimates, February 2002;
and an appropriation account breakdown to allocate FY2003 regular funds. The CRS estimate assumes that
Military Personnel and Operation and Maintenance funding were allocated to enhanced security (e.g. for physical
and communications security on bases) and that procurement and Research Development, Test & Evaluation funds
were allocated to Afghanistan (e.g. for munitions replacement, unmanned aerial vehicles, and classified R&D).
d. For FY2003 and FY2004, CRS relied on DOD’s forecast of obligations. CRS included $1.7 billion in funding for
intelligence in totals for Iraq in FY2004 and $4.9B in FY2005. DOD’s FY2005 Budget Estimates, Justification
for Component Contingency Operations and the Overseas Contingency Operations Transfer Fund (OCOTF),
February 2004, included $5.3 billion in classified funding in totals for Iraq (see footnote e below).
e. DOD did not distribute funding requested in FY2005 among Iraq, Afghanistan, and enhanced security. Of the $25
billion total, Congress set aside $2.0 billion for intelligence and required that the remainder be spent only on Iraq
and Afghanistan. Based on FY2004, CRS allocated 85% for Iraq and 15% for Afghanistan with the intelligence
funding allocated to Iraq, as DOD did in FY2004. See Office of the Secretary of Defense, FY2005 Budget
Estimates, Justification for Component Contingency Operations and the Overseas Contingency Operations
Transfer Fund (OCOTF), p. 34; [http://www.defenselink.mil/comptroller/defbudget/fy2005/budget_justification
/pdfs/overseas/FY_2005_PB_Contingency_Operations_Justification.pdf].
f DOD transferred $5.9 billion from its regular appropriations for unanticipated expenses of the “global war on
terrorism.”
To some degree, these cost estimates reflect the pace of operations anticipated in
each theater. Most of the funding provided in FY2001 was obligated in FY2002 because
it was appropriated at the very end of the fiscal year. Combining FY2001 and FY2002
funding, the total for Afghanistan is $24.8 billion. In FY2003 after combat operations and

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the first year of occupation were completed, DOD projected that the cost of Afghanistan
would be $18.4 billion, a drop of about one-quarter. By FY2004, DOD figures project
that costs would fall to $7.1 billion. DOD apparently assumed that funding for
Afghanistan would drop sharply between FY2002 and FY2004.
In the case of Iraq, DOD’s projections are not easy to explain. Funding for Iraq was
projected to increase from $48.5 billion in FY2003 to $51.0 billion in FY2004 despite the
end of major combat operations and the fact that DOD planned to cut troop levels by
about one-third.4 If current trends continue, DOD’s cost for Iraq would be over $60
billion in FY2005, reflecting higher troops levels and more intense operations.5

DOD’s estimates of the cost of enhanced security are also difficult to explain. As
estimated by DOD, costs were expected to increase from $6.1 billion for FY2001 and
FY2002 in the year immediately after the September 11 attacks (when the push to
improve security at base installations was high and DOD was providing extensive combat
air patrol) to $9.6 billion in FY2003. In FY2004, DOD forecast that funding would drop
to $7.1 billion, $1 billion above the first year after the attacks. In its FY2004 Emergency
Supplemental, however, DOD estimated enhanced security would cost $2.2 billion.6
Trends in Obligations Reflect Unanticipated Changes
DOD obligations — funds contracted to be spent — are generally a better indicator
of trends than are DOD’s estimates of costs because they reflect changes made in response
to the situation on the ground. For example, estimates in DOD’s justification material for
the FY2004 Emergency Supplemental assumed that DOD would cut force levels in Iraq
from about 147,000 troops to about 99,000 troops by the end of the year.7 Instead, the
United States kept about 145,000 troops in Iraq for most of the year and increased troop
levels further this summer by about 10,000. More recently, 3,000 troops were added in
Afghanistan, bringing the total to about 18,000.8
4 The total for Iraq in FY2004 includes all intelligence funding. According to Office of the
Secretary of Defense, FY2005 Budget Estimates, Justification for Component Contingency
Operations and the Overseas Contingency Operations Transfer Fund (OCOTF), p. 34, DOD
allocated $5.3 billion in intelligence funding to Iraq and zero to Afghanistan, see p. 34 and p. 37;
[http://www.defenselink.mil/comptroller/defbudget/fy2005/budget_justification/pdfs/overseas
/FY_2005_PB_Contingency_Operations_Justification.pdf]. In FY2003, $3.9 billion in
intelligence funding was allocated to Afghanistan and $1.8 billion to Iraq.
5 The average monthly cost for Iraq in FY2004 was $5.2 billion including intelligence funding.
6 CRS used the $7.1billion included in DOD’s February 2003 forecast of obligations from the
FY2004 Emergency Supplemental rather than the $2.2 billion in its request, see Department of
Defense, FY 2004 Supplemental Request for Operation Iraqi Freedom (OIF), Operation
Enduring Freedom (OEF), and Operation Noble Eagle (ONE), September 21, 2003; see
[http://www.defenselink.mil/comptroller/defbudget/ FY_2004_Supplemental.pdf].
7 Office of the Secretary of Defense, Comptroller, Contingency Operations, Estimating - Funding
- Execution, February 2004, p. 23.
8 USA Today, “Army Begins Sending More Troops to Afghanistan,” September 23, 2004. In its
(continued...)

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While obligations data provides a better picture of cost trends over time, obligations
do not necessarily reflect the full costs of ongoing military operations and occupation
because contracts for investment items — to buy replacement equipment and munitions
— typically take a couple of years for contracts to be negotiated, and hence reporting of
those funds lag. As of the beginning of FY2005, for example, about $8 billion to $10
billion in funds provided in earlier years remains to be obligated.9 At the same time,
obligations in one year may tap funds provided in previous years.10 To get a sense of cost
trends, Table 3 shows obligations for Iraq, Afghanistan and enhanced security by the year
when funds are obligated.
According to these obligations data, by FY2004 Iraq consumed about $107 billion,
some $7 billion above the $100 billion anticipated in DOD plans (see Table 3). For
Afghanistan, obligations data suggest that costs declined less than DOD expected.
Between FY2002 and FY2004, obligations for Afghanistan declined by about half from
$20 billion to $10 billion, rather than from $24 billion to $7 billion as DOD anticipated.
Obligations for enhanced security, on the other hand, declined more than expected,
dropping to $4.1 billion in FY2004, $3 billion below the amount anticipated.11
Table 3. Obligations of Funds to Date for Iraq, Afghanistan and Enhanced
Security, FY2001-FY2004
(billions of dollars)
Percent of Total
Military Operation or
Cumulative
FY2001 FY2002 FY2003 FY2004
Cumulative
Mission
Obligations
F2004
Obligations
Afghanistan
0.4 19.5
16.2
9.6
45.7
13%
27%
Iraq
0.0 0.0 44.2 62.6
106.8
82%
63%
Enhanced Security and
0.1
7.5
6.3
4.1
17.9
5%
3%
Other
Total 0.5
27.0
66.7
76.2
170.4
100%
100%
Sources: CRS calculations based on data from the Department of Defense, Defense Finance Accounting Service reports,
DOD accounting reports, Congressional reports, and DOD briefings.
Notes: Totals may not add due to rounding.
8 (...continued)
cost estimate of Iraq of June 25, 2004, CBO estimated that about 256,000 military personnel
(active-duty and activated reservists) plus an additional 38,000 above authorized end strength
were dedicated to the global war on terrorism; see [http://www.cbo.gov/ftpdocs/55xx/doc5587/
Cost_of_Iraq.pdf].
9 CRS estimate is based on comparing obligations data to budgetary resources available.
10 As of July 31, 2004, for example, obligations included $4.2 billion in FY2003 funds and $55.3 billion
in FY2004 funds. Defense Finance and Accounting Service - Denver, Consolidated Department
of Defense (DoD) Terrorist Response Cost Report, FY2003 Supplemental Appropriation as of
July 32, 2440, p.24, and Consolidated Department of Defense (DoD) Terrorist Response Cost
Report FY 2004 Supplemental Appropriation as of July 31, 2004, p.52.
11 The $4 billion figure is above the $2.2 billion level in DOD’s FY2004 Emergency
Supplemental request.

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