Order Code RL33110
The Cost of Iraq, Afghanistan, and Other Global
War on Terror Operations Since 9/11
Updated July 16, 2007
Amy Belasco
Specialist in National Defense
Foreign Affairs, Defense, and Trade Division
The Cost of Iraq, Afghanistan, and Other Global War on
Terror Operations Since 9/11
Summary
With enactment of the FY2007 supplemental on May 25, 2007, Congress has
approved a total of about $610 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)
Afghanistan and other counter terror operations; Operation Noble Eagle (ONE),
providing enhanced security at military bases; and Operation Iraqi Freedom (OIF).
The $610 billion total covers all war-related appropriations from FY2001
through the May 25, 2007 enactment of the FY2007 Supplemental (H.R.
2206/P.L.110-28) including funds in both supplementals and regular appropriations
acts for DOD, State Department/AID, and VA Medical costs. For FY2007, funds for
Iraq and Afghanistan were appropriated in the FY2007 Supplemental, DOD’s
FY2007 Appropriations (H.R. 5631/P.L.109-289), and the Year-Long Continuing
Resolution (H.J.Res 20/P.L.110-5).
Of the $610 billion appropriated thus far, CRS estimates that Iraq will receive
about $450 billion (74%), OEF about $127 billion (21%), and enhanced base security
about $28 billion (5%), with about $5 billion that CRS cannot allocate (1%). Of this
total funding, 93% of the funds is for DOD, 7% for foreign aid programs and
embassy operations, and less than 1% for medical care for veterans.
In February 2007, the Congressional Budget Office estimated that war costs for
the next 10 years might total about $472 billion if troop levels fell to 30,000 by 2010,
or $919 billion if troop levels fell to 75,000 by about 2013. Under such assumptions
and adjusting for the FY2007 Supplemental, total funding for Iraq, Afghanistan and
the GWOT could reach from about $1 trillion to $1.45 trillion by 2017.
For DOD, war appropriations rose steeply in FY2007. DOD received $165.8
billion for war costs in FY2007 — about 40% more than the previous year. In
FY2007, the State Department will receive about $6.3. billion for Iraq and
Afghanistan for foreign and diplomatic operations, and VA medical costs for
OIF/OEF veterans will be about $1 billion, according to CRS estimates.
For FY2008, the Administration has requested $141.7 billion for DOD’s war
costs, $4.6 billion for foreign and diplomatic operations, and about $800 million for
VA medical costs. If Congress approves these requests, total funding for Iraq and the
Global War on Terror would reach about $758 billion, including about $567 billion
for Iraq, $157 billion for Afghanistan, $29 billion for enhanced security, and $5
billion unallocated.
For the first half of FY2007, CRS estimates that DOD’s average monthly
obligations for contracts and pay are running about $12 billion per month, well above
the estimated $8.7 billion in FY2006. For FY2007, obligations are about $10 billion
in Iraq, $1.9 billion in Afghanistan, and less than $100 million for enhanced security.
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
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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 . . . . . . . . . . . . . . . . . . . . . 7
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 . . . . . . . . . . . . . . . . . . . . . . . 13
Changes in 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 . . . . . . . . . . . . . . . . . . . . . . . . 19
DOD Spending Thus Far . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Changes in Average Monthly Obligations . . . . . . . . . . . . . . . . . . . . . . 22
Total Obligations to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Average Cost Per Deployed Troop and Estimates of Future Costs . . . . . . . 23
Estimates of Future Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Major War Cost Issues in the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Transparency Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Gaps and Discrepancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Uncertainty About Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Congressional Options to Affect Military Operations . . . . . . . . . . . . . . . . . 28
The FY2007 Supplemental and the FY2008 War Request . . . . . . . . . . . . . 30
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
Readiness of Afghan and Iraqi Security Forces . . . . . . . . . . . . . . . . . . 38
Improving War Cost Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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
Enacted Supplemental and FY2008 Requests . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Estimated War-Related Funding by Agency: FY2001-FY2007
Enacted Supplemental and FY2008 Requests . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Budget Authority for Iraq, Afghanistan, and Other Global War on
Terror (GWOT) Operations: FY2001-FY2007 Enacted Supplemental . . . . 9
Table 4. Average Troop Strength for Iraq, Afghanistan and other Counter-
Terror Operations and Enhanced Security in the United States . . . . . . . . . . 14
Table 5. DOD’s War Budget Authority by Title: FY2004-FY2007
Enacted Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 6. DOD’s Obligations by Operation: FY2001-November 2006 . . . . . . . . 22
Table 7. Average Annual Cost Per Deployed Troop: FY2003-FY2006 . . . . . . . 24
Table 8. Afghan and Iraq Security Forces Funding: FY2004-FY2008 Request 39
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 . . . . . . . . . . . . . . . 41
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 buildup 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 Department of Defense (DOD) war costs in FY2008, conduct oversight of past
war costs, and consider future alternatives for Iraq that range from the President’s
temporary increase in troop levels initiated this spring 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 signed contracts for goods and
services, orders placed, and pay for military and civilian personnel. In its February
2007 supplemental request, DOD reported a total of $455 billion in appropriations
for GWOT. Of that amount, DOD reported that $372 billion had been obligated
through November 2006 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, orders are
placed, 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 does not cover over $30 billion for classified programs and other funds for 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 it has estimated the breakdown in its 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 available for each operation, and allows
comparisons between fiscal years. CRS calculations of war appropriations available
to DOD exceed DOD’s estimate by more than $17 billion, probably because CRS
includes 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 Compiled by the Defense Finance Accounting Service (DFAS) monthly, these reports are
entitled “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_
Emergency_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 these funds. CBO’s estimates of war costs are about $4 billion lower than CRS
because it includes fewer transfers; see CBO, Letter to Senator Conrad, “Estimated Funding
(continued...)
CRS-3
To be complete and allow comparisons between years for each operation, CRS
estimates the allocation of 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, Table 2,
and Table 3).
Funding for Each Operation. According to CRS estimates, Congress has
appropriated about $610 billion in budget authority (BA) thus far for Iraq,
Afghanistan and enhanced security for DOD, the State Department and for medical
costs paid by the Department of Veterans’ Affairs. Based on these estimates, that
total includes about
! $450 billion for Iraq (75%),
! $127 billion for Afghanistan and other counter terrorism operations
(20%),
! $28 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 Enacted Supplemental and FY2008 Requests
(CRS estimates in billions of dollars of budget authority)
Operation & FY01 FY03a FY04b FY05b FY06
FY07 Enacted:
FY08
Cum.:
Total
&
FY01-FY07
Req.d
FY01-
FY02
Supp.c
FY08
Req.d
Iraq
0.0
53.0
75.9
84.7
101.7
135.2
450.4
116.3
566.7
OEF
20.8
14.7
14.5
20.8
18.9
36.9
126.7
30.8
157.4
Enhanced
13.0
8.0
3.7
2.1
0.8
.5
28.1
0.5
28.6
Security
Unallocated
0.0
5.5
0.0
0.0
0.0
0
5.5
0.0
5.5
TOTAL
33.8
81.1
94.1 107.6
121.5
173.0
610.5
147.5
758.1
Annual
NA
140% 16%
14%
14%
41%
NA
-16%
NA
Change
Change
NA
NA
16% 33%
50%
113%
NA
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 March
2007 and DOD estimates 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_Supplemental_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)
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 $25 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 the FY2007 Supplemental (H.R. 2206/P.L.110-28), Title IX, P.L. 109-289,
FY2007 DOD Appropriations Act (H.R. 5631) designated for war and funds for other agencies
in H.J. Res 20, P.L. 110-50, the year-long Continuing Resolution. VA Medical estimates reflect
VA FY2008 budget materials and CRS estimates. Amounts for foreign and diplomatic
operations reflect agency requests because the CR permits agencies to set country or
programmatic levels.
d. In the FY2008 request, CRS includes an estimate for enhanced security ($500 million), funded in
DOD’s baseline, as well as the cost of Iraq and Afghanistan to be consistent with previous years.
Funding for Each Agency. Of the $610 billion enacted thus far, about $568
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 that are in addition to regular military salaries, training and support activities,
and weapons procurement, RDT&E or military construction. For military personnel,
incremental costs cover hostile fire or other combat-related special pays and the cost
of activating reservists and paying them on a full-time basis. For operations and
maintenance, war costs cover the cost of transporting troops and equipment to the
war zone, conducting war operations, and supporting deployed troops, as well as
repairing and replacing equipment worn out by war operations.
Table 2. Estimated War-Related Funding by Agency:
FY2001-FY2007 Enacted Supplemental and FY2008 Requests
(CRS estimates in billions of dollars of budget authority)
by Agency
FY01 FY03 FY04 FY05 FY06
FY07 Total
FY08
Cum.: FY01-
& Total
&
Enacted
Req.
FY08
FY02
Thru FY07
Request
Supp.
DOD
33.0
77.4
72.4
102.6 116.8
165.8
568.0
142.1
State/AID
0.8
3.7
21.7
4.8
4.3
6.3
41.0
4.6
VA
0.0
0.0
0.0
0.2
0.4
1.0
1.6
.8
TOTAL
33.8
81.1
94.1
107.6 121.5
173.0
710.2
147.5
Sources: Public laws, congressional appropriations reports, and CRS estimates; see also
Table 1.
Through FY2007 appropriations, the State Department and USAID together
received about $41 billion for reconstruction, embassy operations and construction,
and various foreign aid programs for Iraq and Afghanistan. The Veterans
Administration has received about $1.6 billion for medical care for veterans of these
operations.6
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
(continued...)
CRS-5
FY2007 Supplemental and FY2008 War Cost Requests
The FY2007 Supplemental requested this February was enacted on May 25,
2007 (H.R. 2206/P.L.110-28). The act included $95.2 billion for DOD war costs for
Iraq and Afghanistan (excluding $4 billion for base closures and day-to-day
healthcare costs), about $4 billion for foreign and diplomatic operations, and about
$400 million for VA medical costs for OIF/OEF veterans. These requests were in
addition to funds a $70 billion bridge fund for Iraq and Afghanistan that Congress
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 As enacted, DOD
received $165.8 billion for FY2007, or more than 40% above 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 to cover mainly 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 about a CBO estimate in February that from $9 billion to
$27 billion — depending on whether troops stayed for 6 months or 12 — could be
needed for troops to support the five additional combat brigades 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 some leeway to conduct military operations as he sees fit. With
6 (...continued)
activities are managed by both the State Department and USAID, which handles most U.S.
development assistance programs.
7 Department of Defense Press Release, “President Bush’s FY2008 Defense Submission,”
February 5, 2007.
8 See OMB, Fiscal Year 2007 Mid-Session Review, p. 6; [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,” February 7, 2007, p. 45.
CRS-6
enactment of the supplemental, DOD can restore funds for other activities that were
temporarily tapped to fund ongoing operations, including the “surge.”
As passed, the FY2007 Supplemental included about $5.6 billion to cover the
surge plus an additional $1 billion for support troops, considerably less than the CBO
estimate. The Administration’s requests included only funding to cover the
additional troops through the end of FY2007.11 If those troops remain beyond the
end of September, DOD’s FY2008 request would presumably be inadequate unless
DOD shifted funds within its request.
FY2008 War Request. In addition to its regular or baseline FY2008 budget
request of $481.4 billion, DOD submitted a separate emergency request for war costs
for $141.7 billion to cover FY2008 war costs. That request satisfies a requirement
in the FY2007 National Defense Authorization Act and reflects a long-simmering
congressional concern about the limited visibility for war costs because funds are
provided primarily in supplementals.12
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 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.13
Key War Cost Questions
This report is designed to answer the frequently asked questions below as well
as to 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.
11 DOD, FY2007 Supplemental, p. 83;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_
Emergency_Supplemental_Request_for_the_GWOT.pdf
12 See Section 1008, P.L.109-364, FY2007 National Defense Authorization Act.
13 Office of Management and Budget, FY2008 Historical Tables, Table 5.1.
CRS-7
Potential War Cost Issues for the 110th Congress
In addition to debate about the surge or “plus-up,” 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,
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 — primarily the effectiveness of the ongoing surge in troops
and future troop levels — were joined during consideration of the FY2007
supplemental request. (See CRS Report RL33900, FY2007 Supplemental
Appropriations for Defense, Foreign Affairs, and Other Purposes, by Stephen
Daggett et al.) As in previous years, there was considerable pressure to enact
supplemental war funds quickly to minimize DOD’s need to finance war costs with
its baseline appropriations.
Passage of the FY2007 Supplemental
As in past years, Congress was under considerable pressure from DOD to pass
the FY2007 supplemental quickly in order to ensure that the Army would have
enough funds for both its wartime and peacetime operations. The FY2006
Supplemental was enacted in mid-June 2006, which the Army said created
considerable management problems. Initially, the Army claimed that the
supplemental needed to be enacted by the end of this April to avoid such problems.14
To conserve funds, the Army adopted a series of restrictions affecting non-war-
related activities. Based on estimates reflecting the slowdown, CRS and the Army
estimated that the Army had sufficient funds to last through June 2007. The
Supplemental was enacted on May 25, 2007.15
14 Army Budget Office, “OMA FY07 Spending Projections,” February 5, 2007.
15 Army Briefing, April 2007. See the section titled, "Financing Army Operations Until
Passage of the Supplemental," in CRS Report RL33900, for more details.
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). Based on passage of the
FY2007 Supplemental, annual funding will more than double again between FY2004
and FY2007, reaching $173 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
configuration, 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.
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.16 Emergency funding is exempt from
ceilings applying to discretionary spending in Congress’s annual budget resolutions.17
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.18
16 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.
17 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.
18 The exception is FY2004 when Congress appropriated $20 billion for reconstruction in
the supplemental.
CRS-9
Table 3. Budget Authority for Iraq, Afghanistan, and Other
Global War on Terror (GWOT) Operations:
FY2001-FY2007 Enacted Supplemental
(CRS estimates in billions of budget authority)
Cum.
Total
FY01
Enacted
by Operation and
&
thru FY07
Funding Source
FY02a FY02
FY03
FY04 FY05 FY06 FY07
Supp.
OPERATION IRAQI FREEDOM (OIF)b
Department of Defense
0
0
50.0
56.4
82.5 98.2
130.6
417.7
Foreign Aid and
Diplomatic Opsc
0
0
3.0
19.5
2.0
3.2
3.7
31.3
VA medicald
0
0
0
0
0.2
0.4
0.9
1.6
Total: Iraq
0.0
0.0
53.0
75.9
84.7 101.7
135.2
450.4
OPERATION ENDURING FREEDOM (OEF)/Afghanistan and GWOT
Department of Defense
9.0
11.0
14.0
12.4
18.0 17.9
34.7
116.9
Foreign Aid and
0.3
0.5
0.7
2.2
2.8
1.1
2.1
9.7
Diplomatic Opsc
VA Medicald
0
0
0
0
0
0.0
0.1
0.1
Total: OEF
9.3
11.5
14.7
14.5
20.8 18.9
36.7
126.7
Enhanced Security (Operation Noble Eagle)
Department of Defense
7.0
6.0
8.0
3.7
2.1
0.8
0.5
28.1
Total: Enhanced
Securitye
7.0
6.0
8.0
3.7
2.1
0.8
0.5
28.1
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
72.4 102.6 116.8
165.8
568.0
Foreign Aid and
Diplomatic Operationsd
0.3
0.5
3.7
21.7
4.8
4.3
6.3
41.0
VA Medicald
0
0
0
0
0.2
0.4
1.0
1.6
Total: All Missions
16.3
17.5
81.1
94.1 107.6 121.5
173.0
610.5
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 March 2007 and other information.
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_Supplemental_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, and enhanced security. 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. Figures include 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 without identifying a source for these funds.
c. Foreign operations figures include monies for reconstruction, development and humanitarian aid,
embassy operations, counter narcotics, initial training of the Afghan and Iraqi army, foreign
CRS-10
military sales credits, and Economic Support Funds. For FY2007, CRS estimates reflect
request; the State Department can set country levels under the FY2007 Continuing Resolution,
HJ Res 20/P.L. 110-5.
d. Medical estimates reflect figures in VA’s FY2008 budget justifications.
e. Known as Operation Noble Eagle, these funds provide higher security at DOD bases, support
combat air patrol, and rebuilt the Pentagon.
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 $610 billion allocated as follow
! $450 billion for Iraq (or 74%);
! $127 billion for Afghanistan (or 20%);
! $28 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 have 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 peaked 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 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.
Adjusting these estimates for passage of the FY2007 Supplemental, the cost of Iraq
and GWOT operations could reach an additional:
! $393 billion if troop levels fell to 30,000 by 2010; or
! $840 billion if troop levels fell to 75,000 by 2013.
CRS-11
This CBO estimate does not split funding for Iraq and Afghanistan. If these CBO
estimates are added to the $610 billion already appropriated, the cost of both Iraq,
Afghanistan, and enhanced security could reach from $1 trillion to $1.45 trillion by
2017 if troops fell to 40,000 or 75,000 respectively.
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. Nor is information available on many of the key factors that
determine costs such as personnel levels or the pace of operations.19
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 2004.20
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 $450 billion as of funds appropriated through the FY2007
Supplemental (H.R. 2206/P.L.110-28). 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 $50
billion in the invasions year of 2003 to about $135 billion for FY2007.
Future Iraq Costs. The total in FY2007 is about one-third higher than the
previous year and almost three times the first year (see Table 1 and Table 2).21 The
FY2008 DOD war request includes $116 billion for Iraq, about $18 billion less than
in FY2007 reflecting lower funding levels for training Iraqi security forces.
In response to a request last summer, CBO estimated the cost of two alternative
scenarios for Iraq for FY2007-FY2016 if all troop levels were to be removed by the
end of 2009 or if the number of deployed troops fell to 40,000 by 2010. Adjusting
CBO’s estimates for passage of the FY2007 Supplemental, a withdrawal by FY2009
19 CRS adjusted the CBO estimates by subtracting $70 billion for the additional funding
assumed by CBO for FY2007; see Letter to Chair, Senate Budget Committee, Kent Conrad,
“Summarizing and projecting funding for Iraq and GWOT under two scenarios,” February
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,” January 18, 2007.
20 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.
21 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.
CRS-12
could cost an additional $147 billion while a reduction to 40,000 troops by 2010
could cost an additional $318 billion.22 CBO has not estimated the cost of a more
immediate withdrawal.
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? As of enactment of the FY2007
Supplemental, Afghanistan has received about $127 billion in appropriations for
DOD, foreign and diplomatic operations, and VA medical. In recent years, funding
for Afghanistan was about $20 billion annually but is slated to jump by 75% to about
$37 billion in FY2007 (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 $17
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), and $510 million for the 7,200 additional troops. The reasons for the rest
of the increase are not clear.
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. These decreases reflect the end of one-time costs like Pentagon reconstruction
($1.3 billion), the completion of security upgrades, the scaling back of combat air
patrol (about $1.3 billion for around-the-clock coverage), and a cut in the number of
reservists guarding bases.23 In FY2004, the cost of enhanced security more than
halved again, dropping to $3.7 billion.
Beginning in FY2005, DOD funded this operation in its baseline budget rather
than in supplementals and costs fell to under $1 billion in FY2006 (See Table 3).
The services are now requesting funds for base security in the United States as a war
cost in the FY2007 and FY2008 Supplemental, which could overlap with the
enhanced security mission.
22 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 adjusted
CBO’s estimate by subtracting the amount assumed for FY2007.
23 DOD’s new estimate for ONE is $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
Difficulties in Explaining DOD’s War Costs
What makes war costs change? Changes in war costs would be expected to vary
with troops levels, war-related benefits, 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.
A list of the primary 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 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,
2006.24 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.
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.25
24 DOD, Information Paper, “Congressional Research Service Request for Boots on the
Ground (BOG) Statistics for Iraq and Afghanistan, January 1, 2007,” 1-2-07.
25 DOD, FY2007 Emergency Supp, p. 16. [http://dod.mil/comptroller/defbudget/
fy2008/fy2007_supplemental/FY2007_Emergency_Supplemental_Request_for_the_GWOT.pdf].
CRS-14
In FY2004, the first year of occupation, DOD figures show average troop
strength for all three missions of 304,000. In its FY2007 Supplemental request, DOD
projected a total of about 319,000 troops, a 5% increase since FY2004. Costs would
more than double from $72 billion in FY2004 to $166 billion for FY2007 (see Table
3).
Table 4. Average Troop Strength for Iraq, Afghanistan and
other Counter-Terror Operations and Enhanced Security
in the United States
(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
NAb
47
87
84
64
49
46
State-sidea
All OIF/OEF/ONE
51
125
313
304
323
319
302
Military Personnel
Note: 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.
a. 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.
b. Not available.
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
about 220,000 to 250,000 or by about 13% whereas funding levels increased by 60%
(see Table 5). If the planned “plus-up” of about 35,000 troops increases average
troop strength by roughly 10,000 (taking into accounts dips earlier in the year and the
fact that additional troops would be in place for only part of the year), that would
bring troop strength for FY2007 to about 260,000 or about 17% above FY2004. At
the same time, DOD’s enacted funding for FY2007 is more than double the amount
in FY2004. Changes in troop strength do not explain such increases. Defense
Manpower Data Center does not show average troop strength data by operation.
CRS-15
Table 5. DOD’s War Budget Authority by Title:
FY2004-FY2007 Enacted Supplemental
(in billions of dollars)
Title
FY04
FY05
FY06
FY07
Military Personnel
17.8
19.7
16.7
18.8
Operation & Maintenance
42.0
47.9
60.0
75.0
Defense Health
0.7
1.0
1.2
3.0
Other Defense Programsa
0.1
0.2
0.2
0.4
Procurement
7.2
18.0
22.9
45.4
Research, Dev., Tstg. & Eval.
0.4
0.6
0.8
1.5
Working Capital Fundsb
1.6
3.0
3.0
1.1
Military Construction
0.5
1.2
0.2
1.7
Subtotal: Regular Titles
70.3
91.7
105.1
146.9
Special Funds and Caps
Iraqi Freedom Fund (IFF)
2.0
3.8
3.3
0.4
Afghan Sec. Forces Training Fd.c
0.0
1.3
1.9
7.4
Iraq Security Forces Training Fdc
[5.0]
5.7
3.0
5.5
Joint Improvised Explosive Device (IED) Defeat
Fdd
0.0
0.0
3.3
4.4
Strategic Reserve Readiness Fd.d
0.0
0.0
0.0
1.6
Coalition Support Cape
[1.2]
[1.2]
[.9]
[1.1]
Lift and sustain Capf
[0]
[0]
[.4]
[.3]
Global lift and sustain Cape
[0]
[0]
[0]
[0]
Global train and equip Cape
[0]
[0]
[.1]
[0]
Cmdrs’ Emerg.Response Cape
[.2]
[.8]
[.9]
[1.0]
Special Transfer Authority Capf [3.0]
[3.0]
[4.5]
[3.5]
Subtotal: Special Funds
2.0
10.7
11.5
19.3
Dept. of Defense Total
72.3
102.4
116.7
166.2
Coast Guard Transfer
0.0
[.2]
[.1]
[.2]
Intell. Comm. Mgt Fund
0.0
0.3
0.2
0.1
Def. Nuclear Nonproliferation
0.0
0.0
0.0
0.1
Salaries & Expenses, FBI
0.0
0.0
0.0
0.1
Subtotal: Defense-Relatedg
0.0
0.3
0.2
0.3
National Defense Total
72.3
102.6
116.8
166.5
Sources: CRS calculations based on H.Rept. 110-60, S.Rept. 110-37, H.Rept. 110-107, H.R. 1591
and H.R. 2206 as passed by both houses, and “additional explanatory materials in the Congressional
Record, May 24, 2007, p. H.8506ff. submitted by Congressman Obey, Chair of the House
Appropriations Committee.
Note: This table separates funds with special purposes such as the Afghan Security Forces Fund from
the regular titles to better identify trends. For FY2007, request reflects amended FY2007 supplemental
submission of March 9, 2007; see OMB, Appendix: FY2008 Budget, “Other Materials: FY2007
Supplemental and FY2008,” February 5, 2007 for original request, p. 1143ff; [http://www.whitehouse
.gov/omb/budget/fy2008/pdf/appendix/sup.pdf]. For amended request, see OMB, “Estimate No. 3,”
[http://www.whitehouse.gov/omb/budget/amendments/amendment_3_9_07.pdf]. Includes transfers
from baseline accounts to war to meet unanticipated needs through FY2005.
a. “Other Defense Programs” includes counter drug and Office of Inspector General funds.
b. Working capital funds finance additional inventory for support items such as spare parts.
CRS-16
c. Training Iraqi security forces was initially funded in the State Department [ shown in brackets ] but
is now funded in DOD. The Afghan Army also received some State Department funds.
d. The Joint IED Defeat Fund finances responses to IED attacks through transfers to procurement,
RDT&E, and operation and maintenance programs. Initially, Congress appropriated $1.4 billion
for IED Defeat to the Iraq Freedom Fund and then appropriated $1.9 billion to a separate new
account, the Joint IED Defeat Fund. The $3.3 billion total for FY2006 includes both amounts.
e. Congress sets caps on different types of coalition support — reimbursements to allies conducting
operations or logistical support for OIF and OEF, and lift, support, training and equipping of
allies conducting other counter-terror operations. Congress also sets a cap on CERP, a program
which permits military commanders to fund small-scale reconstruction projects in Iraq and
Afghanistan.
f. Congress sets the amount of transfer authority in each bill. The table includes amounts provided for
both bridge and supplemental funds. Includes $10.4 billion for Iraq Freedom Fund in FY2003
(deducting specified floors) plus $2 billion in transfer authority.
g. Defense-related programs are included in the national defense budget function.
Military personnel funding has hovered between $16 billion and $20 billion a
year (see Table 5). About half of the $16 billion for war-related military personnel
is for the cost of full-time pay and benefits to the 150,000 reservists to110,000
reservists who have been activated each year since FY2004, with the number falling
in recent years.26
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 initially argued that the increases would be temporary but in the
FY2007 Supplemental, the Defense Department requested that these increases be part
of a permanent expansion of the Army and Marine Corps, an issue still to be
resolved.
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.27
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
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 often available for only one deployment.
26 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.”
27 GAO, FY2004 Costs for Global War on Terrorism Will Exceed Supplemental, July 2004
[http://www.gao.gov/new.items/d04915.pdf].
CRS-17
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.28 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 serving 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 cost of active-duty personnel — special pays — is less than
paying full-time salaries to reservists. Budget authority for military personnel dips
in FY2006 but rises again in FY2007 (see Table 5). At the same time, military
personnel costs increase 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 billion in FY2006,
possibly a reporting error.29 Although the Administration announced in January 2007
that these increases would be permanent in order to sustain higher deployments for
the Global War on Terror, DOD requested the funds in the FY2007 supplemental as
an unanticipated emergency expense.
28 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 the Total
Force,” January 19, 2007.
29 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and September
2006, “DoD Totals.”
CRS-18
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; and
! a $2 billion increase in command, communications, control,
computers and intelligence support.30
With the exception of force protection gear where congressional interest has been
high, DOD has provided little explanation for these changes.
With enactment of the FY2007 Supplemental, operating costs will jump from
$60 billion in FY2006 to $75 billion in FY2007 or by 25%. 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), a doubling in
transportation costs for unspecified reasons ($2 billion), increased LOGCAP
contractor support ($300 million), and higher operating tempo.31 These factors
account for some but not all of the increase though the rationales for the changes are
often not clear.
Changes in Investment Costs. Since FY2004, the rise in investment costs
has been dramatic — about a sixfold increase from $7.2 billion in FY2004 to $45
billion in FY2007. Procurement almost doubles between FY2006 and FY2007.
Investment costs include procurement, RDT&E and military construction. As a share
of DOD war appropriations, investment monies grew from about 10% in FY2004 to
about 20% in FY2006 and about 29% in FY2007. Since FY2003, DOD has received
about $93.5 billion in war-related procurement funds — about $11 billion more than
received by DOD in its regular baseline budget in FY2007 (see Table 5).32
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
30 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and September
2006, “DoD Totals.”
31 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].
32 DOD received $80.9 billion for procurement in FY2006; see H.Rept. 109-676, p. 135.
CRS-19
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 do not fully explain the scope of increases thus far or sort out
whether the new requests are war-related emergencies rather than being part of
ongoing modernization or transformation programs. DOD has provided little
rationale or explanation for its requirements or changes 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 its relationship to current 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
criterion. 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 receiving an additional $1.7 billion for
military construction, almost doubling the previous peak in FY2005. Funding for
military construction has been 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 and the FY2007 Supplemental continues a
prohibition on spending funds to set up permanent bases in Iraq.
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 allow 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
CRS-20
! 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;
! 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
$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
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).
34 H.Rept. 107-593, p. 17 and 128.
35 Congress rescinded $3.5 billion of the $15.6 billion originally appropriated to the IFF and
included ceilings for certain purposes, such as intelligence, within the total.
CRS-21
! various types of coalition support which pays U.S. allies for their
logistical support in counter-terror operations related to OIF and
OEF or other counter-terror operations; 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 estimated that war-related
obligations total $372 billion and average monthly obligations were about $10 billion
including $8.6 billion for Iraq and $1.4 billion for Afghanistan (see Table 6 below).
(This and the following section will be revised in a later update to reflect more recent
data.)
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 over $30 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.
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 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
through November 2006.36 Average obligations are a better indicator of ongoing
operational costs than investment costs because these funds must be obligated — put
in contract — within the first year. For investment costs, average monthly
obligations lag appropriated budget authority since only some funds are obligated in
the first year because of the time for the planning and negotiation of contracts.
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-22
Table 6. DOD’s Obligations by Operation: FY2001-November
2006
(in billions of dollars)
DOD
Average monthly obligationsa
Reported
FY06
FY07
Cum. Obs
Mission and type of
DFAS
(Nov.
from FY01-
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.
b. Includes funds appropriated for military personnel, operation and maintenance, working capital,
and defense health.
c. Includes funds appropriated for procurement, RDT&E, and military construction.
d. Operation Enduring Freedom funds Afghanistan and other global war on terror (GWOT) activities.
e. ‘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.
Changes in Average Monthly Obligations. Based largely on DOD
accounting reports, average monthly obligations grew from $6.2 billion to $8.8
billion, an increase of about 40% with the most rapid increase in Iraq. 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 — have 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.)
CRS-23
As of 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 As of March 31,
2007 – halfway through the fiscal year – these rates have increased to about $10
billion for Iraq and $1.9 billion for Afghanistan (Table 6 will be revised in a later
update to reflect these figures.)
The monthly average for enhanced security (Operation Noble Eagle) has fallen
substantially from $520 million per month in FY2003 to less than $100 million 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 19% 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).
37 CRS estimates would be somewhat higher.
CRS-24
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
8%
Investment costsc
$20,000 $40,000 $80,000 $65,000 225%
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), whereas 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 would
begin to change in proportion with personnel levels if higher troop levels persist or
if troops are withdrawn.
Since FY2003, the estimated 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 the $166 billion enacted) to
! $124 billion in FY2008;
! $78 billion n FY2009;
! $42 billion in FY2010;
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.
CRS-25
! $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 to
! $144 billion in FY2008;
! $133 billion in lFY2009;
! $112 billion in FY2010;
! $91 billion in FY2011;
! $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.
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 issue of transparency in war costs;
! congressional mechanisms for affecting troop levels;
! defining reset and upgrade requirements; and
! 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 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
39 See Table 1 in CBO, Letter to Senator Kent Conrad, “Estimated Funding for Operations
in Iraq and the War on Terrorism,” February 7, 2007; [http://www.cbo.gov/
ftpdocs/77xx/doc7793/02-07-CostOfWar.pdf].
40 James A. Baker, III, and Lee H. Hamilton, Co-Chairs, The Iraq Study Group Report (New
(continued...)
CRS-26
— 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 both include these funds. In 2005, GAO also found that DOD planning
documents included $10 billion in each year for GWOT for the next five years that
also cannot be identified.44 It also appears that DOD used about $2.5 billion from an
unidentified source (probably from DOD’s baseline funds) to prepare for the invasion
of Iraq in the summer and fall of 2002 before Congress approved the resolution
approving the use of force in Iraq in October 2003.45
40 (...continued)
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,
at [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.
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,
September 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 the FY2003
Supplemental, which provided funds for the Iraq invasion in the spring of 2003 probably from
DOD’s baseline funds. Some $700 million in such funding are mentioned in Bob Woodward’s
book, Plan of Attack. This account was disputed by then-Deputy Defense Secretary Wolfowitz.
DOD’s most recent justification material for its FY2007 Supplemental Request also appears to
include these funds because the $48 billion shown as Iraq obligations in FY2003 obligations
exceeds by $2 billion the total reported by DFAS. CRS estimates also include intelligence funds
not captured by DFAS.
CRS-27
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 may not to be captured. 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 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 follows more of a
standard budget format showing not only the new request but also funding in
FY2006, previous enacted bridge funds for FY2007, the full year’s funding in
FY2007 if the request is enacted, a considerable improvement over previous
requests. Unlike DOD’s regular requests, the supplemental does not include funds
two years prior to the request or for FY2005. Despite this improvement, some of the
FY2006 figures do not match those reported in the DFAS reports, which raises
questions about the accuracy of those reports. And only the Army includes the same
categories as those used in the DFAS reports making comparisons to prior years
difficult if not impossible.
Both CBO and GAO have raised concerns about the fact that DOD obligations
reporting classifies large portions of funding as “other services and miscellaneous
contracts,” a category too vague to be useful. Because of these and other limitations
– such as the lack of performance metrics, limited detail on costs, and no outlay
figures – estimates of the cost of alternative troops levels are difficult to make.49
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.
49 CBO, Letter to Senator Conrad, Estimated Funding for Operations in Iraq and the Global
(continued...)
CRS-28
Uncertainty About Figures. DOD has also periodically revised the figures
shown for each operation in previous years suggesting questions about the accuracy
of its figures. 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, later revised to $42.4 billion. Most recently, DOD reports show $48 billion
for Iraq in FY2003, which include not only obligations in later years but also $2
billion from an unknown source.50
The Comptroller General 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.51 Some suggest that an audit by the
Department of Defense Inspector General might 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
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.52
Congressional Options 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. Most observers would maintain that restrictions tied to appropriations have
been more effective. (For an analysis of the legal issues in restricting military
operations, see CRS Report RL33837, Congressional Authority to Limit U.S.
Military Operations in Iraq, by Jennifer K. Elsea, Michael John Garcia, and Thomas
J. Nicola. For examples of past enacted and proposed 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 recent
proposals to restrict military operations, see CRS Report RL33900, FY2007
49 (...continued)
War on Terror, February 7, 2007. [http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-
CostOfWar.pdf].
50 Office of Secretary of Defense, Comptroller, Table with corrected DFAS figures; see
DOD, FY2007 Supp, Figure 2 for new obligations figures, p. 93; CRS added up figures in
DFAS reports for September 2004, FY2005, and FY2006 for OIF from FY2003 monies.
51 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].
52 DOD’s Contingency Operations Support Tool (COST) model is used to predict most
operating costs.
CRS-29
Supplemental Appropriations for Defense, Foreign Affairs, and Other Purposes, by
Stephen Daggett et al.)
Restrictive funding options generally prohibit the obligation or expenditure of
current or previously appropriated funds. Obligations occur when the government
pays military or civilian personnel, or the services sign contracts or place orders to
buy goods or services. Expenditures, or outlays, take place when payment is
provided.
Past attempts or provisions to restrict funding have followed 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 approaches to restrict military operations have:
! required that troops be withdrawn by a specified date in the future or
at the “earliest practical date;”
! withdrawn funds unless there was a declaration of war or a specific
congressional authorization of the war activities; or
! repealed previous congressional resolutions authorizing military
activities.
One or both houses may also state a “sense of the Congress,” or non-binding
resolution that does not need to be signed by the President that U.S. military
operations should be wound down or ended or forces withdrawn.
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, the well-
known Cooper-Church provision that prohibited the introduction of U.S. ground
troops into Cambodia was enacted in early 1971 after U.S. forces had invaded and
then been withdrawn from Cambodia; that provision was intended to prevent the re-
introduction of troops.53
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
53 See discussion and language of the Cooper-Church amendment (Sec.7, P.L. 91-652) in
CRS Report RL33803, Congressional Restrictions on U.S. Military Operations in Vietnam,
Cambodia, Laos, Somalia, and Kosovo: Funding and Non-Funding Approaches.
CRS-30
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.”54 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.
Several well-known proposals that were not enacted — two McGovern-Hatfield
amendments and an earlier Cooper-Church amendment — were also part of this
Vietnam Era jockeying between the Administration and Congress. One McGovern-
Hatfield amendment prohibited expenditure of previously appropriated funds after
a specified date “in or over Indochina” except for the purpose of withdrawing troops
or protecting our Indochinese allies while another also prohibiting spending funds to
support more than a specified number of troops unless the president notified the
Congress of the need for a 60 day extension. The earlier Cooper-Church amendment
prohibited the expenditure of any funds after July 1, 1970 to retain troops in
Cambodia “unless specifically authorized by law hereafter.”55
Generally, Congress continued to provide funds for U.S. troops in Vietnam at
the requested levels 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.56
The FY2007 Supplemental and the FY2008 War Request
When the Administration submitted its requests for a FY2007 Supplemental and
FY2008 war costs, Congressional leaders indicated that these would be more closely
scrutinized. For FY2008, the Administration is requesting $141.7 billion for war
costs, somewhat less than in FY2007 but about 20% more than in FY2006. (For
Congressional action on the FY2007 Supplemental, See CRS Report RL33900,
FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other
Purposes, by Stephen Daggett et. al.)
Although the Administration classified both requests as emergency funds, much
of the funding 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.57
54 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.
55 See H.R. 17123, H.R. 6531, and H.R. 15628 in Table 1 and Appendix of CRS Report
RL33803.
56 CRS Report RS20775, Congressional Use of Funding Cutoffs Since 1970 Involving U.S.
Military Forces and Overseas Deployments, by Richard F. Grimmett.
57 CRS Report RL33405, Defense: FY2007 Authorization and Appropriations, by Stephen
(continued...)
CRS-31
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 required 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.”58 (Little of this information was
provided to Congress in DOD’s requests.)
In the July 19, 2006 guidance to the services for developing the FY2007
Supplemental and FY2008 war cost requests, these strictures were reiterated. 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.”59 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.
On October 25, 2006, Deputy Secretary of Defense Gordon England issued new
guidance for requesting war funds to the services, requiring them to submit new
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.60 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 appeared to open the way for including a far broader range of
requirements particularly since the needs of the “longer war” are relatively undefined.
In its review of the FY2007 Supplemental, the appropriators rejected certain
procurement and depot maintenance requests as either unexecutable or not clearly an
emergency. (See CRS Report RL33900, FY2007 Supplemental Appropriations for
Defense, Foreign Affairs, and Other Purposes, by Stephen Daggett et al.) Since the
long war on terror is now part of DOD’s key missions according to the national
57 (...continued)
Daggett.
58 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].
59 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.
60 Deputy Secretary of Defense Gordon England, Memorandum for Secretaries of the
Military Departments, “Ground Rules and Process for FY’07 Spring Supplemental,”
October 25, 2006.
CRS-32
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 — $20.4 billion in FY2006, $39.7 billion in
FY2007, and $32.9 billion in FY2008. Much of this increase may 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 initially requested $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 withdrew several of these requests, possibly in anticipation that
Congress would cut these aircraft.
Front Loading Reset Funding. The FY2007 Supplemental included an
additional $14 billion for reset — the replacement of war-worn equipment. DOD’s
request appears to front load (or fund in advance) DOD’s reset requirements, a fact
acknowledged by then-OMB Director Robert Portman in recent testimony.61
According to DOD figures, Army and Marine Corps reset requirements were fully
met in the enacted FY2007 bridge fund when Congress provided $23.7 billion for
Army 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 enactment of the FY2007 Supplemental, DOD has received about $64 billion
for reset, which 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.
61 Testimony of OMB Director Robert 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, August 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.
63 See CRS Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign
Affairs, and Other Purposes, by Stephen Daggett et al; for definition, see 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.
CRS-33
The FY2007 Supplemental and the FY2008 war request both appear to include
an extra year of Army and Marine Corps reset requirements. According to statements
by Army Chief of Staff, General Peter J. Schoomaker and other military spokesman,
Army reset is 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” 64
According to Marine Corps Commandant, General Michael Hagee, their
requirements are about $5 billion a year for a total of about $17 billion for the two
services most heavily affected.65 DOD estimated that reset would total $37.5 billion
in FY2007 and in FY2008 based on its requests, which was largely supported by
Congress in FY2007.66 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 reflect the stress on equipment from
operations, the accuracy of the Army’s estimates has not been determined. 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, making it more difficult to
assess the accuracy of DOD’s requests.67 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. Service estimates of requirements have changed
over the past couple of years. In a September 2006 report to Congress, for example,
annual reset requirements in FY2008 were estimated to be $13 billion for the Army
and about $1 billion for the Marine Corps.68 Several months earlier in the spring of
2006, 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 a
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; see also testimony of Brigadier General Charles Anderson, U.S.
Army, House Armed Services Subcommittee on Readiness and Subcommittee on Air and
Land Forces Hold, transcript, “Joint Hearing on Costs and Problems of Maintaining Military
Equipment in Iraq,” January 31, 2007, p. 6.
65 Testimony of General Michael Hagee, Marine Corps Commandant before the House
Armed Services Committee, “Army and Marine Corps Reset Strategies for Ground
Equipment and Rotor Craft,” June 27,2006, p. 41.
66 DOD, FY2008 Global War on Terror Request, February 2007, Table 3;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2008_Glob
al_War_On_Terror_Request.pdf] hereinafter, DOD, FY2008 GWOT Request.
67 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.
68 Office of the Secretary of Defense, Report to the Congress, “Long-Term Equipment
Repair Costs,” September 2006, p. 24 and p. 25..
CRS-34
year if troops were withdrawn over a two-year period.69 A year earlier, 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.70
DOD’s definition of reset now includes not only replacing battle losses
(typically about 10% of the total), equipment repair (about half) but also
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
actually incremental wartime requirements.
Modularity as an Emergency Expense. The distinction between war-
related and regular funding has also ben 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
included $3.6 billion to convert two Army brigade teams and create an additional
Marine Corps regimental combat team highlighting the issue of whether funds that
are part of DOD’s regular requirements are being shifted to emergency funding.
DOD argued that these costs should be considered war-related because having
more modular units makes it easier to rotate units to the war zone and hence would
extend the time between deployments giving soldiers more time at home, or “dwell
time” and hence improving readiness. This conclusion has been questioned in
studies by CBO and the RAND. Both studies found that modularity would only
marginally improve rotation schedules. CBO estimated that the Army’s modularity
initiative would only make available an additional 6,000 to 7,000 troops.71
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
69 Army Briefing, “Army Equipment Reset Update,” May 18, 2006, p. 8.
70 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 April 6, 2005, p. 2.
71 The RAND study argued that the types of units created were not those most needed.
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, October 5, 2005;
[http://www.cbo.gov/ftpdocs/66xx/doc6682/10-05-05-IraqLetter.pdf].
CRS-35
FY2006 and that $25 billion was set aside for the Army in future years to cover these
costs.72 Congress appears to have approved these costs in FY2007 as well.
DOD does not estimate the effect of either its previous or new funding for
modularity on the amount of time soldiers have at home between deployments.
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 has 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 30,000
additional personnel already on board.
The FY2007 supplemental included 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 argued 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 $108 billion between FY2008
and FY2017, a major investment.73
Questions About War-Related Procurement Issues. To evaluate
DOD’s war-related procurement requests, 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 actually a war expense rather than a part of ongoing
modernization initiatives;
! 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 to equip deployed
or deploying forces — war-related — or the entire force; and
72 Program Budget Decision 753, “Other Secretary of Defense Decisions,” December 23,
2004, p. 1.
73 CBO, Budget Options, February 2007, p.9-10; [http://www.cbo.gov/ftpdocs/
78xx/doc7821/02-23-BudgetOptions.pdf].
CRS-36
! 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 each other and 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 to
have shifted some of its baseline requirements to war requests.
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 its new weapon systems.
The FY2007 Supplemental 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 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.74 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.75
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
74 Washingtonpost.com, “General Pace: Military Capability Eroding,” February 27, 2007.
75 U.S. House of Representatives, Committee on Appropriations — Democratic Staff,
“United States Army Military Readiness,” September 13, 2006, pp. 2-4.
CRS-37
way. But I do have continued concerns about the strategic depth of the Army and its
readiness,” referring to other potential missions of the Army [italics added].76
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 largely
reflect specific quantitative criteria, percent effectiveness ratings reflect a “subjective
assessment of the unit’s ability to execute its currently assigned ‘nontraditional’
mission.”77 Unit commanders are to judge whether the unit has:
! the required resources and is trained to carry out all missions (a
rating of 1);
! most of its missions (a rating of 2);
! many but not all of its missions (a rating of 3); or
! requires additional resources to carry out its assigned missions (a
rating of 4).78
According to reports, 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. In testimony in January 2007,
however, then-Army Chief of Staff, General Peter 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.79
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 meeting its FY2006 goal of recruiting 186,000 personnel
for its active-duty and reserve forces, and retention continues to exceed goals.80
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,” January 23, 2007, p. 10.
77 Joint Chiefs of Staff, “Chairman of the Joint Chiefs of Staff Manual 3150.02A”, p. J-4.
78 Ibid.
79 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,” January 23, 2007,p. 10.
80 See Tables 1, 3, and 5 in CRS Report RL32965, Recruiting and Retention: An Overview
(continued...)
CRS-38
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 new assignments. 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.81
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 traditionally given less equipment and fewer personnel.82 Recent DOD
requests include substantial funding for new equipment for the reserves.
While 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 decision to
increase troop levels in Iraq and Afghanistan by about 35,000 and congressional
consideration of withdrawal options. At issue may be 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 that is needed most urgently is fixed or replaced first.
Readiness of Afghan and Iraqi Security Forces. Congress has raised
considerable concerns about the readiness of Afghan and Iraqi security forces.
Despite concerns about the effectiveness of training efforts thus far, Congress has
provided full funding of DOD’s request in the FY2007 Supplemental because of the
high stakes involved. With passage of the supplemental, annual appropriations to
train and equip Afghan forces grow from $1.9 billion in FY2006 to $7.4 billion in
FY2007. For Iraqi security forces, FY2007 appropriations increase from $4.9 billion
in FY2006 to $5.5 billion in FY2007. Thus far, Congress has provided a total of
$30.2 billion for these purposes, including $19.2 billion for Iraq and at least $10.6
billion for Afghanistan (see Table 8).83
It is not clear whether these increases can be absorbed effectively in both
countries. As of March 2007, DOD had available about $1.9 billion for Iraqi
training and about $300 million for Afghan training from prior year monies. With
the funds appropriated in FY2007 supplemental, DOD will have a total of $7.5
billion for the Iraq Security Forces Fund (ISFF) and $6.1 billion for the Afghanistan
80 (...continued)
of FY2005 and FY2006 Results for Active and Reserve Component Enlisted Personnel, by
Lawrence Kapp and Charles A. Henning.
81 Defense Manpower Data Center, “Contingency Tracking System Deployment File for
Operations Enduring Freedom & Iraqi Freedom,” As of December 31, 2006.
82 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.
83 Total includes $5 billion appropriated to the State Department for Iraq training in FY2004.
Afghanistan has also received funding for its training from State Department accounts.
CRS-39
Security Forces Fund (ASFF) to spend over the next 18 months based on DOD
accounting reports. By way of comparison, DOD obligated $5.1 billion for Iraq and
$1.8 billion for Afghanistan in FY2006.84
To monitor progress, Congress required in the FY2007 Supplemental that by
September 22, 2007, DOD submit an assessment by a private entity of the capability
of the Iraqi Security Forces to provide security within the next 12 to 18 months and
the “likelihood that, given the ISFF’s record of preparedness to date ... the continued
support of U.S. troops will contribute to the readiness of the ISF to fulfill” its
missions (see Section 1313 (e) (2)).85 The final version also requires a DOD report
on the readiness of individual Iraqi units within 30 days, a detailed report by OMB
on individual projects, and an estimate of the total cost to train both Iraqi and Afghan
security forces within 120 days with updates every 30 days (Sec. 3301).
Table 8. Afghan and Iraq Security Forces Funding:
FY2004-FY2008 Request
(in billions of dollars)
Account
FY04
FY05
FY06
FY07
FY07
FY07
Total
FY08
Budg.
Supp.
Total
Enacteda
Req.
Afghan Security Forces
[.348]a
1.285
1.908
1.500
5.906
7.406
11.136
2.700
Funda
Iraq Security Forces
[5.000]a
5.700
3.007
1.700
3.842
5.542
19.251
2.000
Funda
TOTALa
[5.339]
6.985
4.915
3.200
9.748
12.948
30.187
4.700
Notes and Sources:
a. Figures in [ ] brackets are funds to train Iraqi security forces that were appropriated to the State Department; later
funds were appropriated to DOD. Iraq total includes enacted funds from all sources. Afghanistan total does not
include about $1 billion to $2 billion that Afghan security forces received in FY2004 and FY2005 through State
Department or foreign military sales financing according to GAO-05-575, Afghanistan Security: Efforts to
Establish Army and Police Have Made Progress, but Future Plans Need to Be Better Defined, June 2005, p. 9.
Figures reflect CRS calculations from public laws and conference reports.
Improving War Cost Reporting
How might Congress get better, accurate information on war costs? To provide
Congress a better basis for oversight, DOD could:
! provide estimates of the allocations of all budget authority provided
for OIF and OEF including transfers;
84 CRS calculations based on Defense Finance and Accounting Service (DFAS),
Supplemental & Cost of War Execution Reports, September 2006 and March 31, 2007;
ASFF and ISFF funds are available for two years.
85 Sec. 1313, P.L.110-28 requires that the report is to be submitted to the armed services,
appropriations, foreign relations, international relations, and intelligence committees of both
houses 120 days after enactment.
CRS-40
! 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.
In its Section 9010 report, DOD provides Congress with fairly detailed quarterly
reporting on various metrics for success in Iraq – ranging from average daily hours
of electrical power by province to average weekly attacks on civilians, Iraq Security
Forces and coalition forces – but measures of U.S. military costs are not required.
Detailed reporting of different military costs and troop levels could be included as a
metric for assessing operations Iraq, Afghanistan and other counter terror
operations.86 Particularly if the global war on terror is indeed “the long war” of
indefinite duration, better cost reporting could aid congressional oversight and
assessment of emergency funding requests.
86 H.Rept. 109-72, p. 97; DOD, Section 9010 Report to Congress, “Measuring Stability and
Security in Iraq;”[http://www.defenselink.mil/pubs/iraq_measures.html].
CRS-41
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
Public Law
Date
DOD
Foreign Aid
VA
Total
Name of law
No.
Enacted
Funds
Embassy
Medical
cost
FY2001 Emerg. Supp. Approp. Act for
Recovery from and Response to Terrorist
P.L. 107-38
9/18/01
13.6
0.3
0.0
13.9
Attacks on the United States
FY2002 Dept. Of Defense and Emergency
P.L. 107-117
1/10/02
3.4
0.0
0.0
3.4
Terrorism Response Act
FY2002 Emergency Supplemental
P.L. 107-206
8/2/02
13.8
0.4
0.0
14.1
FY2002 Regular Foreign Operations
P.L. 107-115
1/10-02
0.0
0.2
0.0
0.2
FY2003 Consolidated Approps
P.L. 108-7
2/20/03
10.0
0.4
0.0
10.4
FY2003 Emergency Supplemental
P.L. 108-11
4/16/03
62.6
3.3
0.0
66.0
FY2003 DOD Appropriationsb
P.L. 107-48
10/23/02
7.1
0.0
0.0
7.1
FY2004 DOD Appropriations Actb P.L.
108-87
9/30/03
-3.5
0.0
0.0
-3.5
FY2004 Emergency Supplemental
P.L. 108-106
11/6/03
64.9
21.2
0.0
86.1
FY2004 Foreign Operations Approps.
P.L. 108-199
1/23/04
0.0
0.5
0.0
0.5
FY2005 DOD Appropriations Act, Titles
IX and Xc
P.L. 108-287
8/5/04
25.0
0.7
0.0
25.7
FY2005 Supplemental Appropse
P.L. 109-13
5/11/05
75.9
3.1
0.0
79.0
FY2005 Omnibus Appropriations
P.L. 108-447
12/8/04
0.0
1.0
0.0
1.0
FY2005 DOD Appropriations Actd
P.L. 108-287
8/5/04
2.1
0.0
0.0
2.1
FY2006 DOD Approps Act, Title IXc
P.L. 109-148
12/30/05
50.0
0.0
0.0
50.0
FY2006 DOD Appropriations Actd
P.L. 109-148
12/30/05
0.8
0.0
0.0
0.8
FY2006 Foreign Operations Approps.
P.L. 109-102
11/14/05
0.0
1.0
0.0
1.0
FY2006 Science, State, & Rel. Agencies
Appropriations Acte
P.L. 109-108
11/22/05
0.0
0.1
0.0
0.1
FY2006 Interior & Rel. Ag. Approp.f
P.L. 109-54
8/2/05
0.0
0.0
0.2
0.2
FY2006 Military Quality of Life &
Veterans Affairsf
P.L. 109-114
11/30/05
0.0
0.0
0.5
0.5
FY2006 Emergency Supplemental
P.L. 109-234
6/14/06
66.0
3.2
0.0
69.3
FY2007 DODO Appropriations Act,
Baseline and Title IXc
P.L. 109-289
9/29/06
70.5
0.0
0.0
70.5
FY2007 Continuing Resolution
P.L. 110-5
2/15/07
0.0
2.1
0.6
2.7
FY2007 Supplemental
110-28
5/25/07
95.2
3.7
0.4
99.3
Subtotal
557.4
41.0
1.6
600.1
Unidentified Transfersh
unknown
unknown
2.0
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
567.8
41.0
1.6
610.5
CRS-42
Source: CRS calculations based on public laws and DOD documents.
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. FY2003 Appropriations Act included $7.1 billion in regular FY2003 defense appropriations for GWOT that DOD
cannot track; the FY2004 DOD Appropriations Act rescinded $3.5 billion in FY2003 war monies.
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 do not include a $1.8 billion scoring adjustment that reverses the previous
rescission of FY2004 funds because this did not change wartime monies.
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. From DOD documents, it appears that DOD transferred about
$2.0 billion from its baseline funds to prepare for the Iraq invasion during the summer and fall of 2002 but the
source of those funds is not identified.