Order Code RL33110
CRS Report for Congress
Received through the CRS Web
The Cost of Iraq, Afghanistan, and Other Global
War on Terror Operations Since 9/11
Updated March 14, 2007
Amy Belasco
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
The Cost of Iraq, Afghanistan, and Other Global War on
Terror Operations Since 9/11
Summary
With enactment of FY2007 appropriations, Congress has approved a total of
about $510 billion for military operations, base security, reconstruction, foreign aid,
embassy costs, and veterans’ health care for the three operations initiated since the
9/11 attacks: Operation Enduring Freedom (OEF) covering Afghanistan and other
counter terror operations, Operation Noble Eagle (ONE) providing enhanced security
at military bases, and Operation Iraqi Freedom (OIF), Iraq.
The $510 billion total includes the $70 billion in DOD’s regular FY2007 bill
intended to bridge the gap between the first part of the fiscal year and passage of a
supplemental as well as war-related appropriations for other agencies included in the
FY2007 Continuing Resolution (H.J.Res 20/P.L.110-5).
Of the $510 billion appropriated thus far, CRS estimates that Iraq will receive
about $378 billion (74%), OEF about $99 billion (19%), enhanced base security
about $28 billion (5%) with about $5 billion that CRS cannot allocate (1%).
Generally, about 90% of these funds are for DOD, about 7% for foreign aid programs
and embassy operations, less than 1% for medical care for veterans, and 1%
unallocated. DOD has not provided Congress with the cost of each operation for all
previously appropriated funds.
On February 5, 2007, the Defense Department submitted a $94.4 billion
FY2007 Supplemental request. If enacted, DOD’s total emergency funding for
FY2007 would be $163.4 billion or 40% more than the previous year and 50% more
than OMB estimated last summer. The Administration also requested about $3
billion for Iraq and $1 billion for Afghanistan in emergency foreign and diplomatic
operations funds. If the FY2007 Supplemental request is approved, total war-related
funding would reach about $607 billion including about $448 billion for Iraq, $126
billion for Afghanistan, $28 billion for enhanced security and $5 billion unallocated.
For FY2008, DOD requested $481.4 billion for its regular or baseline budget
and $141.7 billion for war costs. If Congress approves both the FY2007 and FY2008
war requests, total funding for Iraq and the Global War on Terror would reach about
$752 billion, including about $564 billion for Iraq, $155 billion for Afghanistan, $28
billion for enhanced security, and $5 billion unallocated.
Based on new data, CRS lowered its estimates for DOD’s average monthly
obligations for contracts and pay to $8.8 billion per month including about $7.4
billion for OIF, $1.4 billion for OEF. DOD reports that in FY2007 so far, spending
rose to $10 billion per month including $8.6 billion for Iraq and $1.4 billion for OEF.
The Congressional Budget Office estimates that additional war costs for the next
ten years could total about $472 billion if troop levels fall to 30,000 by 2010 or $919
billion if troop levels fall to 70,000 by about 2013. If these estimates are added to
already appropriated amounts, total funding for Iraq and the GWOT could reach from
about $980 billion to $1.4 trillion by 2017. This report will be updated as warranted.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
New DOD Figures and CRS Estimates of War Costs . . . . . . . . . . . . . . . . . . 1
Funding for Each Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Funding for each Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
FY2007 Supplemental and FY2008 War Cost Requests . . . . . . . . . . . . . . . . 4
The “Surge” in Troops and Naval Presence . . . . . . . . . . . . . . . . . . . . . . 5
FY2008 War Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Key War Cost Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Potential War Cost Issues for the 110th Congress . . . . . . . . . . . . . . . . . . . . . 6
How Urgent is Passage of the FY2007 Supplemental . . . . . . . . . . . . . . . . . 7
Trends in War Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Estimates for Iraq and Afghanistan and Other Operations . . . . . . . . . . . . . 10
CBO estimates of future costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Past Trends and Future Costs in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Past Trends and Future Costs in Operation Enduring Freedom . . . . . . 12
Past Trends and Future Costs in Enhanced Security . . . . . . . . . . . . . . 12
Difficulties in Explaining DOD’s War Costs . . . . . . . . . . . . . . . . . . . 12
Changes in the Troop Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Reliance on Reservists Falls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Changes in Military Personnel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Changes in Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Changes in Investment Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Special Funds and the Flexibility Issue . . . . . . . . . . . . . . . . . . . . . . . . 20
DOD Spending Thus Far . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Changes in Average Monthly Obligations . . . . . . . . . . . . . . . . . . . . . . 22
Total Obligations to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Average Cost Per Deployed Troop and Estimates of Future Costs . . . . . . . 24
Estimates of Future Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Major War Cost Issues in the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Transparency Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Gaps and Discrepancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Uncertainty About Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Congressional Ways to Affect Military Operations . . . . . . . . . . . . . . . . . . . 29
Assessing the FY2007 Supplemental: the Emergency Designation . . . . . . 31
DOD Changes Definition of War Costs . . . . . . . . . . . . . . . . . . . . . . . . 31
Procurement Requests In the FY2007 Emergency Supplemental . . . . 32
Front Loading Reset Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Modularity As An Emergency Expense . . . . . . . . . . . . . . . . . . . . . . . . 34
Growing the Force as a War Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Questions About War-Related Procurement Issues . . . . . . . . . . . . . . . 35
Potential Readiness Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Improving War Cost Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
List of Figures
Figure 1. Active-Duty and Reserve Shares of OIF/OEF Average Annual
Troop Levels, FY2003-Early FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
List of Tables
Table 1. Estimated War-Related Funding By Operation: FY2001 - FY2007
Supp and FY2008 Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Estimated War-Related Funding By Agency: FY2001 - FY2007
Supp and FY2008 Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Budget Authority for Iraq, Afghanistan, and Other Global War on
Terror (GWOT) Operations: FY2001-FY2007 Bridge . . . . . . . . . . . . . . . . . 8
Table 4. Average Troop Strength for Iraq, Afghanistan and other
Counter-Terror Operations and Enhanced Security in the United Statesa . . 13
Table 5. DOD’s War Budget Authority By Title: FY2003-FY2007
Supp Requesta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 6. DOD’s Obligations by Operation: FY2001-Nov. 2006 . . . . . . . . . . . . . 23
Table 7. Average Annual Cost Per Deployed Troop: FY2003-FY2006 . . . . . . . 24
Table A1. Defense Department, Foreign Operations Funding, and VA
Medical Funding for Iraq, Afghanistan and Other Global War on Terror,
and Enhanced Base Security, FY2001- FY2007 Bridge . . . . . . . . . . . . . . . 40
The Cost of Iraq, Afghanistan, and Other
Global War on Terror Operations Since 9/11
Introduction
Since the terrorist attacks of September 11, 2001, the United States has initiated
three military operations:
! Operation Enduring Freedom (OEF) covering Afghanistan and other
Global War on Terror (GWOT) operations ranging from the
Philippines to Djibouti that began immediately after the 9/11 attacks
and continues;
! Operation Noble Eagle (ONE) providing enhanced security for U.S.
military bases and other homeland security that was launched in
response to the attacks and continues at a modest level; and
! Operation Iraqi Freedom (OIF) that began in the fall of 2002 with
the build up of troops for the March 2003 invasion of Iraq and
continues with counter-insurgency and stability operations.
In the fifth year of operations since the 9/11 attacks, the cost of war is a major
concern including the total amount appropriated, the amount for each operation, average
monthly spending rates, and the scope and duration of future costs. For Congress to
assess the new FY2007 Supplemental and Department of Defense (DOD) war costs in
FY2008, conduct oversight of past war costs, and consider future alternatives for Iraq
that range from the temporary increase in troop levels proposed by the president to a
complete withdrawal, Congress needs considerably better information on costs than has
been provided in the past. For updates of action on the FY2007 Supplemental, see CRS
Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs,
and Other Purposes by Stephen Daggett et al.
New DOD Figures and CRS Estimates of War Costs
In its FY2007 Emergency Supplemental Request submitted February 5, 2007,
DOD reports total budget authority (BA) appropriated for Iraq and the Global War
on Terror (GWOT) as well as obligations that reflect contracts signed for goods and
services and pay for military and civilian personnel. According to DOD, BA
appropriated to date totals $455 billion. Of that amount, DOD reports that $372
billion has been obligated through November 2006. DOD estimates that obligations
are divided as follows:
! $276 billion for Iraq;
! $69 billion for Operation Enduring Freedom; and
! $27 billion for Operation Noble Eagle (enhanced security).
CRS-2
These figures reflect a DOD financial reporting system that allocates budget authority
by operation as funds are obligated, that is, when contracts are signed or personnel
are paid.1
Although this breakdown represents considerable progress for DOD in showing
how previously appropriated funds have been allocated among the three operations
— Iraq, Afghanistan and other counter-terror operations and enhanced security — it
fails to cover $27 billion for classified programs and at least $56 billion in funds for
operations, and repair or replacement of war-worn equipment still to be obligated.2
In the case of its new war requests for FY2007 Supplemental and FY2008
GWOT costs, DOD provides estimated breakdowns by operation for most of the
budget authority requested .3 For example, DOD estimates that the annual cost for
Iraq would reach $123.7 billion in FY2007 and $110 billion in FY2008 if its requests
are approved.4 Presumably, DOD could also allocate funds that have been
appropriated just as they have estimated the breakdown in their new requests on the
basis of ongoing operations and plans.
In this report, CRS estimates the allocation of all funds appropriated to DOD for
war costs rather than only those obligated thus far. Such estimates give Congress a
better sense of the current status of funding for each operation, and allows
comparisons between fiscal years. According to CRS calculations, appropriations
to date for DOD total $472 billion or about $17 billion more than DOD reports. This
difference probably reflects the fact that CRS includes funds all funds appropriated
to DOD for the Global War on Terror, as well as transfers from DOD’s regular funds
to finance unanticipated costs. CRS and CBO estimates are close.5
1 These reports are compiled by the Defense Finance Accounting Service (DFAS) monthly,
and are called, “Supplemental and Cost of War Execution Reports.”
2 See DOD, FY2007 Emergency Supplemental Request for the Global war on Terror,
February 2007, p. 93 and 94; hereinafter, DOD, FY2007 Supplemental;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_Emer
gency_Supplemental_Request_for_the_GWOT.pdf].
3 In its FY2007 and FY2008 war requests, DOD does not allocate $6 billion to $9 billion for
intelligence or for fuel for its baseline program to either OIF or OEF; CRS allocates these
amounts since they are requested as war funds; see DOD, FY2007 Supplemental, p. 94 and
DOD, FY2008 Global War on Terror Request, February 2007, p. 74;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2008_Glob
al_War_On_Terror_Request.pdf] hereinafter, DOD, FY2008 GWOT Request.
4 DOD, FY2008 GWOT Request, p. 74.
5 DOD does not appear to include about $7 billion appropriated in the FY2003 regular act
for GWOT or transfers of funds from DOD’s regular budget to GWOT after enactment that
are approved by the congressional defense committees. At the same time, DOD justification
material for its FY2007 and FY2008 war requests shows that budget authority for war fell
$2 billion short in FY2001 and $4 billion short in FY2004 — a gap presumably met by
transferring funds from its regular appropriations. CRS added $2 billion to its estimates to
reflect the $2 billion in transfers in FY2001. CBO’s estimates of war costs are about $4
(continued...)
CRS-3
To be complete and allow comparisons between years for each operation, CRS
estimates the allocation of some $100 billion in unobligated funds still to be spent or
unreported (e.g., for classified programs) using previous trends as a guideline. In
addition, CRS has compiled the funds allocated to Iraq and Afghanistan for foreign
and diplomatic operations and for VA medical costs for OIF/OEF veterans (see
Table 1 and Table 2).
Funding for Each Operation. According to CRS estimates, Congress has
appropriated about $510 billion in budget authority (BA) thus far for Iraq,
Afghanistan and enhanced security for DOD, the State Department and the
Department of Veterans’ Affairs. Based on these estimates, that total includes about
! $378 billion for Iraq (75%),
! $99 billion for Afghanistan and other counter terrorism operations
(20%),
! $27 billion for enhanced security (5%), and
! $5 billion that CRS cannot allocate (see Table 1 and Table 2).
Table 1. Estimated War-Related Funding By Operation:
FY2001 - FY2007 Supp and FY2008 Requests
(CRS estimates in billions of dollars of budget authority)
Operation FY01 FY03 FY04 FY05 FY06 FY07 Enacted: FY07 FY07 FY08Cum.:
a
b
b
& Total
&
Bdge
FY01- Supp Total Req. FY01-
FY02
FY07CR Req. with
FY08
& Bdgec
Req.
Req.
Iraq
0.0 53.0 76.0 84.5 101.0
63.7
378.2 69.9 133.6 115.9 564.0
OEF
20.8 14.7 14.5 20.8
19.7
8.4
99.0 26.7
35.1 29.0 154.6
Enhanced 13.0
8.0
3.7
2.1
0.8
0.0
27.6
0.0
0.0
0.0
27.6
Security
Unallocated
0.0
5.5
0.0
0.0
0.0
0.0
5.5
0.0
0.0
0.0
5.5
TOTAL
33.8 81.1 94.2 107.5 121.6
72.1
510.2 96.6 168.7 144.9 751.7
Annual
NA 140% 16% 14% 13%
NA
NA
NA
39% -14% NA
Change
Change
NA
NA 16% 33% 50%
NA
NA
NA 108% 79% NA
Since FY03
Notes and Sources: NA= Not Applicable. Numbers may not add due to rounding. Revised CRS
estimates reflect Defense Finance Accounting Service, Cost of War Execution Reports through
November 2006, new DOD obligations by operation in DOD, FY2007 Emergency Supplemental
Request for the Global War on Terror, February 2007, p. 93 and other data;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_Emergency_Su
pplemental_Request_for_the_GWOT.pdf]. See Table A1 for appropriations by public law and
transfers. For a further breakdown of agency spending by operation, see Table 3.
a. Includes $5.5 billion of $7.1 billion appropriated in DOD’s FY2003 Appropriations Act (P.L. 107-
48) for the global war on terror that CRS cannot allocate and DOD cannot track.
5 (...continued)
billion lower than CRS because it includes fewer transfers; see CBO, Letter to Senator
Conrad, “Estimated Funding for Operations in Iraq and the Global War on Terror,” February
7; [http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-CostOfWar.pdf].
CRS-4
b. Of the $24.9 billion provided in Title IX of the FY2005 DOD appropriations bill, CRS included
$2 billion in FY2004 when it was obligated and the remaining $23 billion in FY2005. Because
Congress made the funds available in FY2004, CBO and OMB score all $25 billion in FY2004.
c. Includes funds in Title IX, P.L. 109-289, FY2007 DOD Appropriations Act (H.R. 5631)
designated for war. CRS assumes levels in H.J. Res 20, P.L. 110-50, the year-long Continuing
Resolution based on the VA request for medical costs and the House-passed levels for foreign and
diplomatic operations. Agencies will be able to set country or programmatic levels.
Funding for each Agency. Of the $510 billion enacted thus far, about
$472 billion, the lion’s share or over 90% goes to the Department of Defense. DOD
regulations require that the services request incremental war costs, in other words,
costs in addition to regular military salaries, training and support activities, and
weapons procurement, RDT&E or military construction that are reflect war needs.
Incremental costs cover hostile fire or other combat-related special pays, activating
reservists, deployments, conducting war operations, and supporting troops overseas,
as well as repairing and replacing equipment worn out by war operations.
Table 2. Estimated War-Related Funding By Agency:
FY2001 - FY2007 Supp and FY2008 Requests
(CRS estimates in billions of dollars of budget authority)
By
FY01FY03 FY04 FY05 FY06 FY07
Total
FY07 FY07 FY08 Cum.:
Agency &
&
Bdge Enacted Supp. Total
Req.
FY01-
Total
FY02
Thru
Req.
with
FY08
FY07
Req.
Request
Bdge and
FY07 CR
DOD
33.0 77.4 72.5 102.5 116.8 70.0
472.2
93.4
163.4 141.7
707.2
State/AID
0.8
3.7 21.7
4.8
4.3
1.6
36.8
3.2
4.8
3.2
43.2
VA
0.0
0.0
0.0
0.2
0.5
0.5
1.2
0.0
0.5 NA
1.2
TOTAL
33.8 81.1 94.2 107.5 121.6 72.1
510.2
96.6
168.7 144.9
751.7
Sources: Public laws, Congressional appropriations reports, and CRS estimates; see also
Table 1.
Through FY2007 appropriations, the State Department and USAID together
received about $37 billion for reconstruction, embassy operations and construction,
and various foreign aid programs for Iraq and Afghanistan. The Veterans
Administration has received about $1.2 billion for medical care for veterans of these
operations.6
FY2007 Supplemental and FY2008 War Cost Requests
The Administration’s FY2008 budget includes a FY2007 Emergency
Supplemental request for $97 billion for war-related funding for Iraq and Afghanistan
including $93.4 billion for DOD and $4 billion for foreign and diplomatic operations.
6 This includes an estimate of the funding likely to be received by the State Department and
the VA under H.J.Res 20, P.L.110-5, the FY2007 Continuing Resolution. Those agencies
will have discretion to allocate funds for Iraq and Afghanistan needs. Foreign operations
activities are managed by both the State Department and USAID, which handles most U.S.
development assistance programs.
CRS-5
The DOD request is in addition to the $70 billion bridge fund for war already
included in DOD’s regular FY2007 appropriations act to cover the gap between the
beginning of the fiscal year and passage of the supplemental.7 If enacted, DOD
would receive $163.4 billion for FY2007 or 40% more than in FY2006, and 50%
higher than the $110 billion projected by OMB last summer.8
On March 9, 2007, the Administration submitted an amendment to the
FY2007 Supplemental mainly to cover the cost of sending additional troops to Iraq
and Afghanistan, offset primarily by shifting funds requested in the supplemental for
Navy and Air Force aircraft to the FY2008 war request. This appears to be a
response to a controversy that developed in response to a new CBO estimate that
from $9 billion to $27 billion — depending on whether troops stayed for six months
or twelve — could be needed for additional troops to support the additional combat
troops that the president announced would deploy to Iraq to establish security in
Baghdad.9
The “Surge” in Troops and Naval Presence. The FY2007
Supplemental included funding for the president’s proposal announced on January
10, 2007 to increase troops in Iraq by 21,500 to establish security in Baghdad and
Anbar province and to heighten naval presence in the Gulf by deploying an additional
carrier and extending one Marine Expeditionary Group “as a gesture of support to our
friends and allies in the area who were becoming very worried about Iran’s
aggressiveness” according to Secretary of Defense Gates.10
Unless Congress enacts specific restrictions, the president can use currently
available DOD funds to conduct military operations including the deployment of
additional troops. Funds for DOD are appropriated for particular types of expenses
— e.g., military personnel costs — rather than designated for particular operations
which gives the president leeway to conduct military operations as he sees fit.
Because these additional expenses were not part of plans when the funds were
appropriated, DOD will use up its available funds sooner than anticipated. The
Supplemental included $5.6 billion to cover these costs — $4.1 billion for the troop
increase intended to establish security in Baghdad and $1.5 billion for the additional
carrier group. The amended budget provides about an additional $1 billion for
support troops, primarily military policy to handle an anticipated increase in
detainees, and additional support considerably less than the CBO estimate.
Assuming the FY2007 supplemental is enacted, DOD can restore funds for other
activities that were temporarily tapped to fund the “surge.”
7 Department of Defense Press Release, President Bush’s FY2008 Defense Submission, “
Feb. 5, 2007.
8 See OMB, Fiscal Year 2007 Mid-Session Review, p. 6, which projects war costs of $110
billion in FY2007; [http://www.whitehouse.gov/omb/budget/fy2007/pdf/07msr.pdf].
9 CBO, Cost Estimate for Troop Increase Proposed by the president, 2-1-07
[http://www.cbo.gov/ftpdocs/77xx/doc7778/TroopIncrease.pdf].
10 House Armed Services Committee, transcript of hearing on “Fiscal 2008 Budget: Defense
Department,” Feb. 7, 2007, p. 45.
CRS-6
FY2008 War Request. In addition to its regular or baseline FY2008
budget request of $481.4 billion, DOD submitted a request for war costs of $141.7
billion to cover FY2008 war costs. That request reflects a requirement in the
FY2007 National Defense Authorization Act motivated by long-simmering
Congressional concerns about the limited visibility for war costs because funds are
provided primarily in supplementals.11
DOD’s FY2008 request is $21.7 billion or 13% less than the FY2007 total
primarily because of lower amounts for Iraq and Afghan security forces but is still
almost double the FY2004 amount. For the years beyond FY2008, the
Administration includes a placeholder figure of $50 billion in FY2009 and no funds
in later years.12
Key War Cost Questions
This CRS report is designed to answer the frequently asked questions below
as well as address the major war cost issues likely to be faced in the 110th Congress.
! How much has Congress appropriated for each of the three missions
since the 9/11 attacks — Operation Iraqi Freedom (Iraq), Operation
Enduring Freedom (Afghanistan and other Global War on Terror
operations), and Operation Noble Eagle (enhanced security for
defense bases) for defense, foreign operations, and related VA
medical care?
! How and why have average monthly DOD obligations changed over
time for each mission?
! What are potential future spending levels under various scenarios
ranging from an increase in troop levels to a withdrawal of forces?
This report provides CRS estimates of the amount appropriated for each of the three
missions to date, average obligations per month, and other measures of costs (see
below).
Potential War Cost Issues for the 110th Congress
In addition to debate about the new surge proposal, the 110th Congress may
face several other major war cost issues such as:
! how to ensure transparency in war costs;
! how to use Congressional funding mechanisms to affect policy
options for Iraq;;
! how to decide which DOD costs qualify as emergency war costs and
which should be considered part of DOD’s regular baseline budget,
11 See Section 1008, P.L.109-364, FY2007 National Defense Authorization Act.
12 Office of Management and Budget, FY2008 Historical Tables, Table 5.1.
CRS-7
particularly for reconstitution or reset — the repair and replacement
of war-worn equipment; and
! how to judge and respond to readiness problems that stem from war
operations;
Grappling with these issues is more difficult because DOD has provided
limited information about prior war costs making trends difficult to decipher and
explanations unlikely to be available. GAO, CBO, and CRS have all raised concerns
about these problems in reports and testimony. There are also many unresolved
discrepancies and gaps in reported DOD figures.
War-related issues may be joined in consideration of the FY2007
supplemental request that Congressman Murtha, Chair of the House Subcommittee
on Defense, Appropriations, plans to bring to the floor by late March 2007. In
previous years, there has been considerable pressure to enact supplemental war funds
quickly to ensure that there is adequate support for the troops. It is not clear whether
the national defense authorizing committees will choose to authorize funds in the
FY2007 Supplemental in advance of the supplemental.
How Urgent is Passage of the FY2007 Supplemental
In past years, Congress has been under pressure from the Army to pass
supplementals quickly in order to ensure that the Army will have enough funds for
both its wartime and peacetime operations. The FY2006 Supplemental was enacted
in mid-June 2006, which the Army claimed created considerable management
problems. The Army is currently claiming that the supplemental needs to be enacted
by the end of April to avoid such problems.13
In this year’s bridge fund, however, Congress provided $28.4 billion to meet
the Army’s operational needs, some $7 billion higher than last year’s bridge fund.
The additional funds could reduce the pressure to pass the supplemental quickly.
Using DOD data, CRS estimates that the Army could cover its operational costs till
about June or July 2007 by using war funds in the bridge, temporarily transferring
procurement funds to operations, and tapping monies in its baseline budget that
would not be needed until the end of the year.14
13 Army Budget Office, “OMA FY07 Spending Projections,” February 5, 2007.
14 The CRS estimate assumes that the Army spends above the FY2006 rate but less than the
full amount requested in FY2007, and that Congress approves transfers of regular funds to
temporarily fund Army costs, tapping the $3 billion in DOD’s special transfer authority in
the FY2007 bridge fund and the $4.5 billion in general transfer authority for its regular
FY2007 funds (see sections 9003 and 8005, P.L. 109-289). In the first quarter of the fiscal
year, the Army obligated $19 billion or at about $6 billion per month.
CRS-8
Trends in War Funding
The total cost for all three operations — Iraq, Afghanistan, and other GWOT
and enhanced security — has risen steeply since the 9/11 attacks primarily because
of higher DOD spending in Iraq. Annual war appropriations more than doubled from
about $34 billion in FY2001/FY2002 to about $80 billion with the preparation for
and invasion of Iraq in FY2003 (see Table 1 and Table 3). If DOD’s FY2007
request is approved, annual funding would double again between FY2004 and
FY2007 reaching $167 billion for DOD and other agencies.
Table 3 estimates the breakdown of war-related funds for each operation and
each agency by fiscal year. DOD’s funding covers not only operational costs but also
replacing and upgrading military equipment, converting units to new modular designs,
training Afghan and Iraqi security forces, providing support to allies and enhanced
security at DOD bases. Foreign and diplomatic operations cover the cost of
reconstruction, building and operating embassies in Iraq and Afghanistan and various
foreign aid programs.
Table 3. Budget Authority for Iraq, Afghanistan, and Other
Global War on Terror (GWOT) Operations:
FY2001-FY2007 Bridge
(CRS estimates in billions of budget authority)
Cum.
Total
FY01
FY07
Enacted
By Operation and
&
Bdge/
thru FY07
Funding Source
FY02a FY02
FY03
FY04 FY05 FY06 Regular
Bridge
OPERATION IRAQI FREEDOM (OIF)b
Department of Defense
0
0
50.0
56.4
82.3 97.5
62.7
348.9
Foreign Aid and
Diplomatic Opsc
0
0
3.0
19.5
2.0
3.2
0.6
28.2
VA medicald
0
0
0
0
0.2
0.4
0.5
1.1
Total: Iraq
0.0
0.0
53.0
76.0
84.5 101.0
63.7
378.2
OPERATION ENDURING FREEDOM (OEF)/Afghanistan and GWOT
Department of Defense
9.0
11.0
14.0
12.4
18.0 18.6
7.3
90.3
Foreign Aid and
0.3
0.5
0.7
2.2
2.8
1.1
1.0
8.6
Diplomatic Opsd
VA Medicale
0
0
0
0
0
0.0
0.1
0.1
Total: OEF
9.3
11.5
14.7
14.5
20.8 19.7
8.4
99.0
Enhanced Security (Operation Noble Eagle)
Department of Defense
7.0
6.0
8.0
3.7
2.1
0.8
NA
27.6
Total: Enhanced
Securityf
7.0
6.0
8.0
3.7
2.1
0.8
NA
27.6
DOD Unallocated
0.0
0.0
5.5
0.0
0.0
0.0
0.0
5.5
ALL MISSIONS
Department of Defense
16.0
17.0
77.4
72.5 102.5 116.8
70.0
472.2
Foreign Aid and
Diplomatic Operationsd
0.3
0.5
3.7
21.7
4.8
4.3
1.6
36.8
VA Medicale
0
0
0
0
0.2
0.5
0.5
1.2
Total: All Missions
16.3
17.5
81.1
94.2 107.5 121.6
72.1
510.2
CRS-9
Notes and Sources: Numbers may not add due to rounding. Because DOD has not provided a
breakdown by operation for all appropriations received, CRS estimates unobligated budget authority
using past trends as shown in DOD’s Defense Finance Accounting Service (DFAS) reports,
Supplemental & Cost of War Execution Reports, through November 2006 and other information.
request. Revisions in this update also reflect new DOD information in DOD, FY2007 Emergency
Supplemental Request for the Global war on Terror, February 2007, p. 93;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_Emergency_Su
pplemental_Request_for_the_GWOT.pdf]. CRS budget authority (BA) totals are higher than shown
by DOD in Figure 1 in its FY2007 Supplemental Request because CRS includes all funding provided
in supplementals, bridge funds or baseline appropriations for Iraq and the Global war on Terror as well
as transfers from DOD’s baseline funds for GWOT requirements. CRS also splits the $25 billion
provided in the FY2005 Title IX bridge between the $1.8 billion obligated in FY2004 and the
remainder available for FY2005; all those funds are scored as FY2004 because they were available
upon enactment in August 2005. Includes funds provided in P.L. 107-38, the first emergency
supplemental after 9/11, and funds allocated in P.L. 107-117. Foreign operations figures were
prepared with the help of CRS analysts Larry Nowels, Connie Veillette, and Curt Tarnoff.
a. CRS combined funds for FY2001 and FY2002 because most were obligated in FY2002 after the
9/11 attacks at the end of FY2001.
b. DOD’s new estimate for Iraq shows BA from FY2003 as $48 billion, $2 billion higher than
reported by DFAS, suggesting an unidentified source for these funds.
c. CRS estimates reflect House-passed levels; the State Department can set country levels under the
FY2007 Continuing Resolution, HJ Res 20/P.L.110-5.
d. Foreign operations figures include monies for reconstruction, development and humanitarian aid,
embassy operations, counter narcotics, initial training of the Afghan and Iraqi army, foreign military
sales credits, and Economic Support Funds.
e. CRS assumes VA will follow its request in allocating funds for medical care for veterans of Iraq and
Afghanistan under the FY2007 Continuing Resolution, H.J.Res 2, P.L.110-5.
f. Known as Operation Noble Eagle, these funds provide higher security at DOD bases, support
combat air patrol, and rebuilt the Pentagon.
Over 90% of DOD’s funds were provided as emergency funds in
supplemental or additional appropriations; the remainder were provided in regular
defense bills or in transfers from regular appropriations.15 Emergency funding is
exempt from ceilings applying to discretionary spending in Congress’s annual budget
resolutions.16 Some members have argued that continuing to fund ongoing
operations in supplementals reduces Congressional oversight. Generally, much of
foreign and diplomatic funding has been funded in regular rather than emergency
appropriations.17
15 These funds were characterized as “additional appropriations,” and put in a separate title
of DOD’s regular appropriation bill in FY2005, FY2006, and FY2007. For discussion of
using regular vs. supplemental appropriations for war funding, see CRS Report RS22455,
Military Operations: Precedents For Funding Contingency Operations in Regular or in
Supplemental Appropriations Bills, by Stephen Daggett.
16 The FY2005 and FY2006 budget resolutions exempted up to $50 billion in overseas
contingency operations funds from budget controls (see Section 403, H.Con.Res. 95
(FY2005) and Sec. 402, S.Con.Res. 95 (FY2006). Congress did not pass a budget resolution
in FY2007.
17 The exception is FY2004 when Congress appropriated $20 billion for reconstruction in
the supplemental.
CRS-10
Estimates for Iraq and Afghanistan and Other Operations
How much has Congress provided for each of the three operations launched
since the 9/11 attacks — Iraq, Afghanistan and other GWOT, and enhanced security?
Using a variety of sources and methods, CRS estimated the distribution of war-
related funds appropriated for defense, foreign operations, and VA medical costs
from the 9/11 attacks through the FY2006 supplemental request (see Table 3). With
passage of the FY2007 bridge fund (H.R. 5631/P.L. 109-289), CRS estimates that
war-related appropriations enacted to date total about $510 billion allocated as follow
! $378 billion for Iraq (or 75%);
! $99 billion for Afghanistan (or 19%);
! $27 billion for enhanced security (5%); and
! $5 billion unallocated (1%) (see Table 3).
Since the FY2003 invasion, DOD’s war costs have been dominated by Iraq.
Costs for OEF has risen in recent years as troop levels and the intensity of conflict
have grown. The cost of enhanced security in the United States has fallen off from
the earlier years which included initial responses to the 9/11 attacks. Foreign
operations costs peak in FY2004 with the $20 billion appropriated for Iraq and
Afghan reconstruction and then run about $3 billion to $4 billion a year.
Although some of the factors behind the rapid increase in DOD funding are
known — the growing intensity of operations, additional force protection gear and
equipment, substantial upgrades of equipment, converting units to modular
configurations, and new funding to train and equip Iraqi security forces — these
elements are not enough to explain the size of the increases. Until this year, DOD
has provided little explanation in its requests.
The two new pending requests — FY2007 DOD Emergency Request and the
FY2008 Global War on Terror (GWOT) request — provide more justification
material than previously. In FY2009, the Administration includes a $50 billion
placeholder figure for war costs and no funds in later years.
CBO estimates of future costs. Based on two illustrative scenarios
assuming a more and less gradual drawdown in deployed troop levels, CBO
estimated the cost of all three operations for the next ten years from 2007-2017.
According to those estimates, the cost of Iraq and GWOT operations could cost an
additional:
! $472 billion if troop levels fell to 30,000 by 2010; or
! $919 billion if troop levels fell to 75,000 by 2013.
This CBO estimate does not provide split funding for Iraq and Afghanistan. CBO
stated that future costs were difficult to estimate because DOD has provided little
detailed information on costs incurred to date, and does not report outlays, or actual
expenditures for war because war and baseline funds are mixed in the same accounts.
CRS-11
Nor is information available on many of the key factors that determine costs such as
personnel levels or the pace of operations.18
Both CBO scenarios assume a gradual drawdown in forces over the next ten
years. The Administration has not provided any long-term estimates of costs despite
a statutory reporting requirement that the president submit a cost estimate for
FY2006-FY2011 that was enacted in 2004.19
Past Trends and Future Costs in Iraq. How has funding for Iraq
changed over time and what is the outlook for the future? CRS estimates that Iraq
will receive funding totaling about $378 billion as of funds appropriated for FY2007
in DOD’s regular FY2007 appropriations act (P.L. 109-289) and the FY2007
Continuing Resolution (H.J.Res 20, P.L. 110-5). War costs in Iraq have risen sharply
from initial funding to deploy troops starting in the fall of 2002 (presumably drawn
from DOD’s regular appropriations since supplemental funds were not available) to
an estimated $97.5 billion for FY2006, the last complete year of funding.
Future Iraq Costs. CRS estimates that the annual total for Iraq in FY2007
would increase to $134 billion if the FY2007 Supplemental request is approved (see
Table 1 and Table 2).20 That would be an increase of about 39% from last year and
about 150% above the level of funding in the first year, FY2003. The FY2008 DOD
war request includes $113 billion for Iraq, $21 billion less than in FY2007 with the
decrease presumably reflecting the end of “surge” funds.
In response to a request last summer, CBO estimated the cost of two
alternative scenarios for Iraq for FY2007- FY2016 with costs ranging from:
! $202 billion if all troops are removed by the end of 2009; and
! $406 billion if the number of deployed troops falls to 40,000 by
2010.21
CBO has not estimated the cost of withdrawal separately.
18 Letter to Chair, Senate Budget Committee, Kent Conrad, “Summarizing and projecting
fundinf for Iraq and GWOT under two scenarios,” Feb. 7, 2007, Table 1 and p.2 - p.3;
[http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-CostOfWar.pdf]. See also, CBO,
Statement of Robert A. Sunshine, Assistant Director, before the House Budget
Committee,”Issues in Budgeting for Operations in Iraq and the War on Terrorism,” Jan. 18,
2007.
19 Sec. 9012 required that the president submit an estimate for FY2006-FY2011 unless he
submitted a written certification that national security reasons made that impossible; the
Administration did not submit a waiver but then-OMB Director, Joshua B. Bolten sent a
letter on May 13, 2005 to Speaker of the House J. Dennis Hastert saying that an estimate
was not possible because there were too many uncertainties.
20 CRS estimates the allocation of about $9 billion in funding requested in the FY2007
Supplemental for classified programs and for baseline fuel that DOD does not include for
either OIF or OEF.
21 CBO, Letter to Congressman John M. Spratt, Jr, “Estimated funding for two specified
scenarios for Iraq over the period 2007-2016,” July 13, 2006, Table 1;
[http://www.cbo.gov/ftpdocs/73xx/doc7393/07-13-IraqCost_Letter.pdf].
CRS-12
Past Trends and Future Costs in Operation Enduring Freedom.
How has funding for Afghanistan and other Global War on Terror Operations
changed over time and what does the future hold? To date, Afghanistan has received
about $99 billion in appropriations for DOD, foreign and diplomatic operations, and
VA medical. In recent years, funding for Afghanistan has risen to about $20 billion
annually (see Table 3). If DOD’s FY2007 Emergency Supplemental is approved by
Congress, annual funding for Afghanistan would jump by about 75% from $20
billion to $34 billion (see Table 1).
Increases in previous years reflect higher troop levels, the cost to train Afghan
forces, and part of the cost of upgrading and replacing equipment and converting
Army and Marine Corps units to a new modular configuration. Some of the $14
billion increase in the FY2007 supplemental reflects a $5.5 billion increase in funds
to equip and train Afghan security forces ($1.9 billion in FY2006 to $7.4 billion in
FY2007). The reason for the rest of the increase is not clear. In its March 9, 2007
amendment to the FY2007 supplemental, the Administration requests an additional
$510 million for 7,200 additional troops for operations and to train Afghan security
forces.
Past Trends and Future Costs in Enhanced Security. How has the
cost of Operation Noble Eagle or enhanced security for DOD bases changed since
9/11? Funding for enhanced base security and other responses to the initial attacks
fell from the $12 billion available in the first year after the attacks to $8 billion in
2003 as one-time costs like Pentagon reconstruction ($1.3 billion), some security
upgrades were completed, DOD scaled back combat air patrol (about $1.3 billion for
around-the-clock coverage), and the services cut the number of reservists guarding
bases.22 In FY2004, the cost of enhanced security almost halved again, dropping to
$3.7 billion.
Beginning in FY2005, DOD funded this operation in its baseline budget
rather than in supplementals and costs have fallen to under $1 billion in FY2006
(See Table 3). The services are now requesting funds for base security in the United
States, which could overlap with the enhanced security mission.
Difficulties in Explaining DOD’s War Costs
What makes war costs change? Changes in war costs would be expected to
vary with the number of troops, war-related benefits for those troops, the intensity
of operations, and levels of basing and support. The extent of competition in
contracts and the price of oil would also be expected to affect the prices of goods and
services purchased by DOD.
22 DOD’s new estimate for ONE if $8 billion rather than the $6.5 billion shown in an earlier
DOD briefing. For more information, see CRS Report RL31187, Combating Terrorism:
2001 Congressional Debate on Emergency Supplemental Allocations, and CRS Report
RL31829, Supplemental Appropriations FY2003: Iraq Conflict, Afghanistan, Global War
on Terrorism, and Homeland Security, both by Amy Belasco and Larry Nowels.
CRS-13
Important war cost drivers would be expected to include:
! the number of troops deployed or anticipated to deploy;
! changes in the pace of operations or optempo;
! changes in the amount of equipment and number of personnel to
be transported to the theater of operations;
! whether support is designed to be temporary or longer-term;
! force protection needs;
! how quickly equipment breaks down and how quickly it is to be
replaced or upgraded; and
! military basing plans that underlie construction requests.
Troop levels would be expected to be the basic underlying factor that determines the
cost of military activities and support ranging from the number of miles driven by
trucks (which, in turn, affects how quickly trucks break down), purchases of body
armor (varying with the threat), or meals served and housing provided. Troop levels,
however, have risen far less than costs.
Changes in the Troop Strength. In testimony and supplemental
requests, DOD typically cites the number of “boots on the ground” at a particular
time to illustrate military personnel levels. For example, DOD figures show that
there were about 139,000 troops in Iraq and 19,000 in Afghanistan or about 158,000
as of October 1, 2006.23 Similar figures are cited by DOD witnesses in hearings.
This figure, however, does not include all troops in the region deployed for
OIF or OEF operations or capture the annual average as troops rotate in and out of
the theater during the year. Nor does it capture activated reservists in the United
States who are training, backfilling for deployed troops, or supporting DOD’s
enhanced security (ONE) mission. For these reasons, “boots on the ground” figures
understate the number of military personnel dedicated to these operations.
Table 4. Average Troop Strength for Iraq, Afghanistan and
other Counter-Terror Operations and Enhanced Security
in the United Statesa
(in thousands)
By Service
FY01
FY02
FY03
FY04
FY05
FY06
Oct/Nov.
2006
Average Deployed
51
78
226
220
259
269
257
Army
8
17
110
144
167
176
162
Navy
29
30
42
25
29
32
37
Marine Corps
0
4
32
25
36
34
30
Air Force
15
27
41
26
27
27
27
Activated Reserves
NAc
47
87
84
64
49
46
State-sideb
All OIF/OEF/ONE
51
125
313
304
323
319
302
Military Personnel
23 DOD, Information Paper, “Congressional Research Service Request for Boots on the
Ground (BOG) Statistics for Iraq and Afghanistan, January 1, 2007,” 1-2-07.
CRS-14
Notes and Sources: a. Average strength computed by the Defense Manpower Data Center by totaling
the number of days deployed for each service member in a year and then dividing that figure by the
365 days in the year.
b. Activated reservists in the United States are training up for deployments, backfilling the positions
of deployed active-duty personnel, or providing enhanced security at U.S. installations.
c. Not available.
For example, in FY2006, average troop strength was some 319,000 for
operations in Iraq, Afghanistan and other counter-terror operations or almost twice
as high as “boots on the ground” figures. In its new supplemental request, DOD cites
about 320,000 for its troop strength in FY2007, acknowledging the higher troop
levels for the first time.24
Between FY2004, the first year of occupation, and FY2007, average troop
strength for all three missions is projected to grow by only 5% — from 304,000 to
319,000 while costs would more than double — from $73 billion to $163 billion (see
Table 2) — if the FY2007 supplemental is approved.
Some would argue that the average number of deployed troops dedicated to
Iraq and GWOT operations would be provide a better metric to explain war costs
because those are the troops carrying out ongoing operations. Under this reasoning,
reservists in the United States — whether training up or backfilling — are considered
the support tail for deployed troops.
Between FY2004 and FY2006, average deployed troop strength increased
from 220,000 to 270,000 or by about 20% whereas funding levels increased by 60%
(see Table 5). If the 21,000 troops for the president’s troop increases are added to
average strength in FY2006 level, troop strength could reach 290,000 in FY2007, a
30% increase from FY2004 and the highest level thus far. At the same time the
Administration is proposing funding for FY2007 that is more than double the amount
in FY2004. Changes in troop strength do not explain such increases. DMDC does not
show average troop strength data by operation.
24 DOD, FY2007 Emergency Supp, p. 16. [http://dod.mil/comptroller/defbudget/
fy2008/fy2007_supplemental/FY2007_Emergency_Supplemental_Request_for_the_GWOT.pdf].
CRS-15
Table 5. DOD’s War Budget Authority By Title:
FY2003-FY2007 Supp Requesta
(in billions of dollars)
Total
FY07 FY03-07 FY07 FY07
Title
FY03 FY04 FY05 FY06 Bdge Enacted Req. w/
Req.
Military Personnel
15.9
17.9
19.7
16.7
5.4
75.7
12.1
17.5
Operation &
46.5
42.7
49.0
61.5
39.2
238.9
39.3
78.5
Maintenance/Health/Otherb
Working Capital
1.1 1.6
3.0
3.0
0.0
8.8
1.3
1.3
Fund/National Sealift Fdc
Procurement
9.5
7.2
17.3
21.5
19.7
72.8
24.9
44.6
Research, Dev., Testing &
2.4
0.4
0.6
0.8
0.4
4.6
1.4
1.9
Evaluation
Military Construction
0.9
0.5
1.2
0.2
0.0
2.8
1.9
1.9
Subtotal: Regular Titles
76.4
70.3
90.9 103.7
64.7
403.7
80.9 145.6
Special Funds and Transfer Caps
Iraqi Freedom Fund (IFF)g
[10.4]
2.0
3.8
3.3
0.2
6.0
0.2
0.2
Afghan Sec. Forces
0.0
0.0
1.3
1.9
1.5
4.7
5.9
7.4
Training Fund
Iraq Security Forces
0.0
[5.0]
5.7
3.0
1.7
15.4
3.8
5.5
Training Fundd
Joint Improvised Explosive
0.0
0.0
0.0
3.3
1.9
5.2
2.4
4.3
Device Defeat Funde
Coalition Support Capf
[1.4]
[1.2]
[1.2]
[.9]
[.9]
[4.2]
[1.0]
[1.9]
Commanders Emergency
[0.0]
[.2]
[.8]
[.9]
[.5]
[2.4]
[.5]
[1.0]
Response Capf
Natural Resources
0.8
0.0
0.0
0.0
0.0
0.8
0.0
0.0
Remediation Fund
(NRRF)e
Intell. Comm. Mgt Fundh
0.0
0.0
0.3
0.2
0.0
0.5
0.1
0.1
Special Transfer Authorityi [2.0]
[3.0]
[3.0] [4.5]
[3.0]
NA
[3.5]
[6.5]
Subtotal: Special Fundsj
[10.4]
2.0
11.0
11.5
5.2
NA
12.4
17.6
Totala
77.4
72.3 101.9 115.4
70.0
434.1
93.6 163.4
Notes and Sources:
a. Figures for FY2007 request reflects figures in OMB, FY2008 Appendix as submitted on Feb. 5,
2007; does not reflect March 9, 2007 amendment or figures in DOD’s request, some of which
differ from OMB’s appendix. CRS could not break out all funds appropriated in
FY2001/FY2002 because about half of FY2001/FY2002 funds were spent directly from the
Defense Emergency Response Fund (DERF) and not split out by title. Includes funds
appropriated in supplementals, bridge funds, regular and consolidated appropriations, and later
transfers from DOD’s regular appropriations to meet war costs; includes $7.1 billion in DOD’s
regular FY2003 appropriation act that DOD does not appear to track. For FY2003, funds
appropriated to the Iraq Freedom Fund are shown as transferred. Excludes the $30 billion
appropriated in FY2001 and FY2002 primarily in the Defense Emergency Response Fund
(DERF) rather than regular accounts. Includes funds for enhanced security (Operation Noble
Eagle) that were originally funded in supplementals but then moved to DOD’s baseline budget
starting in FY2005.
b. “Other” includes counterdrug and Office of Inspector General funds.
c. Working capital funds finance unanticipated increases in support costs such as fuel.
CRS-16
d. Training Iraqi security forces was initially funded in the State Department [ shown in brackets ]but
is now funded in DOD; total includes State Dept. funds.
e. Congress set up the Joint IED Defeat Fund, a transfer account to finance procurement, RDT&E,
and operation and maintenance solutions to meet IED attacks. DOD set up the NRRF in the
FY2003 Supplemental (P.L. 108-11) to fund anticipated damage to Iraq’s oil facilities.
f. Congress sets caps in general provisions that limit the total amount that can be spent on coalition
support to countries helping in the global war on terror and on the CERP, a program where
individual commanding officers can provide funds for small-scale reconstruction projects in
Iraq and Afghanistan.
g. IFF funds exclude amount provided for Improvised Explosive Device Defeat Fund, shown
separately.
h. Appropriated in the DOD appropriations act for CIA headquarters activities.
i. Congress sets the amount of transfer authority in each bill. Table shows amounts provided for both
bridge and supplemental funds. Total for FY2003 includes $10.4 billion for Iraq Freedom
Fund in FY2003 (deducting specified floors and rescission).
j. Total includes amounts appropriated to special funds except for FY2003 where funds are shown as
transferred; total does not include caps or transfer authority.
Military personnel funding has hovered between $16 billion and $20 billion
a year (see Table 5). If the FY2007 Supplemental request is enacted, military
personnel costs would rise from $16.5 billion in FY2006 to $17.5 billion in FY2007.
About half of the $16 billion for war-related military personnel is for the cost of
paying full-time pay and benefits to the 150,000 reservists to 110,000 reservists who
have been activated each year since FY2004, with the number falling in recent
years.25
Funds for war-related military personnel also include special war-related pay
and benefits (e.g., hostile fire or imminent danger pay or survivors benefits) and
“overstrength” or the additional active-duty personnel who have been recruited and
retained to meet wartime needs above DOD’s pre-war strengths — 482,000 for the
Army and 172,000 for the Marine Corps. “Overstrength” has been considered a war
cost because DOD argued that the increases would be temporary but in the FY2007
Supplemental, the Defense Department has requested that these increases be part of
a permanent expansion of the Army and Marine Corps, a position supported by some
members as well (see below).
Since FY2004, DOD has reduced its reliance on reservists with the number
activated falling from 151,000 in FY2004 to 113,000 in FY2006. Despite this 25%
decrease, DFAS cost reports show a more modest 8% decrease in cost from $8.8
billion to $8.1 billion. It is not clear why cost figures are inconsistent with average
troop levels but GAO has found various inconsistencies in DOD reporting of military
personnel costs.26
Reliance on Reservists Falls. Between FY2004 and FY2006, DOD
reduced its reliance on reservists as their share of total personnel dedicated to war
missions declined from 30% to 24% (see Figure 1). This change reflects the fact
25 Average annual strength for activated reservists from Defense Manpower Data Center,
“Average Member Days Deployed by Service Component and Month/Year, 9/01 to 11/06.”
26 GAO, FY2004 Costs for Global War on Terrorism Will Exceed Supplemental, July 2004
[http://www.gao.gov/new.items/d04915.pdf].
CRS-17
that some reservists have bumped up against a DOD-imposed policy set after the 9/11
attacks that limited their total deployment time to 24 months. Since reserve
deployments were typically for 18 months — including time to train up — reservists
were available for only one deployment.
Secretary Gates recently changed this policy, setting call-ups for 12 rather
than 18 months. The services could also exclude train up and demobilization time
and make exceptions if necessary. The policy change also emphasizes activating
units rather than individuals to improve morale and readiness.27 This policy change
is likely to make reservists available for two tours if necessary.
Figure 1. Active-Duty and Reserve Shares of OIF/OEF Average
Annual Troop Levels, FY2003-Early FY2007
120%
100%
17%
24%
30%
24%
23%
34%
80%
All Reserves
60%
Active-Duty
40%
83%
76%
70%
76%
77%
66%
20%
0%
02
03
04
05
06
11/06
Notes and Sources: Includes all activated reservists whether deployed, preparing to deploy or serving
in the United States. Data from Defense Manpower Data Center, Contingency Tracking System,
“Average Member Days Deployed by Service Component and Month/Year,”November 2006. The
Contingency Tracking System covers military personnel servicing in Operation Iraqi Freedom,
Operation Enduring Freedom, and Operation Noble Eagle.
Changes in Military Personnel Costs. As DOD reduces its reliance on
activated reservists, war-related military personnel costs would be expected to fall
because the incremental war-related cost of active-duty personnel — special pays —
is less than paying full-time salaries to reservists. At the same time, however,
military personnel costs are higher as DOD “overstrength” or the number of
personnel over the Army and Marine Corps pre-war levels — grows. Yet DFAS
reports show a decline in funding for overstrength from $2.0 billion in FY2005 to $1
27 David S. C. Chu, Under Secretary of Defense for Personnel and Readiness,
“Mobilization/Demobilization Personnel and Pay Policy for Reserve Component Members
Ordered to Active Duty in Response to the World Trade Center and Pentagon
Attacks,”September 20, 2001; and Robert M. Gates, Secretary of Defense, “Utilization of
th Total Force,”Jan. 19, 2007.
CRS-18
billion in FY2006, another possible reporting error.28 Although DOD is now
proposing that these increases would be permanent in order to sustain higher
deployments for the Global War on Terror, DOD has requested the funds in the
FY2007 supplemental as an unanticipated emergency expense.
Changes in Operating Costs. Even if troop strength remains the same,
operational costs could grow if operating tempo intensifies, repair costs increase, or
support costs grow. These factors appear to explain some but not all of the $17
billion increase in operating costs from $43 billion in FY2004 to $60 billion in
FY2006 (see Table 5). Based on DOD reporting of obligations, this increase
reflects:
! more body armor and other protective gear for troops (purchased
with O&M funds), growth of $1 billion to $2 billion;
! the jump in oil prices and the rise in intensity of operations, growth
of about $4 billion;
! the coming due of maintenance bills as equipment wears out, growth
of $4 billion increase; and
! a $2 billion increase in command, communications, control,
computers and intelligence support.29
With the exception of force protection gear where congressional interest has been
high, DOD has not provided little explanation for these changes.
If the FY2007 Supplemental request is approved, operating costs would jump
by from $60 billion in FY2006 to $77 billion in FY2007 or by another $17 billion or
27%. This increase reflects the administration’s surge in troop levels and naval
presence (about $5 billion), higher repair costs ($3 billion), more force protection
gear (about $1 billion), and a doubling in transportation costs ($2 billion), increased
LOGCAP contractor support ($300 million), and higher operating tempo.30 These
factors identify some but not all of the increase.
Changes in Investment Costs. Since FY2004, the rise in investment
costs has been dramatic — about a threefold increase from $7.2 billion in FY2004
to $23 billion in FY2006. Procurement made up about 25% of DOD’s appropriations
compared in FY2006 compared to 10% only two years earlier. Since FY2003, DOD
has received about $80 billion in war-related procurement funds — about equal to
the amount received by DOD for its baseline budget in FY2006 (see Table 5).31 The
FY2007 Supplemental calls for another large increase where procurement would
grow from $23 billion to $43 billion, a $20 billion increase and close to a doubling.
28 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and September
2006, “DoD Totals.”
29 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and September
2006, “DoD Totals.”
30 Department of the Army, Global War on Terrorism (GWOT)/Regional War on Terrorism
(RWOT), FY2007 Supplemental Budget Estimate, Volume 1, February 2007;
[http://www.asafm.army.mil/budget/fybm/fy08-09/sup/fy07/oma-v1.pdf].
31 DOD received $80.9 billion for procurement in FY2006; see H.Rept. 109-676, p. 135.
CRS-19
Again, some of the reasons for this upsurge in war-related investment costs
are known:
! a push by both DOD and Congress to provide more force protection
equipment and increase situational awareness (e.g., uparmored High
Mobility Multipurpose Wheeled Vehicles (HMMWVs), radios,
sensors);
! a decision to fund equipment for newly-configured Army and
Marine Corps units, known as modularity or restructuring;
! the growing bill to rebuild or replace damaged equipment, a process
known as reset or reconstitution;
! extensive upgrading of equipment; and
! the building of more extensive infrastructure to support troops and
equipment in and around Iraq and Afghanistan.
These reasons are not sufficient, however, to explain the scope of increases
thus far or to sort out whether the new requests are legitimately war-related
emergencies rather than being part of ongoing modernization or transformation
programs. DOD has provided little rationale or explanation for its requirements or
change in requirements for replacing war-worn equipment or extensive upgrades.
In some cases, requirements do not appear to be strictly related to war needs.
For example, Congress included funds for C-17 aircraft in order to keep the
production line open though it’s relationship to war needs is tenuous. Congress also
agreed to fund the cost of equipping newly-configured Army and Marine Corps units
— a pre-war initiative known as modularity or restructuring initiative — in the
FY2005 and FY2006 supplemental (see section on reset below and CRS Report
RL33900 on FY2007 Supplemental).
Typically, war funds do not include RDT&E or military construction because
both activities take considerable time, and hence do not appear to meet an emergency
criteria. In this respect, the Iraq and GWOT conflicts are breaking new ground.
DOD is now receiving war funding for RDT&E in both specific programs and in the
Joint IED Defeat Fund, a new account where DOD transfers funds after enactment
with prior reporting to Congress.
In the FY2007 Supplemental, DOD is requesting an additional $1.9 billion
for military construction, almost doubling the previous peak in FY2005. Funding for
military construction may prove controversial for two reasons — concerns among
some members that construction indicates an intent to set up permanent bases in Iraq
and construction funding in the United States that is part of proposed plans to
increase the size of the force, and not clearly an emergency. Although DOD has not
ruled out retaining bases in Iraq, current guidelines limit the use of concrete
structures and emphasize building relocatable units.
The FY2007 Supplemental includes:
! $318 million for Iraq,
! $650 million for Afghanistan,
! $61 million for Djibout,
! $417 million for stateside construction, and
CRS-20
! $384 million in planning and design funds.32
Special Funds and the Flexibility Issue. Since the 9/11 attacks,
Congress has relied on a variety of special accounts that give DOD additional
flexibility to respond to the uncertainty of wartime needs. Congress has also been
more willing to approve higher levels of transfer authority which allowing DOD to
move funds into different accounts after enactment. The funding in these new
accounts generally does not reflect troop levels or immediate operational needs.
Table 5 shows the funding provided in these flexible accounts including:
! Afghan and Iraq Security Forces Funds for training and equipping
police and security forces;
! the Joint Improvised Explosive Device (IED) Defeat Fund for
providing funds to be transferred to procurement, RDT&E, or
operation and maintenance to develop and field solutions to the IED
threat; and
! the Iraq Freedom Fund set up to cover war operations cost in the first
year of the invasion and occupation (IFF);
! the Natural Resources Risk Remediation Fund set up to cover
expected damage to Iraqi oil fields; and
! the Defense Emergency Response Fund (DERF).
Typically, Congress has given DOD latitude in how to use these funds and required
after-the-fact quarterly reporting.
The Afghan and Iraq Security Forces Funds provide lump sums which DOD
could then allocate between equipment and training needs. Similarly the Joint IED
Defeat Fund allows DOD to decide where funds are needed to meet this threat.
Although the new accounts are designated to meet particular goals, they are similar
to funding flexibility given to DOD after the 9/11 attacks.
In the first two years after the 9/11 attacks, Congress gave DOD substantial
leeway to move funds after enactment to meet war needs by appropriating funds to
special accounts. Initially, DOD received $17 billion in its Defense Emergency
Response Fund (DERF), spending those funds in broadly defined allocations such as
“increased situational awareness,” and “increased worldwide posture.”33 In the
FY2002 Supplemental, Congress appropriated $13 billion for war costs including
32 Department of Defense, Exhibits for FY2007, C-1, February 2007;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_Emer
gency_Supplemental_Request_for_the_GWOT/FY_2007_Emergency_Supplemental_Re
quest_(Atch).pdf].
33 Congress appropriated $20 billion in the government-wide Emergency Response Fund
which could be spent by the president at his discretion (P.L.107-38). DOD also received
another $3.5 billion in the DERF but had to follow allocations that were set in the FY2002
DOD Conference report (H.Rept. 107-350, p. 423).
CRS-21
$11.9 billion in the DERF, transformed into a transfer account, with guidelines set
in the conference report.34
In the FY2003 Supplemental, Congress appropriated a total of $77.4 billion
in war funding, including $15.6 billion in a new Iraq Freedom Fund (IFF) where
DOD could transfer funds after enactment and then report to Congress.35 Since
FY2004, Congress has appropriated most war funds to specific accounts but has
given DOD larger amounts of transfer authority where DOD can move funds after
enactment with the consent of the four congressional defense committees (see Table
5) as well as setting up new transfer accounts for specific purposes such as training
Iraqi security forces.
Congress has also set caps or ceilings on funding within O&M accounts for
specific purposes rather than set program limits. These include funding for :
! coalition support which pays U.S. allies for their logistical support
in counter-terror operations such as Pakistani border; and
! Commanders Emergency Response Program (CERP) for small
reconstruction projects selected and run by individual commanders;
The issue for Congress is the amount of flexibility to give DOD to meet needs
which it cannot define when appropriations are provided.
DOD Spending Thus Far
Average monthly obligations are frequently used as a way to measure the rate
of ongoing war spending. As of November 2006, DOD estimates that war-related
obligations total $372 billion and are about $10 billion including $8.6 billion for Iraq
and $1.4 billion for Afghanistan (see Table 6 below).
Although these figures capture DOD’s contractual obligations for pay, goods,
and services, they do not give a complete picture because they do not capture all
appropriated funds or all funds obligated. DOD acknowledges that these figures do
not capture about $27 billion in classified activities. Other funds — such as those to
create more modular units — may also not be captured in Defense Finance
Accounting Service (DFAS) reports because the services treat these as part of DOD’s
regular programs. DOD also estimates that there are about $56 billion in funds still
to be obligated.
Obligations figures also do not reflect outlays — or payments made when
goods and services are delivered — which would be a better measure of spending
rates and actual costs. DOD does not track outlays for its war costs because war-
related appropriations are mixed with regular or baseline funds in the same accounts
making it difficult to segregate the two. If DOD had separate accounts for war and
34 H.Rept. 107-593, p. 17 and 128.
35 Congress rescinded $3.5 billion of th $15.6 billion originally appropriated to the IFF and
included ceilings for certain purposes, such as intelligence, within the total.
CRS-22
peace costs, outlays could be tracked, which would capture the amount spent and
give a better sense of actual spending rates.
Table 6 below shows CRS estimates of obligations rates after adjusting DOD
accounting reports to add classified and other unreported war-related activities.36
Average obligations are a better indicator of ongoing operational costs than
investment costs because these funds must be obligated — put on contract — within
the first year. For investment costs, average monthly obligations lag appropriated
budget authority because only some funds are obligated in the first year because of
the time for the planning and negotiation of contracts.
Changes in Average Monthly Obligations. Based on CRS estimates,
average monthly obligations grew by about 40% between FY2003 and FY2006 from
$6.2 billion to $8.8 billion with the most rapid increase being in Iraq costs. Monthly
obligations for OEF have hovered around $1 billion a month while Iraq costs
increased from $4.4 billion to $7.4 billion in four years. In that time, investment
obligations — primarily procurement — has jumped over five-fold as the services
have begun to spend substantial amounts on procurement of new weapons systems
to replace war-worn equipment and losses from combat, enhance force protection,
and upgrade equipment. (CRS lowered earlier estimates for FY2006 to reflect
reported obligations rather than estimates.)
Investment spending slowed temporarily in FY2006 and jumped sharply
with the beginning of the new fiscal year. That rate is likely to remain high as
substantial procurement appropriations received in recent years is obligated, and as
operational costs grow with the higher troop strength in both Iraq and Afghanistan
in FY2007.
36 Averages correct for monthly fluctuations which may reflect when individual contracts
are signed. Operational costs include working capital funds, defense health, and counterdrug
monies and investment costs include procurement, RDT&E and military construction.
CRS-23
Table 6. DOD’s Obligations by Operation: FY2001-Nov. 2006
(in billions of dollars)
DOD
Reported
Cum.
Average monthly obligationsa
Obs
FY06
FY07
from
Mission and type
DFAS
(Nov.
FY01-
of spending
FY03 FY04 FY05 FY06 Reported
06)
Nov. 06
Operation Iraqi Freedom
Operationsb
4.2
4.3
4.7
5.9
5.8
6.1
NA
Investmentc
0.2
0.6
1.8
1.4
1.1
2.5
NA
Total
4.4
4.8
6.5
7.4
7.0
8.6
276.0
Afghanistan and the Global War on Terrord
Operationsb
1.1
0.9
0.9
1.2
1.1
1.4
NA
Investmentc
0.2
0.1
0.2
0.2
0.1
0.0
NA
Total
1.3
1.0
1.1
1.4
1.2
1.4
69.0
Enhanced security and othere
Operationsb
0.5
0.3
0.2
0.1
0.1
0.0
NA
Investmentc
0.0
0.0
0.0
0.0
0.0
0.0
NA
Total
0.5
0.3
0.2
0.1
0.1
0.0
27.0
All missions
Operationsb
5.8
5.5
5.8
7.2
7.0
7.5
NA
Investmentc
0.4
0.7
2.0
1.7
1.2
2.5
NA
Total
6.2
6.2
7.7
8.8
8.2
10.0
372.0
Notes: NA = Not available. Numbers may not add due to rounding. CRS revised previous estimate
downward to reflect actual obligations reports rather than estimates.
a. CRS calculations based on obligations during each fiscal year from all available funds as reported
by the Defense Finance Accounting Service plus CRS estimates for intelligence and other
unreported costs.
c. Includes funds appropriated for military personnel, operation and maintenance, working capital,
and defense health.
d. Includes funds appropriated for procurement, RDT&E, and military construction.
e. Operation Enduring Freedom funds Afghanistan and other global war on terror (GWOT) activities.
f. ‘Enhanced security and other’ includes additional security at defense bases, combat air patrol around
U.S. cities, and reconstruction of the Pentagon after the 9/11 attacks.
In the most recent DFAS reports for October and November 2006,
obligations are running about $10 billion a month with Iraq at $8.6 billion and
Afghanistan at $1.4 billion.37 Average monthly obligations for Afghanistan and other
GWOT operations have also jumped in the first months of FY2007.
The monthly average for enhanced security (Operation Noble Eagle) has
fallen substantially from $520 million per month in FY2003 to less than $100 million
37 CRS estimates would be somewhat higher.
CRS-24
in FY2006 as one-time costs ended, and costs have been incorporated in day-to-day
base operations.
Total Obligations to Date. DOD reports that of the $372 billion in
reported obligations since FY2003:
! $276 billion or 74% is for Iraq;
! $69 billion or 24% is for Afghanistan and other GWOT; and
! $27 billion or 7% is for enhanced security (see Table 6).
This does not include obligations for intelligence or other expenses that are included
in CRS estimates but not captured by DOD’s DFAS reports.
Average Cost Per Deployed Troop and Estimates of Future
Costs
To give another window into trends and how changes in troop levels may
affect costs, CRS estimated the average annual cost for each deployed troop —
showing operational and investment costs separately. Because only some costs (e.g.,
for meals, body armor, operating tempo, and ammunition) are likely to vary in
proportion with troop levels, the average cost per troop cannot be used to directly
estimate the cost of alternate troop levels (see Table 7).
Table 7. Average Annual Cost Per Deployed Troop:
FY2003-FY2006
Average Troop Strength &
FY03
FY04
FY05
FY06
Change
Obligations
Since
FY2003
Number of deployed troopsa 225,800
219,600
258,800
269,300
19%
Average annual obligations in
$320,000 $340,000 $350,000 $390,000 22%
000s of $
Operational costsb
$300,000 $300,000 $270,000 $325,000
9%
Investment costsc
$20,000 $40,000 $80,000 $65,000 215%
Notes and Sources: Numbers rounded. CRS calculations based on average deployed troop strength
from the Defense Manpower Data Center (DMDC) and costs from Defense Finance Accounting Service,
Supplemental & Cost of War Execution Reports, FY2003-FY2006 with CRS estimates of unreported
expenses. DMDC troop strength does not separate Iraq and OEF.
a. Does not include additional activated reservists who are training up for deployments, backfilling for
active-duty personnel or providing additional security at bases. DMDC figures do not separate military
personnel in OIF and OEF.
b. Includes military personnel and operation and maintenance costs.
c. Includes procurement, RDT&E, and military construction costs.
Some costs would rise or fall immediately as troops are withdrawn — e.g.,
meals served, fuel consumed, spare parts replaced — while other costs would change
more slowly — e.g., utilities costs, building maintenance, equipment wear and tear.
Still other costs would temporarily increase, such as transportation costs to ship
personnel and equipment back to the United States. Over time, however, support costs
CRS-25
would begin to change in proportion with personnel levels if higher troop levels persist
or if troops are withdrawn.
Since FY2003, the average cost per deployed troop has risen from about
$320,000 to $390,000 per deployed troop.38 While that increase reflects primarily more
spending for procurement — for replacement and upgrading of equipment —
operational costs have also grown (see Table 7).
Estimates of Future Costs. CBO developed two alternative paths for the
future cost of the Global War on Terror — both Iraq and OEF — in its FY2008 budget
outlook. Under the faster drawdown scenario, troop levels and costs would decline
from current levels to 30,000 troops by FY2010. Concurrently, costs would decline
from $149 billion in FY2007 (lower than DOD’s request of $163 billion) to:
! $124 billion in FY2008;
! $78 billion n FY2009;
! $42 billion in FY2010;
! $26 billion in FY2011; and
! $20 billion each year from FY2012 through FY2017.
Under the more gradual drawdown scenario, troop levels would decline from
current levels to 75,000 troops by FY2013. Costs would decline from $149 billion this
year to:
! $144 billion in FY2008;
! $133 billion in lFY2009;
! $112 billion in FY2010-;
! $91 billion in lFY2011;
! $71 billion in FY2012; and
! about $58 billion a year for FY2013 through FY2017.39
CBO did not estimate a more rapid withdrawal of troops. Congress may want to ask
DOD to estimate the cost of alternate troop levels in Iraq and Afghanistan.
Major War Cost Issues in the 110th Congress
Several issues may arise in congressional debate about war costs and the
FY2007 Supplemental and the FY2008 war request:
! the lack of transparency in war costs;
! congressional mechanisms for affecting troop levels;
! defining reset and upgrade requirements; and
38 CRS revised these costs because of better data on average deployed troop levels received
recently from the Defense Manpower Data Center. Because this data does not segregate
military personnel by OIF and OEF, CRS includes only one figure for both.
39 See Table 1 in CBO, Letter to Senator Kent Conrad, “Estimated Funding for Operations
i n I r a q a n d t h e W a r o n T e r r o r i s m , ” F e b . 7 , 2 0 0 7 ;
[http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-CostOfWar.pdf].
CRS-26
! readiness problems.
All these issues are made more difficult by the limitations, gaps and discrepancies in
DOD information on war costs.
Transparency Issues
Although DOD has testified frequently and submitted various reports on Iraq
and the global war on terror, information and explanations of changes in the cost of
OIF and OEF have been limited, incomplete, and sometimes inconsistent. Until the
FY2007 Supplemental and FY2008 War Cost request, DOD has submitted very little
information to buttress its requests. Both the Iraq Study Group and CBO have
criticized DOD’s presentation of cost data for Iraq and the global war on terror.
The Iraq Study Group called the administration’s requests “confusing making
it difficult for both the general public and members of Congress,” to know, something
that “should be a simple question” such as the amount requested for Iraq operations.40
CBO pointed out that DOD’s justification materials have been sparse — for example,
DOD provided five pages to justify $33 billion in operation and maintenance spending,
about half of the FY2006 supplemental request.41
Because few details are included, CBO notes the difficulty in determining the
basis of DOD requests and estimating alternatives. And because appropriations for war
are mixed with DOD’s baseline budget, information about “what has actually been
spent,” or outlays is not available. That information is important for estimating the cost
of alternate future scenarios and also for showing the effect of war costs on the federal
deficit.42
Gaps and Discrepancies. CRS, CBO, and GAO have all found various
discrepancies in DOD figures — including understating budget authority and
obligations, mismatches between BA and obligations data, double-counting of some
obligations, questionable figures, and a lack of information about basic factors that
affect costs such as troop strength or operating tempo metrics.43
For example, DOD does not count about $7 billion from its FY2003 regular
appropriations act that was intended for GWOT but that it cannot track. CRS and CBO
40 James A. Baker, III, and Lee H. Hamilton, Co-Chairs, The Iraq Study Group Report, (New
York: Vintage Books), 2006, p. 91.
41 Testimony of Robert A. Sunshine, CBO, before the House Budget Committee, January
18, 2007, p. 5.
42 Ibid, p. 5 and p. 6. CBO has estimated war-related outlays, and presumably DOD and
OMB do as well though separate outlays for war are not shown in the budget.
43 GAO, FY2004 Costs for Global War on Terrorism Will Exceed Supplemental, July 2004
[http://www.gao.gov/new.items/d04915.pdf] ;GAO-05-882, Global War on Terrorism: DOD
Needs to Improve the Reliability of Cost Data and Provide Additional Guidance to Control
Costs, September 2005; [http://www.gao.gov/new.items/d05882.pdf] ; CBO, Testimony
before the House Budget Committee, January 18, 2007.
CRS-27
both include these funds. In 2005, GAO also found that DOD planning documents
included $10 billion for each year GWOT for the next five years that also cannot be
identified.44 CRS also found that about $2.5 billion used by DOD to prepare for the
invasion of Iraq came from previously appropriated funds available to DOD before
Congress passed the resolution approving the use of force in Iraq.45
Both CRS and CBO also include transfers from DOD’s regular accounts to
cover war costs.46 DOD does not include transfers in the total for war appropriations
of $455 billion in its FY2007 Supplemental justification. At the same time, however,
the figures in its justification show that obligations exceeded budget authority by $2
billion in FY2001 and $4 billion in FY2004, a gap presumably met through transfers
from DOD’s regular appropriations.47
DOD’s FY2007 justification also acknowledges that its reporting of obligations
does not include $27 billion in intelligence funding. About $10 billion in funding for
modularity also appears not to be included. With incomplete obligations data, it is
difficult to know how much funding is available or carried over from previous years,
a figure typically used to evaluate whether new requests for procurement and Research,
Development, Test and Evaluation (RDT&E) are urgent.
For example, using only DFAS reports, DOD’s carryover from previous
appropriations would be about $14 billion for funds appropriated in FY2004, FY2005,
and FY2006 and another $14 billion in unobligated procurement monies in the FY2007
bridge. That would suggest that DOD has considerable carryover in investment funds,
which could raise questions about whether additional funds are urgently needed at this
time. At the same time, DFAS reports show few recent obligations from these earlier
years, which suggest that these funds may not be captured in its reports.48
For the first time, DOD’s FY2007 supplemental request shows the full year’s
funding if the request is enacted and including previously enacted bridge funds and
compares those figures to FY2006, a considerable improvement over previous requests.
44 Government Accountability Office, Global War on Terrorism: DoD Needs to Improve the
Reliability of Cost Data and Provide Additional Guidance to Control Costs, GAO-05-882,
Sept. 2005, pp. 33, 35; [http://www.gao.gov/new.items/d05882.pdf].
45 A DOD table attributes $2.5 billion in funds for Iraq to years before FY2003, probably from
the first two war supplementals (P.L. 107-38 and P.L. 108-206), which were to “respond to the
terrorist attacks,” of September 11th and “to continue the global war on terrorism ....” These
funds probably included the $700 million that according to Bob Woodward’s book, Plan of
Attack, President Bush used to upgrade facilities and prepare for the war in Iraq in the summer
of 2002 before passage of the joint resolution authorizing the use of force in Iraq. This account
was disputed by then-Deputy Defense Secretary Wolfowitz.
46 See CBO, “Estimated Funding for Operations in Iraq and the War on Terrorism,” August
25, 2006; [http://www.cbo.gov/ftpdocs/75xx/doc7506/GWOT_Tables_2006_08.pdf].
47 DOD, FY2007 Supplemental, p. Figures 1 and 2, p. 93 and p. 94. CRS now includes this
additional $2 billion in total war BA.
48 CRS calculations from DFAS, Supplemental & Cost of War Execution Reports,
September, FY2004, FY2005, and FY2006.
CRS-28
Unfortunately, the request uses the standard categories for military personnel and O&M
its war request rather than the DFAS categories developed specifically for contingency
reporting. For the Army, in particular, this means that $35 billion is characterized as
“Additional Activities,” the Army’s standard cost category for contingencies, with
limited explanation for the factors driving those costs.49 Also, by not showing DFAS
categories, it is difficult and often impossible to compare the current request with
spending before FY2006.
Both CBO and GAO have also raised concerns that DOD obligations reporting
classifies large portions of funding as “other services and miscellaneous contracts,” a
category too vague to be useful. Because DOD has provided few performance metrics
and limited detail on costs and no outlay figures, estimates of the cost of alternative
troops levels are difficult to make.50
Uncertainty About Figures. DOD has also periodically revised the figures
shown for each operation in previous years suggesting questions about the validity of
its figures.51 CRS has used figures from DOD briefings, DFAS reports, and most
recently, the FY2007 Supplemental justification to build its estimates. For
example, DFAS reports originally showed $38 billion in obligations for Iraq in
FY2003. DOD later revised this estimate to $42.4 billion. Most recently, DOD now
shows $48 billion, which include not only additional obligations reported by DFAS but
also $2 billion from some unknown source.52
The Comptroller General of GAO testified that the lack of actual costs,
adequate supporting documentation, and reporting problems “make it difficult to
reliably know what the war is costing, to determine how appropriated funds are being
spent, and to use historical data to predict future trends.53 An audit by the Department
of Defense Inspector General might be a way to resolve these various gaps and
discrepancies in cost data. Despite these problems, the DFAS reports are the main
figures available that capture past costs and can be used to project future costs. DOD
49 Department of the Army, Global War on Terrorism (GWOT)/Regional War on Terrorism
(RWOT), FY2007 Supplemental Budget Estimate, Volume 1, February 2007;
[http://www.asafm.army.mil/budget/fybm/fy08-09/sup/fy07/oma-v1.pdf].
50 CBO, Letter to Senator Conrad, Estimated Funding for Operations in Iraq and the Global
War on Terror, February 7, 2007. [http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-
CostOfWar.pdf].
51 CRS has used figures from DOD briefings, DFAS reports and supplemental justification
materials to build its estimates. Figures are seldom consistent.
52 Office of Secretary of Defense, Comptroller, Table with corrected DFAS figures; see
DOD, FY2007 Supp, Figure 2 for new obligations figures, p. 93; DFAS reports for
September 2004, FY2005, and FY2006 include additional obligations for OIF from FY2003
monies.
53 GAO, Testimony of David Walker, Comptroller General before the Subcommittee on
National Security, Emerging Threats and International Affairs, “Global War on Terror:
Observations on Funding, Costs, and Future Commitments,” July 18, 2006, p. 3 and 4;
[http://reform.house.gov/UploadedFiles/Final%20GAO%20Walker%20Testimony.pdf].
CRS-29
has not been willing to provide Congress with other tools, such as the model the
services use to predict operating costs, which reflects assumptions about operating
tempo, personnel levels and many other factors.54
Congressional Ways to Affect Military Operations
As interest in alternate policies for Iraq has grown, Congress may turn to the
Vietnam and other experience to look for ways to affect military operations and troop
levels in Iraq. In the past, Congress has considered both funding and non-funding
options. Generally restrictions tied to appropriations have been more effective. For
more detail about past restrictions, see CRS Report RL33803, Congressional
Restrictions on U.S. Military Operations in Vietnam, Cambodia, Laos, Somalia, and
Kosovo: Funding and Non-Funding Approaches, by Amy Belasco, Hannah Fischer,
Lynn Cunningham, and Larry Niksch. For information about recent proposals to
restrict military operations, see CRS Report RL33900, FY2007 Supplemental
Appropriations fo Defense, Foreign Affairs, and Other Purposes by Stephen Daggett
et al.
Funding options generally prohibit the obligation or expenditure of current or
previously appropriated funds. Obligations occur when the government signs a
contract to buy goods or services or pays its military or civilian personnel.
Expenditures, or outlays, take place when the contractor or employee is paid.
Funding provisions fall into several patterns including those that:
! cut off funding for particular types of military activities but permit
funding for other activities — e.g., prohibiting funds for combat
activities but permitting funds to withdraw troops;
! cut off funds as of a certain date in a specific country;
! cut off funds “at the earliest practical date,” which essentially gives the
president leeway to set the date;
! cut off funds if certain conditions are met (such as a new
authorization) or certain events take place (such as the release of U.S.
prisoners of war).
Other non-funding provisions have required that:
! troops be withdrawn by a specified date in the future or at the “earliest
practical date;”
! funds be withdrawn unless there was a declaration of war or a specific
congressional authorization of the war activities;
! previous congressional resolutions authorizing military activities be
repealed.
54 DOD’s Contingency Operations Support Tool (COST) model is used to predict most
operating costs.
CRS-30
One or both houses may also state a “sense of the Congress” that U.S. military
operations should be terminated or forces withdrawn, a non-binding resolution that
does not need to be signed by the president.
While only a handful of provisions have been enacted, Congressional
consideration of these various limiting provisions placed pressure on the administration
and thus influenced the course of events. For example, one provision that prohibited
the introduction of U.S. ground troops into Cambodia was enacted in 1970 after U.S.
forces had invaded and then been withdrawn from Cambodia; that provision was
intended to prevent the re-introduction of troops.
Although President Nixon did not re-introduce U.S. troops, the United States
continued to bomb Cambodia for the next three years. Later in 1973, Congress passed
two provisions that prohibited the obligation or expenditures of “any funds in this or
any previous law on or after August 15, 1973” for combat “in or over of from off the
shores of North Vietnam, South Vietnam, Laos or Cambodia.”55 The final version
reflected negotiations between the administration and Congress about when the
prohibition would go into effect with August 15, 1973 set in the enacted version and
bombing did stop on that day.
Two well-known proposals that were not enacted — the Mc-Govern-Hatfield
amendment and the Cooper-Church amendments were also part of this jockeying
between the administration and Congress. The first prohibited expenditure of
previously appropriated funds after a specified date “in or over Indochina” except for
the purpose of withdrawing troops or for protection of U.S. troops during the
withdrawal while the second prohibited the expenditure of any funds after July 1, 1970
to retain troops in Cambodia “unless specifically authorized by law hereafter.”56
Generally, Congress continued to provide funds for U.S. troops in Vietnam at
the requested levels that decreased as the Nixon Administration reduced troop levels.
Overall, funding restrictions have generally proven more effective than the War Powers
Act, which has been challenged by the executive branch on constitutional grounds.57
55 One provision was included in both P.L. 93-52, the Continuing Appropriations Act of
1974 and the Second Supplemental Appropriations Act of 1973, P.L. 93-50, both enacted
July 1,1973; see CRS Report RL33803, Congressional Restrictions on U.S. Military
Operations in Vietnam, Cambodia, Laos, Somalia, and Kosovo: Funding and Non-Funding
Approaches, by Amy Belasco, Hannah Fischer, Lynn Cunningham, and Larry Niksch.
56 See Ibid, Table 1. For a discussion of the legal issues, see CRS Report RL33837,
Congressional Authority to Limit U.S. Military Operations in Iraq, by Jennifer K. Elsea and
Thomas J. Nicola.
57 See CRS Report RS20775, Congressional Use of Funding Cutoffs Since 1970 Involving
U.S. Military Forces and Overseas Deployments by Richard F. Grimmett.
CRS-31
Assessing the FY2007 Supplemental: the Emergency
Designation
Congressional leaders have promised more scrutiny of the Administration’s
requests for a FY2007 Supplemental and FY2008 war costs. The FY2007
Supplemental requests an additional $93.4 billion for war costs, which would bring
DOD’s annual war cost to $163.4 billion, the highest to date and 40% more than in
FY2006. If enacted, cumulative war costs would reach $607 billion.
For FY2008, the Administration is requesting $141.7 billion for war costs,
somewhat less than in FY2007 but about 20% more than in FY2006. If that request is
enacted, war costs would then total $752 billion since the 9/11 attacks.
Although the Administration would classify its request as emergency funds,
much of the request would not seem to meet the traditional definition of emergency —
as an urgent and “unforeseen, unpredictable, and unanticipated” need — though
defense requests in the past have not been held to that standard.58
DOD Changes Definition of War Costs. For the past ten years, DOD
financial regulations have defined the cost of contingencies to include only incremental
costs directly related to operations. Until October 2006, that guidance was used by the
services to prepare their estimates for Iraq and GWOT. The guidance requires that the
service show assumptions about troop levels, operational tempo, and reconstitution and
limits requests to incremental costs — “that would not have been incurred had the
contingency operation not been supported.” Investment requests are also to be
incremental and included “only if the expenditures were necessary to support a
contingency operation.”59
In the July 19, 2006 guidance to the services for developing the FY2007
Supplemental and FY2008 war cost requests, these strictures were re-iterated. That
guidance also prohibited including Army modularity “because it is already programmed
in FY2007 and the outyears,” and warned that the services would have to demonstrate
that investment items were “directly associated with GWOT operations,” rather than
to offset “normal recurring replacement of equipment.” In addition, the services would
have to show that reset plans could be executable in FY2007, likely to mean within the
last several months of the fiscal year based on experience in FY2006.60
On October 25, 2006, Deputy Secretary of Defense England issued new
guidance for requesting war funds to the services, requiring them to submit new
58 CRS Report RL33405, Defense FY2007 Authorization and Appropriations, by Stephen
Daggett.
59 DOD, Financial Management Regulations, Chapter 12, Sec. 23, “Contingency
Operations,” p 23-11ff, 23-21, 23-25, 23-27; [http://www.dod.mil/comptroller/
fmr/12/12_23.pdf].
60 Under Secretary of Defense, Memorandum for Secretaries of the Military Departments,
“Fiscal Year (FY) 2008-2013 Program and Budget Review,” July 19, 2006, p. 34-49,
specifically p. 36, 39, 41.
CRS-32
requests within two weeks that reflect the “longer war on terror” rather than strictly the
requirements for war operations in Iraq, Afghanistan and other counter-terror
operations. Such a substantial change would be expected to reflect guidance from the
Secretary of Defense, the Office of Management and Budget and the president. This
new definition opens the way for including a far broader range of requirements
particularly since the needs of the “longer war” are relatively undefined.
Congress may want to consider whether this expanded definition is appropriate
particularly for a request classified as “emergency.” Since the long war on terror is now
part of DOD’s key missions according to the national strategy, it could be argued that
these types of expenses should be included in DOD’s regular budget where they would
compete with other defense needs.
Procurement Requests In the FY2007 Emergency Supplemental.
Both the FY2007 Supplemental and the FY2008 War cost requests include large
increases in procurement funding — from $20.4 billion in FY2006 to $39.7 billion in
FY2007 and $32.9 billion in FY2008. Much of this increase appears to be a response
to the new England guidance to fund requirements for the “longer war” rather than
DOD’s traditional definition of war costs as strictly related to immediate war needs
For example, the Navy is requesting $450 million for six EA-18G aircraft, a
new electronic warfare version of the F-18, and the Air Force $389 million for two
Joint Strike Fighters, an aircraft just entering production; such new aircraft would not
be delivered for about three years and so could not be used meet immediate war needs.
Other new aircraft in DOD’s supplemental request include CV-22 Ospreys and C-130J
aircraft. In its March amendment to the FY2007 Supplemental, the Administration
recently withdrew several of these requests, reflecting the likelihood that Congress
would question whether these aircraft were truly incremental war expenses.
Front Loading Reset Funding. Another potentially controversial request
in the FY2007 Supplemental is the $14 billion requested for reset — the replacement
of war-worn equipment. That request appears to front load (or fund in advance)
DOD’s reset requirements, a fact acknowledged by OMB Director Portman in recent
testimony.61 According to DOD figures, Army and Marine Corps reset requirements
were fully met in the already enacted FY2007 bridge fund when Congress provided
$23.7 billion for rmy and Marine Corps reset costs, the amount that the services said
was needed.62
As substantial amounts of equipment are being sent back to the United States
for repair, the Army and Marine Corps would be expected to be able to check previous
estimates of the effect of current operations on wear and tear of equipment. As of this
year, the Army and Marine Corps have received a total of $50 billion for reset. Reset
61 Testimony of OMB Director Portman before the House Budget Committee, Hearing on
the FY2008 DOD Budget, February 6, 2007, p. 41 of transcript.
62 See table inserted by Senator Stevens in Congressional Record, Aug. 2, 2006, p. S8571
showing $23.7 billion for reset, including $14 billion in procurement; total funded also
provided $4.9 billion for unfunded FY2006 requirement; see also DOD’s Report to
Congress, Long-Term Equipment Repair Costs, September 2006.
CRS-33
is defined as the “process of bringing a unit back to full readiness once it has been
rotated out of a combat operation,” by repairing and replacing equipment and resting
and retraining troops.63 The services are to repair equipment if economical or replace
it if replacement costs almost as much as repair.
The FY2007 Supplemental appears to include an extra year of Army and
Marine Corps reset requirements — estimated to be $12 billion to $13 billion a year
as long as the conflict lasts at the current level and “for a minimum of two to three
years beyond” according to recent statements by Army Chief of Staff, General Peter J.
Schoomaker.64 The front loading of requirements may be an attempt by the services to
avoid being in the position of requesting reset funds after U.S. troops have started to
withdraw.
Although it is clear that reset requirements will reflect the stress on equipment
from operations, the validity of the Army’s estimates has not been tested. Recently,
GAO testified that until FY2007, the Army could not track reset or ensure that funds
appropriated for reset were in fact spent for that purpose.65 Congress may want to
decide whether front loading these costs is advisable given the uncertainty of
requirements. In addition, presumably much of the equipment that is being repaired
now because of the effect of war operations, was originally slated for repair or
replacement at a later date, and so is being repaired or replaced sooner than anticipated.
That could mean DOD’s baseline budget could be reduced to offset war funding
already provided.
Reset requirements may also be uncertain because the number of troops and
intensity of operations may change. In an earlier estimate last spring, the Army
estimated that reset requirements would decrease from $13 billion a year to $10.5
billion a year for the next two years and then decline to $2 billion the year if troops
were withdrawn over a two-year period.66 DOD’s estimates have also changed over
time; in March 2005, CBO estimated that annual repair and replacement costs would
run about $8 billion a year based on the current pace of operations and service data.67
DOD’s definition of reset now includes not only replacing battle losses
(typically about 10% of the total), equipment repair (about half) but also
63 Office of the Secretary of Defense, Report to Congress, Ground Force Equipment Repair,
Replacement, and Recapitalization Requirements Resulting from Sustained Combat Operations,
April 2005, p. 8; see also GAO-06-604T, Defense Logistics: Preliminary Observations on
Equipment Reset Challenges and Issues for the Army and Marine Corps, p. 3.
64 Statement of Peter J. Schoomaker, Chief of Staff, Department of the Army, before the
House Armed Services Committee, “Reset Strategies for Ground Equipment and Rotor
Craft,” June 27, 2006, p.2
65 GAO-07-439T, Testimony of William Solis before the Subcommittee on Readiness and
Air and Land Forces, House Armed Services Committee, January 31, 2007, p. 2 and 3.
66 Army Briefing, “Army equipment Reset Update,” May 18, 2006, p. 8.
67 CBO Testimony by Douglas Holtz-Eakin, Director, “The Potential Costs Resulting from
Increased Usage of Military Equipment in Ongoing Operations,” before the Subcommittee
on Readiness, House Armed Services Committee Apr. 6, 2005, p. 2.
CRS-34
recapitalization that typically upgrades current equipment and repair and replacement
of prepositioned equipment stored overseas that has been tapped to meet war needs.
The Army has been planning to recapitalize equipment and modernize prepositioned
equipment stocks to match the new modular designs as part of its ongoing
modernization. For this reason, it’s not clear whether these expenses are legitimately
incremental wartime requirements.
Modularity As An Emergency Expense. The distinction between war-
related and regular funding has also been made murky by DOD requests to treat
conversion of Army and Marine Corps units to new standard configurations — known
as modularity and restructuring — as a war requirement. For example, at DOD’s
request, Congress agreed to provide $5 billion in the FY2005 and in FY2006
supplementals for converting units with the understanding that DOD would move these
funds back to its regular budget in later years. The FY2007 supplemental again requests
$3.6 billion to convert two Army brigade teams and create an additional Marine Corps
regimental combat team so Congress will have an opportunity to decide whether the
war-related label is appropriate or whether funds that are part of DOD’s regular
requirements are being shifted to emergency funding.
DOD argues that these costs should be considered war-related because they
claim that having more modular units makes it easier to rotate units to the war zone and
hence would extend the time between deployments, give soldiers more time at home
(“dwell time) and hence improve readiness. This conclusion has been questioned in
studies by both CBO and the RAND. Both studies found that modularity would only
marginally improve rotation schedules, suggesting that the basic rationale may be
weaker than typically presented. CBO estimated that the Army’s modularity initiative
would only make available an additional 6,000 to 7,000 troops.68
Congress included the funds in the FY2005 and FY2006 with some reluctance
(effectively giving the Army more room in its regular budget for two years) based on
an understanding with DOD that this funding would return to the regular budget after
FY2006 and that $25 billion was set aside for the Army in future years to cover these
costs.69
Before providing additional funds, Congress might want to ask DOD about the
effect of previous funding for modularity, specifically to quantify how much soldiers’
time at home was increased because of previous supplemental funding for modularity
beyond earlier predictions, and what the effect is expected to be for the $3.6 billion
requested in FY2007 Supplemental.
68 The RAND study argued that the types of units created were not those most needed and
CBO found that the number of additional troops available would be only 6,000 to 7,000.
RAND, Stretched Thin: Army Forces for Sustained Operations, 7-15-05;
[http://www.rand.org/pubs/monographs/2005/RAND_MG362.pdf]. CBO, An Analysis of
the Military’s Ability to Sustain an Occupation in Iraq: an Update, Oct. 5, 2005;
[http://www.cbo.gov/ftpdocs/66xx/doc6682/10-05-05-IraqLetter.pdf].
69 Program Budget Decision 753, “Other Secretary of Defense Decisions,” Dec. 23, 2004,
p. 1.
CRS-35
Growing the Force as a War Cost. Previously, Congress has provided
funding to cover “overstrength” or the cost of recruiting and retaining additional
personnel above the Army’s pre-war end strength of 482,000 and the Marine Corps end
strength of 175,000. DOD argued that these increases were required to reduce the
stress on forces and that the increases would be temporary. In January 2007, the
president announced plans to permanently increase the size of the Army and Marine
Corps by 92,000 over the next six years including the almost additional 30,000
personnel already on board.
The FY2007 supplemental includes a total of $4.9 billion to cover the military
personnel cost of additional troops plus $1.7 billion for equipment and infrastructure
for the forces to be added in FY2007. DOD promises that funding to equip future
increases in the force will be funded in the regular budget starting in FY2009.
In a reversal of its previous position, DOD now argues that the Army and
Marine Corps need to be permanently expanded by 92,000 by 2012. The president’s
proposal marks a major change and appears to assume that the United States needs to
be able to deploy substantial numbers of troops on a permanent basis. CBO estimates
that adding two divisions to the Army — roughly equivalent to the president’s proposal
— would require an additional $90 billion between FY2008 and FY2017, a major
investment.70 Congress may want to consider whether this plan is appropriately a war
expense or whether it should be debated within the context of DOD’s regular budget
in order to ensure that trade-offs against other spending are considered.
Questions About War-Related Procurement Issues. To evaluate
DOD’s procurement request, Congress may want to consider
! whether reset requirements are sufficiently firm to justify front loading
and what assumptions about force levels and the pace of operations
underlie those requests;
! whether upgrading equipment and replacing prepositioned equipment
is legitimately a war expense rather than part of ongoing
modernization initiatives already underway;
! how war funding of repair and replacement of equipment could affect
maintenance and procurement needs funded in DOD’s regular budget;
! whether upgrades requested reflect requirements of to equip deployed
or deploying forces — war-related — or the entire force; and
! whether DOD estimates of war requirements for force protection
reflect war-related requirements for deploying forces or modernization
of the entire force.
To some extent, these war-related requirements for recapitalization, modularity,
force protection, and upgrades overlap with each other and with the baseline budget
since all involve the purchase of new equipment to improve capability. Since DOD is
constantly modernizing, some of the funding for these requirements may have been
assumed in estimates for the later years of DOD’s baseline budget. DOD appears tp
70 CBO, Budget Options, February 2007, p.9-10; [http://www.cbo.gov/ftpdocs/
78xx/doc7821/02-23-BudgetOptions.pdf].
CRS-36
have shifted some of its baseline requirements to war requests because those are likely
to be more readily approved.
Shifting funding from the regular budget to emergency funding is attractive
because DOD’s emergency spending has not been subject to budget caps, allowing the
services to substitute other less urgent requirements in their baseline budgets. On the
other hand, DOD consistently faces budget pressure from unanticipated increases in the
cost of DOD’s new weapon systems tend to rise.
The FY2007 Supplemental request also includes a more than doubling of the
amounts for force protection, and substantial increases in funding Iraq and Afghan
Security Forces as well as over $1 billion for military construction funding in FY2007.
See CRS Report RL33900, FY2007 Supplemental Appropriations fo Defense, Foreign
Affairs, and Other Purposes, by Stephen Daggett et al. for additional information and
updates on these and other war issues.
Potential Readiness Issues
In recent months, service representatives and members of Congress have raised
concerns about current readiness levels, particularly the Army’s ability to respond to
the full range of potential war scenarios with trained personnel and fully-operational
equipment, a concern recently reiterated to Congress by General Pace, Chair of the
Joint Chiefs of Staff.71 According to reports, current Army readiness rates have
declined to the lowest levels since the end of the Vietnam war with roughly half of all
Army units, both active and reserve, at the lowest readiness ratings for currently
available units.72
Because DOD’s standard ratings (known as C-ratings) assess readiness relative
to the full range of standard wartime scenarios, however, they do not necessarily reflect
whether units are ready to deploy to Iraq and Afghanistan to conduct counterinsurgency
operations. For example when asked about his readiness concerns during a hearing of
the House Armed Services Committee, General Schoomaker, Chief of Staff of the
Army stated that “I have no concerns about how we are equipping, training and
manning the forces that are going across the berm into harm’s way. But I do have
continued concerns about the strategic depth of the Army and its readiness, [italics
added]” referring to other potential missions of the Army.73
General Schoomaker’s testimony may reflect an alternate DOD readiness
system that assesses units about to deploy to carry out missions that are not their
traditional ones. In this circumstance, the services use an alternate readiness reporting
system known as “Percent Effective” or PCTEF.. Unlike standard ratings, which
71 Washingtonpost.com, “General Pace: Military Capability Eroding,” Feb. 27, 2007.
72 U.S. House of Representatives, Committee on Appropriations — Democratic Staff,
“United States Army Military Readiness,” Sept. 13, 2006, pp. 2-4.
73 Transcript of hearing before House Armed Services Committee, “Hearing on Iraq Policy
Issues: Implications of the President’s Policy for Readiness, the Total Force and Strategic
Risk,” Jan. 23, 2007, p. 10.
CRS-37
largely reflect specific quantitative criteria, percent effectiveness ratings reflect a
“subjective assessment of the unit’s ability to execute its currently assigned
‘nontraditional’ mission.”74 Unit commanders are to judge whether the unit has the
required resources and is trained to carry out all (a rating of (1), most (2) , many but not
all (3), or requires additional resources (4) to carry out its specific assigned mission.)75
According to reports, however, the Army is facing shortages of certain
equipment and personnel for state-side units who are currently either training up so as
to deploy at a later date or are part of the strategic reserve who could be called upon
should other contingencies arise elsewhere. Such shortages could affect a unit’s ability
to train and be fully prepared for its various missions. At the same time, some training
limitations that are captured in a unit’s standard readiness ratings — for example, for
large-scale combat operations — may not affect a unit’s ability to conduct counter-
insurgency operations in Iraq or Afghanistan. General Schoomaker acknowledged that
for deploying units, “there is important equipment that is only available in Kuwait that
they must train on before they cross the berm,” that is training conducted shortly before
final deployment in-country.76
Another readiness concern is the fact that some active duty members are
redeploying with less than a year at home to rest and retrain raising concerns that
members may choose not to re-enlist which could create problems in meeting
recruitment and retention goals. Although there were some shortfalls in FY2005, the
Army was only 1% short of meetings its FY2006 goal of recruiting 186,000 personnel
for its active-duty and reserve forces, and retention continues to exceed goals.77
While some units re-deploy within a year, many of the individuals that make
up those units are no longer in that unit because of a new assignment. A better measure
may be the fact that of the 1.5 million individuals who have deployed for Iraq of OEF,
about 30% have had more than one deployment.78
Reserve units have also been frequently cited as short of equipment because
some equipment has been left behind in Iraq and replacement equipment has not been
delivered. Problems with reserve readiness are longstanding because until the Afghan
and Iraq operations, reservists were seldom deployed for contingencies and thus were
74 Joint Chiefs of Staff, “Chairman of the Joint Chiefs of Staff Manual 3150.02A”, p. J-4.
75 Ibid.
76 Transcript of hearing before House Armed Services Committee, “Hearing on Iraq Policy
Issues: Implications of the President’s Policy for Readiness, the Total Force and Strategic
Risk,” Jan. 23, 2007,p. 10.
77 See Tables 1, 3, and 5 in CRS Report RL32965, Recruiting and Retention: An Overview
of FY2005 and FY2006 Results for Active and Reserve Component Enlisted Personnel, by
Lawrence Kapp and Charles A. Henning.
78 Defense Manpower Data Center, “Contingency Tracking System Deployment File for
Operations Enduring Freedom & Iraqi Freedom,” As of Dec. 31, 2006.
CRS-38
traditionally given less equipment and personnel.79 Recent DOD requests include
substantial funding for new equipment for the reserves.
Some readiness concerns, like those of the reserves, are longstanding. It is not
clear how long other readiness problems have persisted or how long they will continue.
This debate about readiness has sharpened with the president’s proposal to increase
troop levels in Iraq by 21,500 and consideration of withdrawal options. Congress may
want to get estimates from the services of how long readiness problems are expected
to persist and whether problems reflect lack of resources or management problems such
as an inability to identify ongoing reset and hence ensure that equipment needed most
urgently is fixed or replaced first.
Improving War Cost Reporting
How might Congress get better, accurate information on war costs? To get
official figures and a better sense of DOD’s plans, Congress may want to consider
directing DOD to do one or more of the following:
! provide estimates of the allocations of all budget authority provided
for OIF and OEF including transfers;
! provide past, current and future estimates of average troop strength —
both deployed and total — for each operation and other key cost
drivers such as operating tempo;
! set up separate appropriation accounts for war funding to create
visibility on outlays and increase accuracy;
! compare all budget authority appropriated for war with obligations for
each operation to identify trends and reporting inconsistencies;
! explain the rationale and assumptions underlying estimates of reset
requirements to repair and replace equipment that is worn out or lost
in combat, and track amounts actually spent;
! estimate and explain how recapitalization and upgrade requirements
are related to war needs rather than ongoing modernization;
! show how funding provided in supplemental appropriations may
reduce DOD’s baseline requests by funding maintenance or
procurement earlier than anticipated;
! estimate future costs under various scenarios.
Thus far, Congress is receiving fairly detailed quarterly reporting on various
metrics for success in Iraq in its Section 9010 report but cost is not one of those
metrics. Congress may want to include detailed cost reporting for both Iraq,
Afghanistan and other counter terror operations.80 Particularly if the global war on
79 GAO-5-660, Reserve Forces: An Integrated ; GAO-06-1109T, Reserve Forces: Army
National Guard and Army Reserve Readiness for 21st Century Challenges, September 21,
2006.
80 H.Rept. 109-72, p. 97; DOD, Report to Congress, “Measuring Stability and Security in
Iraq,” July 21, 2005; [http://www.defenselink.mil/news/Jul2005/d20050721secstab.pdf].
CRS-39
terror is indeed “the long war” of indefinite duration, better cost reporting could aid
congressional oversight and assessment of emergency funding requests.
CRS-40
Appendix
Table A1. Defense Department, Foreign Operations Funding, and
VA Medical Funding for Iraq, Afghanistan and Other Global War
on Terror, and Enhanced Base Security, FY2001- FY2007 Bridge
(in billions of dollars of budget authority)a
Foreign
Public
Date
DOD
Aid
VA
Total
Name of law
Law No. Enacted Funds Embassy Medical
cost
FY2001 Emerg. Supp. Approp. Act for
Recovery from and Response to
107-38
9/18/01
13.6
0.3
0.0
13.9
Terrorist Attacks on the United States
FY2002 Dept. Of Defense and
107-117
1/10/02
3.4
0.0
0.0
3.4
Emergency Terrorism Response Act
FY2002 Emergency Supplemental
107-206
8/2/02
13.8
0.4
0.0
14.1
FY2002 Regular Foreign Operations
107-115
1/10-02
0.0
0.2
0.0
0.2
FY2003 Consolidated Approps
108-7
2/20/03
10.0
0.4
0.0
10.4
FY2003 Emergency Supplemental
108-11
4/16/03
62.6
3.3
0.0
66.0
FY2003 DOD Appropriationsb
107-48
10/23/02
7.1
0.0
0.0
7.1
FY2004 DOD Appropriations Act
(rescission of FY03 funds)
108-87
9/30/03
-3.5
0.0
0.0
-3.5
FY2004 Emergency Supplemental
108-106
11/6/03
64.9
21.2
0.0
86.1
FY2004 Foreign Operations Approps.
108-199
1/23/04
0.0
0.5
0.0
0.5
FY2005 DOD Appropriations Act,
Titles IX and Xc
108-287
8/5/04
25.0
0.7
0.0
25.7
FY2005 Supplemental Appropse
109-13
5/11/05
75.9
3.1
0.0
79.0
FY2005 Omnibus Appropriations
108-447
12/8/04
0.0
1.0
0.0
1.0
FY2005 DOD Appropriations Actd
108-287
8/5/04
2.1
0.0
0.0
2.1
FY2006 DOD Approps Act, Title IXc
109-148 12/30/05
50.0
0.0
0.0
50.0
FY2006 DOD Appropriations Actd
109-148
12/30/05
0.8
0.0
0.0
0.8
FY2006 Foreign Operations Approps.
109-102
11/14/05
0.0
1.0
0.0
1.0
FY2006 Science, State, & Rel.
Agencies Appropriations Acte
109-108 11/22/05
0.0
0.1
0.0
0.1
FY2006 Interior & Rel. Ag. Approp.f
109-54
8/2/05
0.0
0.0
0.2
0.2
FY2006 Military Quality of Life &
109-114
11/30/05
0.0
0.0
0.5
0.5
Veterans Affairsf
FY2006 Emergency Supplemental
109-234
6/14/06
66.0
3.2
0.0
69.3
FY2007 DODO Appropriations Act,
Title IXc
109-289
9/29/06
70.0
0.0
0.0
70.0
FY2007 Continuing Resolution
110-5
2/15/07
0.0
1.6
0.5
2.1
Subtotal
461.7
36.9
1.2
499.8
FY2001 Transfers
unknown
2.0
0.0
0.0
0.0
2.0
FY2003 Transfers
various
NA
1.2
0.0
0.0
1.2
FY2004 Transfers
various
NA
5.7
0.0
0.0
5.7
FY2005 Transfers
various
NA
1.5
0.0
0.0
1.5
Subtotal Transfersh
10.4
0.0
0.0
10.4
TOTAL ENACTED (w/ transfers)
NA
NA
472.1
36.9
1.2
510.2
Source: CRS calculations based on public laws and DOD documents.
CRS-41
Notes: NA=Not Applicable. Totals may not add due to rounding.
a. Totals reflect budget authority for war-related expenses from appropriations and transfers, and exclude
contingent appropriations not approved, rescissions that do not affect war-related funds, and
transfers that were later restored in supplemental appropriations.
b. Includes $7.1 billion in regular FY2003 defense appropriations for GWOT that DOD cannot track.
c. DOD’s regular appropriations bills included a separate Title IX for additional emergency
appropriations for war costs in FY2005, FY2006, and FY2007 to “ bridge” the gap between
the beginning of the fiscal year and passage of a supplemental. Title IX funds in FY2005 does
not include $1.8 billion scoring adjustment reversing previous rescission of FY2004 funds
because this did not change wartime monies.
Excludes funds for tsunami relief and for the new office for the Director of National Intelligence.
d. Reflects funds obligated for enhanced security (Operation Noble Eagle) in FY2005 and FY2006 from
DOD’s baseline funds as reported by Defense Finance Accounting Service.
e. Excludes funds for Tsunami relief.
f. Includes VA medical funds for Iraq and Afghan veterans in emergency funding in Interior bill and
in regular VA appropriations.
g. CRS estimates of likely amounts to be provided for Iraq and Afghanistan for foreign and diplomatic
operations and VA medical under the FY2007 Continuing Resolution.
h. CRS calculations of transfers from DOD’s regular appropriations to war funding based on DOD’s
1414 reports on prior approval reprogrammings and other sources.
Document Outline