Order Code RL33110
The Cost of Iraq, Afghanistan, and Other Global
War on Terror Operations Since 9/11
Updated February 8, 2008
Amy Belasco
Specialist in U.S. Defense Policy and Budget
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 FY2008 Consolidated Appropriations Act (H.R.
2764/P.L. 110-161 on December 26, 2007, Congress has approved a total of about
$700 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).
This $700 billion total covers all war-related appropriations from FY2001 in
supplementals, regular appropriations, and continuing resolutions including not quite
half of the FY2008 request. Of that total, CRS estimates that Iraq will receive about
$526 billion (75%), OEF about $140 billion (20%), and enhanced base security about
$28 billion (4%), with about $5 billion that CRS cannot allocate (1%). About 94%
of the funds are for DOD, 6% for foreign aid programs and embassy operations, and
less than 1% for medical care for veterans. In FY2007, DOD’s monthly obligations
for contracts and pay averaged about $12.3 billion including about $10.3 billion for
Iraq and $2.0 billion for Afghanistan.
The Administration requested $195.5 billion for war-related activities for DOD,
State/USAID and Department of Veterans’ Affairs (VA) Medical for FY2008.
Congress has provided $90.9 billion for war-related activities as of the FY2008
Consolidated Appropriations, enacted on December 26, 2007. The remaining $105.2
billion of the Administration’s FY2008 war request is pending.
On February 4, 2008, the Administration submitted a “placeholder” war request
for FY2009 of $70 billion. Details of the new request are not expected until April
2008 when General David Petraeus is slated to make his recommendations about
future troop levels. With the pending FY2008 and FY2009 requests, the total for
enacted or requested war funding is about $875 billion.
Although Congress provided only part of its FY2008 war request, DOD
estimates that the Army has sufficient funds in regular and emergency funds to
finance war costs until early July 2008 and for another one to two months if it uses
currently available authorities. Congress has not indicated when it will take up the
remaining FY2008 emergency request, including $101.3 billion for DOD war-needs
and $3.4 billion for foreign aid and diplomatic operations. DOD anticipates that the
FY2009 bridge request of $70 billion would last until the beginning of a new
Administration.
In October 2007, the Congressional Budget Office projected that additional war
costs for the next 10 years could range from $570 billion if troop levels fell to 30,000
by 2010, or $1.1 trillion if troop levels fell to 75,000 by about 2013. Under these
scenarios, CBO projects that funding for Iraq, Afghanistan and the GWOT could
reach from about $1.2 trillion to about $1.7 trillion for FY2001-FY2017. This report
will be updated as warranted.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Status of FY2008 and FY2009 War Requests . . . . . . . . . . . . . . . . . . . . . . . . 1
FY2008 Wartime Funding Available . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Time line for Next FY2008 Supplemental . . . . . . . . . . . . . . . . . . . . . . . 4
Potential War Cost Issues for the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . . 4
War Cost Estimates Through FY2008 Request . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Funding for Each Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Funding for Each Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trends in War Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Estimates for Iraq and Afghanistan and Other Operations . . . . . . . . . . . . . 12
CBO Projections of Future Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Past Trends and Future Costs in Iraq . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Past Trends and Future Costs in Operation Enduring Freedom . . . . . . 15
Past Trends and Future Costs in Enhanced Security . . . . . . . . . . . . . . 15
DOD Spending Thus Far . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Changes in Average Monthly Obligations . . . . . . . . . . . . . . . . . . . . . . 17
Total Obligations to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Potential War Cost Issues for the 110th Congress . . . . . . . . . . . . . . . . . . . . . . . . 18
How long Can the Army Operate Without Additional Supplemental
Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Time line for the FY2008 Supplemental . . . . . . . . . . . . . . . . . . . . . . . 20
Tools to Extend How Long the Army Can Last . . . . . . . . . . . . . . . . . 21
Cost Implications of Troop Withdrawals and Basing Decisions . . . . . . . . 28
Reset and Reconstitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
DOD Changes Definition of War Costs . . . . . . . . . . . . . . . . . . . . . . . . 29
Procurement Requests in the FY2007 Emergency Supplemental . . . . 30
Front Loading Reset Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Carryover of DOD War Investment Funding . . . . . . . . . . . . . . . . . . . . 32
Accuracy and Expansion of Reconstitution Requests . . . . . . . . . . . . . 32
Modularity as an Emergency Expense . . . . . . . . . . . . . . . . . . . . . . . . . 33
Growing the Force as a War Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Questions About War-Related Procurement Issues . . . . . . . . . . . . . . . 35
Potential Readiness Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Readiness of Afghan and Iraqi Security Forces . . . . . . . . . . . . . . . . . . 38
Congressional Options to Affect Military Operations . . . . . . . . . . . . . . . . . 39
Problems in War Cost Estimates and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . 41
Difficulties in Explaining DOD’s War Costs . . . . . . . . . . . . . . . . . . . . . . . 42
Changes in Troop Strength . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Reliance on Reservists Falls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Changes in Military Personnel Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Changes in Operating Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Changes in Investment Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Special Funds and the Flexibility Issue . . . . . . . . . . . . . . . . . . . . . . . . 49

Average Cost Per Deployed Troop and Future Costs . . . . . . . . . . . . . . . . . 51
Estimates of Future Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
List of Figures
Figure 1. Active-Duty and Reserve Shares of OIF/OEF Average Annual
Troop Levels, FY2003-Early FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

List of Tables
Table 1. Estimated War-Related Funding by Operation: FY2001-FY2008 . . . . . 8
Table 2. Estimated War-Related Funding by Agency: FY2001- FY2008 . . . . . . . 9
Table 3. Budget Authority for Iraq, Afghanistan, and Other Global War on
Terror (GWOT) Operations: FY2001-FY2008 . . . . . . . . . . . . . . . . . . . . . . 11
Table 4. DOD’s Obligations by Operation: FY2001-FY2007 . . . . . . . . . . . . . . . 17
Table 5. Ways To Extend How Long Army Can Operate Without
FY2008 Supplemental Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 6. Afghan and Iraq Security Forces Funding: FY2004-FY2008 . . . . . . . . 39
Table 7. Average Troop Strength for Iraq, Afghanistan and other
Counter-Terror Operations and Enhanced Security in the
United States, FY2001-FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table 8. DOD’s War Budget Authority by Title: FY2004-FY2007
Enacted Supplemental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Table 9. Average Annual Cost Per Deployed Troop: FY2003-FY2006 . . . . . . . 51
Table A1. Defense Department, Foreign Operations Funding, and VA
Medical Funding for Iraq, Afghanistan and Other Global War
on Terror ActivitiesFY2001-FY2008 DOD Appropriations . . . . . . . . . . . . 53


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 seventh 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. Information on costs is useful to Congress to assess Department of Defense
(DOD) war costs in FY2008, conduct oversight of past war costs, and consider future
alternatives for Iraq ranging from maintaining pre-surge levels after June 2008 to a
withdrawal at some future date.
For updates of action on the FY2008 Supplemental, see CRS Report RL339999,
Defense: FY2008 Authorization and Appropriations, by Pat Towell, Stephen Daggett
and Amy Belasco. For final action on the FY2007 Supplemental, see CRS Report
RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and
Other Purposes
, by Stephen Daggett et. al.
Status of FY2008 and FY2009 War Requests
Congress has appropriated $90.9 billion of the Administration’s $195.5 billion
request for FY2008 war costs for the Defense Department, State/U.S. Agency for
International Development (USAID) and the Veterans’ Administration including
both regular and emergency funds in three legislative acts (the first FY2008
Continuing Resolution, H.J.Res. 52/P.L. 110-92, the FY2008 DOD Appropriations
Act, H.R. 3222/P.L. 110-116, and the FY2008 Consolidated Appropriations Act,
H.R. 2764/P.L. 110-161). That brings total funds appropriated to date to $700 billion
for the wars in Iraq, Afghanistan and enhanced security.

CRS-2
For FY2009, the Administration has included a $70 billion placeholder request
for DOD without providing any details, as well as some war-related funding in the
regular FY2009 State/USAID budget. Despite a congressional requirement for
detailed budget justification for war funds, DOD does not plan to submit details on
its new request until after General David Petraeus, head of Multi-National Forces,
Iraq, makes his recommendations about troop levels in March or April 2008.1 DOD
anticipates that the $70 billion bridge fund for FY2009 would “certainly cover” the
period until the beginning of a new Administration in late January 2009.2
Taking into account the additional pending war requests for FY2008 and
FY2009, enacted and requested war funding totals about $875 billion for DOD,
State/USAID and VA Medical.
With enactment of the FY2008 Consolidated Appropriations Act (H.R.
2764/P.L. 110-116) on December 26, 2007, which includes $70 billion for
emergency war funding, pressure for passage of the remaining FY2008 supplemental
request is likely to shift to the spring of FY2008 when Congress may consider the
pending emergency war request for DOD, State/USAID of $105.2 billion.3
FY2008 Wartime Funding Available. Before passage of the FY2008
Consolidated Appropriations, DOD financed F2008 war costs by tapping its regular
appropriations, a practice used in previous years called “cash-flowing,” and
controversy grew about how long the Army could last without passage of a
supplemental (see below).4 Now DOD also has $86.8 billion available in FY2008
including $70 billion in the FY2008 Consolidated Appropriations Act as well as
$16.8 billion provided in early bills specifically for the Mine Resistant Ambush
Program (MRAP) vehicles, an armored truck with a V-shaped hull which is
1 See Sec. 1008, P.L. 109-364, FY2007 National Defense Authorization Act; American
Forces Press Service, “Gates: Multiple Inputs to Drive Post-July Drawdown Decisions,”
January 31, 2008.
2 DOD, “New Briefing with Press Secretary Morrell from the Pentagon,” January 29, 2008,
p. 5.
3 The original House version of the FY2008 Consolidated Appropriations (H.R. 2764) only
provided funds for Afghanistan, and would have allowed DOD to fund war activities until
about late February 2008; see Division L, “Emergency Supplemental Appropriations for
Operation Enduring Freedom and for Other Purposes,” FY2008 Omnibus, H.R. 2764, as
amended; [http://www.rules.house.gov/110/text/omni/amnd2/110_hr2764amnd2.pdf].
Using other available tools — such as transfer authority, excess cash, delaying placing depot
maintenance orders, and slowing regular obligations would have enabled the Army to last
until about early May 2008. CRS’s total for the pending FY2008 request is about $1 billion
lower than the $102.5 billion for the FY2008 supplemental because it excludes from war
funding about $1 billion of the Administration’s request for an higher fuel prices for DOD’s
regular baseline program and a request for funds to refurbish Walter Reed.
4 DOD first used funds provided in the first FY2008 Continuing Resolution (Sec. 106, H.
J. Res 52/P.L. 110-92), which gave DOD access to the $70 billion in bridge funds for war
included in last year’s appropriations Act (Title IX, FY2007 DOD Appropriations, P.L. 109-
289), and then in the FY2008 DOD Appropriations Act.

CRS-3
considered more effective against attacks from Improvised Explosive Devices
(IEDs).
DOD can also continue to tap its baseline appropriations once emergency funds
run out. Unless Congress passes specific language restricting the use of these funds,
the President can spend baseline monies for either war or peacetime activities; so, for
example, DOD can pay for fixing a truck in either Iraq or Kansas, and finance war
operating and support costs in the initial months of the fiscal year by temporarily
tapping regular appropriations that are slated to be used at the end of the fiscal year.
With a couple of exceptions, Congress has not appropriated monies specifically
for wartime activities or specifically for Iraq and Afghanistan.5 This practice of
mixing war and baseline appropriations in the same accounts increases flexibility for
both the Administration and Congress but reduces visibility on war costs because war
and baseline funds are co-mingled in the same accounts.
Passage of the $70 billion in war funds in the FY2008 Consolidated
Appropriations Act (H.R. 2764/P.L. 110-161) averted a growing controversy in the
fall and winter of FY2007 about the potential effects of delays in war funding. DOD
argued that funds for the Army funding — the service facing the greatest pressure
from its war costs — would run out by mid-February 2008 unless Congress provided
additional funding.6 CRS estimates suggested that without the funding, DOD could
continue financing war costs until about the end of March 2008 using currently
available authorities.7
Based on this concern, DOD announced that the Secretary of Defense had
directed the Army and Marine Corps to initiate planning to “reduce operations at all
Army bases by mid-February and all Marine installations by mid-March 2008,” and
to “begin notifying roughly 200,000 civilians and contractors that we can no longer
afford their services and that absent additional funding, they will be furloughed, or
temporarily laid off, within a matter of weeks...just before Christmas;” Deputy
Secretary of Defense Gordon England notified the defense committees.8
5 The exceptions are separate accounts to fund the training of Iraq and Afghan security
forces, and the Iraq Freedom Fund transfer account as well as the Iraq Relief and
Reconstruction set up by Congress.
6 On November 20, 2007, DOD spokesman Geoff Morrell stated that the Army — the
service facing the greatest pressure from its war costs — could finance war costs until about
mid-February 2008 using its current appropriations and if Congress approved a DOD request
to transfer $4.1 billion to the Army. DOD stated that the Marine Corps had sufficient funds
through mid-March 2008.
7 See CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other Global War on
Terror Operations Since 9/11
by Amy Belasco, December 12, 2007 update, p. 4-5.
8 News Briefing, Transcript, “Defense Department Holds Regular News Briefing, November
20, 2007. [http://www.defenselink.mil/transcripts/transcript.aspx?transcriptid=4091]. See
Vice Chair, Army, General Richard A. Cody, “Contingency Budget Planning,” November
26, 2007 for instructions. Notification requirement is in 10 U.S.C. 1597 (e) and is cited in
Deputy Secretary of Defense Gordon England, “Letter to Senator Carl Levin, Chair, Senate
(continued...)

CRS-4
According to press accounts, DOD planned to send notices out in mid-January
2008.9 Based on regulations implementing the National Security Personnel System,
it is not clear that notifications would have been needed in December 2007 for the
short emergency furloughs of less than 30 days that DOD was planning.10
Time line for Next FY2008 Supplemental. How long the Army could
maintain operations with currently available funding is likely to re-surface as an issue
in the spring of 2008 when DOD begins to urge Congress to pass the remaining
FY2008 supplemental request. Concern focuses on the Army, the service facing the
largest war costs.
According to DOD, the Army could finance its Operations & Maintenance
(O&M) costs until the beginning of July 2008 and its Military Personnel costs until
about late June using funds appropriated to date.11 While these time lines reflect the
amounts of funding provided to the Army as of the FY2008 Consolidated
Appropriations Act, DOD’s estimates do not reflect ways that DOD can extend
funding using other available tools and authorities including transfer authority.
CRS estimates that DOD could continue to finance war costs for an additional
one to two months by using currently available tools such as transfer authority to
provide additional resources to the Army if Congress has not passed the pending
FY2008 Supplemental request by July 2008. See section below entitled “How Long
Can the Army Last Without A Supplemental” for a more extensive discussion.
Potential War Cost Issues for the 110th Congress
This report is designed to answer the frequently asked questions below as well
as to address some of the major war cost issues likely to be faced in the 110th
Congress. Potential issues include:
! How much has Congress appropriated in total and 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
8 (...continued)
Armed Services Committee,” December 7, 2007.
9 Washington Post, Federal Diary, “Pentagon Prepares for Layoffs in Budget Standoff,”
December 12, 2007.
10 For non-emergency furloughs of less than 30 days, DOD civilians must receive a
minimum of 15 days advance notification unless the action is due to “unforeseen
circumstances,” including “sudden emergencies requiring immediate curtailment of
activities;” see Code of Federal Regulations, Sec. 9901.609. CRS analysts Jon
Shimabukuro, Thomas Nicola, and Barbara Schwemle provided assistance with this issue.
See 5 Code of Federal Regulations, Sec. 9901.714.
11 DOD, “Briefing to Congressional staffers,” January 2008.

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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?
! How long the Army can last before passage of the FY2008
supplemental;
! What are potential future spending levels under various scenarios
ranging from an increase in troop levels to a withdrawal of forces
including the cost implications if DOD were to withdraw more
troops beyond the five combat brigades that were sent in last
spring’s “surge,” including the effect of any basing agreements
under consideration; and how do basing decisions affect future
costs?
! How large are reconstitution and reset costs for repair and
replacement of war-worn equipment and what is appropriately
considered to be emergency war-related procurement as opposed to
DOD’s ongoing modernization efforts;
! How to judge and respond to readiness problems that stem from war
operations;
! How to use congressional funding mechanisms to affect policy
options for Iraq; and
! What are the problems in war cost reporting.
This report begins by providing CRS estimates of the amount appropriated for each
of the three missions to date, average obligations per month, and other measures of
costs, and some discussion of budgetary war issues for DOD, State/AID and VA
Medical.
War Cost Estimates Through FY2008 Request
CRS has estimated the allocation of all DOD budget authority (BA) by the three
operations — Iraq, Afghanistan, and enhanced security — because DOD has not
done so. Although DOD has reported the total amount appropriated for the Global
War on Terror (GWOT), DOD does not allocate all of these funds.
There also continue to be discrepancies between CRS, DOD, and CBO
estimates of the total amount of war funding enacted, which appear to reflect
different interpretations of which funding is war-related. As of passage of the
FY2008 Consolidated, CRS estimates that Congress has provided a total of $655
billion compared to $645 billion for CBO and $636 billion for DOD. CBO and CRS
totals may be larger because they include funds not counted as GWOT-related and

CRS-6
CRS’s total also includes funds for enhanced security that are now included in
DOD’s regular baseline program.12
CRS calculations of total war appropriations are probably larger than DOD
because CRS includes all funds appropriated to DOD for the Global War on Terror
including some funds included in regular requests, because DOD may not include
transfers from regular appropriations and because DOD excludes some Congressional
additions to supplementals as non-war related.
DOD also estimates the pending FY2008 war request at $102.5 billion. CRS
considers that $101.3 billion of that total is war related (excluding non-war costs in
DOD’s request for baseline fuel and repairs of Walter Reed).13
Instead of allocating all budget authority enacted or requested, DOD reports
annual and cumulative obligations incurred for each operation, which reflects funds
as personnel are paid, contracts are signed, or orders placed.14 This does not include
funds appropriated or requested which have not yet been obligated.
As of November 2007, DOD reported that $516 billion has been obligated for
the Global War on Terror (GWOT) including
! $396.6 billion for Iraq; and
! $91.6 billion for Operation Enduring Freedom; and
! $27.8 billion for Operation Noble Eagle (enhanced security).15
DOD’s obligations reporting system, however, does not cover about $124
billion for funds still to be obligated this fiscal year, about $45 billion from previous
years that remains to be obligated primarily to upgrade or replace war-worn
equipment, and $35 billion in intelligence funding managed outside of DOD, as well
12 For DOD total, see DOD, FY2008 Global War on Terror Amendment, October 2007,
Figure 1, p.1, October 2007; for CBO total, see CBO, The Budget and Economic Outlook,
Fiscal Years 2008 to 2018, Box 1-1, p. 6-7, January 2008; for CRS total, see Table A-1 in
this report. 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 lower than
CRS partly because of fewer transfers considered to be war-related; see CBO, Letter to
Senator Conrad, “Estimated Funding for Operations in Iraq and the Global War on Terror,”
February 7; [http://www.cbo.gov/ftpdocs/77xx/doc7793/02-07-CostOfWar.pdf].
13 DOD’s total FY2008 request is $189.3 billion; CRS excludes from DOD’s request for
$742 million for higher fuel prices in its baseline program and $416million to accelerate the
closure of Walter Reed and replacement by new hospital facilities; see DOD, FY2008
Global War on Terror Amendment
, February 2007, p. 53. For example, DOD excludes
Congressional adds for C-17 aircraft in FY2007 as non-war related.
14 Compiled by the Defense Finance Accounting Service (DFAS) monthly, these reports are
entitled “Supplemental and Cost of War Execution Reports.” September 2007 cumulative
figures from DOD, “Cost of War through September 2007,” November 2007.
15 DOD, “Cost of War Car Through November 2007,” January 2008.

CRS-7
as other funds that DOD does not consider to be war-related or appears not to have
tracked.16
In the FY2007 Supplemental and FY2008 GWOT war requests, DOD now
provides estimated breakdowns by operation for most of the budget authority
requested before funds are obligated.17 For example, DOD estimates that the annual
cost for Iraq would reach $124.6 billion in FY2007 and $149.7 billion in FY2008 if
its requests are approved.18 Presumably, DOD could also allocate all funds that have
already been appropriated based on obligations to date and estimates of unobligated
funds just as it has estimated the breakdown of its new requests.
In this report, CRS estimates the allocation of all funds appropriated to DOD for
war costs rather than only those obligated thus far, relying primarily on DOD’s
reporting of obligations. Such estimates give Congress a better sense of the current
status of funding available for each operation, and allow comparisons between fiscal
years. CRS uses previous spending trends as a guide to estimate the allocation of
funds still to be spent or unreported. CRS has also compiled the funds allocated to
Iraq and Afghanistan for foreign and diplomatic operations and for VA medical costs
for OIF/OEF veterans (see Tables 1, 2, and 3). CRS has not allocated funding
requested in FY2009 because no details about its make-up are available.
Funding for Each Operation. According to CRS estimates, Congress has
appropriated about $700 billion in budget authority (BA) from FY2001 through the
FY2008 Bridge fund in the FY2008 Consolidated Appropriations Act for DOD, the
State Department and for medical costs paid by the Department of Veterans’ Affairs
(P.L. 110-161). CRS estimates that this total includes about
! $526 billion for Iraq (75%),
! $140 billion for Afghanistan and other counter terrorism operations
(20%),
16 CRS calculations based on tracking of war costs.
17 In its FY2007 and FY2008 war requests, DOD does not allocate $6 billion to $9 billion
for intelligence, fuel for its baseline program, and other programs to either OIF or OEF;
CRS allocates most of these amounts since they are requested as war funds; see Table 1a..
in DOD, FY2007 Emergency Supplemental Request for the Global war on Terror, February
2 0 0 7 ; [ h t t p : / / w w w . d o d . m i l / c o m p t r o l l e r / d e f b u d g e t / f y 2 0 0 8
/fy2007_supplemental/FY2007_Emergency_Supplemental_Request_for_the_GWOT.p]df;
hereinafter, FY2007 Supplemental, and in DOD, FY2008 Global War on Terror Request,
February 2007, p. 74; [http://www.dod.mil/comptroller/defbudget/fy2008
/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf] hereinafter, DOD,
FY2008 GWOT Request; DOD, MRAP amendment, July 31, 2007;
[http://www.defenselink.mil/comptroller/defbudget/fy2008/fy2007_amendment/FY2008
_Gl obal _War _On_T er r or _Request / F Y _ 2 0 0 7 _ M R A P _ B u d ge t _ A me n dment -
_DoD_portion.pdf]; hereinafter, DOD, MRAP Amendment; and DOD, FY2008 Global War
on Terror Amendment
, October 2007; hereinafter, DOD, October Amendment;
[http://www.defenselink.mil/comptroller/defbudget/fy2008/Supplemental/FY2008_Octo
ber_Global_War_On_Terror_Amendment.pdf].
18 DOD, FY2008 Global War on Terror Amendment, Table 1a. p. 56, October 2007.

CRS-8
! $29 billion for enhanced security (5%), and
! $5 billion that CRS cannot allocate (see Table 1).
Table 1. Estimated War-Related Funding by Operation:
FY2001-FY2008
(CRS estimates in billions of dollars of budget authority)
Enacted:
FY01-
Cum.:
FY01
FY08
Pending
FY01-
Operation &
&
Consol.
FY08
FY08
Total
FY02 FY03a FY04b FY05b FY06 FY07 FY08c Approps.c Req.cd
Req.d
Iraq
0.0
53.0
75.9
85.5 102.0
133.6
76.4
525.9
82.3
608.3
OEF
20.8
14.7
14.5
20.0
19.0
36.9
14.0
139.8
22.8
162.7
Enhanced
13.0
8.0
3.7
2.1
0.8
.5
.5
28.7
0
28.7
Security
Unallocated
0.0
5.5
0.0
0.0
0.0
0
0
5.5
0
5.5
TOTAL
33.8
81.1
94.1 107.6 121.8
171.0
90.9
699.9
105.2
805.1
Annual
NA 140%
16%
14% 14%
41%
NA
NA
14%
NA
Change
Change Since
NA
NA
16%
33% 50%
111%
NA
NA
141%
NA
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
September 2007 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 theGWOT.pdf]; and
DOD, FY2008 Global War on Terror Request, Feb. 2007; [http://www.dod.mil/comptroller
/defbudget/fy2008/fy2007_supplemental/FY2008_Global_War_On_Terror_Request.pdf]; DOD,
FY2008 Global War on Terror Amendment, October 2007; [http://www.defenselink.mil
/comptroller/defbudget/fy2008/Supplemental/FY2008_October_Global_War_On_Terror
_Amendment.pdf]; appropriations reports, public laws and DOD transfers. For a further breakdown
of agency spending by operation, see Table 4.
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.
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 $16.8 billion appropriated for Mine Resistant Ambush Protected (MRAP) vehicles
requested by DOD for war needs in FY2008 provided in the first FY2008 Continuing
Resolution (H.J.Res 52/P.L. 110-92) and the FY2008 DOD Appropriations (H.R. 3222/P.L.
110-116), and $70 billion in Division L, FY2008 Consolidated Appropriations Act (P.L. 110-
161); pending FY2008 request excludes these funds. VA Medical estimates reflect VA FY2008
budget materials, and CRS estimate of 4.5% of Congressional add of $3.6 billion for VA
Medical Services in Division I, FY2008 Consolidated Appropriations Act, based on OIF/OEF
patients as a share of total VA patients. Amounts for foreign and diplomatic operations reflect
State Department reported figures through FY2007 and preliminary estimate for FY2008 based
on Joint Explanatory Statement for Division J, FY2008 Consolidated Appropriations Act in
Congressional Record, Dec. 18, 2007 and appropriations committee tables; figures may be
adjusted later by the State Department.
d. In the FY2008 request, CRS excludes DOD’s request to cover higher fuel prices in its regular
programs, and a request to accelerate the replacement of Walter Reed; CRS also includes an
estimate for enhanced security ($530 million) based on FY2007 and funded in DOD’s baseline
in FY2007 in order for totals to be consistent with previous years.

CRS-9
Funding for Each Agency. Of the $700 billion enacted thus far, about $655
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 (see Table 2).
Table 2. Estimated War-Related Funding by Agency:
FY2001- FY2008
(CRS estimates in billions of dollars of budget authority)
Total
Enacted
Thru
Cum.:
FY01
FY08
Pending
FY01-
By Agency
&
Consol.
FY08
FY08
& Total
FY02 FY03 FY04 FY05 FY06
FY07 FY08a Appropsa
Req.b
Requestb
DOD
33.0
77.4
72.4
102.6 117.2
165.0
87.9
655.0
101.3
756.3
State/USAID
0.8
3.7
21.7
4.8
4.3
5.0
2.1
42.4
3.4
46.3
VA
0.0
0.0
0.0
0.2
0.4
1.0
.9
2.5
0
2.3
TOTAL
33.8
81.1
94.1
107.6 121.8
171.0
90.9
699.9
105.2
805.1
Notes and Sources: Public laws, congressional appropriations reports, and CRS estimates;
see Table 4.
a. For FY2008, includes $16.8 billion for MRAP vehicles appropriated in first FY2008 Continuing
Resolution (H.J.Res. 52/P.L. 110-92) and the FY2008 DOD Appropriations Act (H.R.
3222/P.L. 110-116), and $70 billion in Division L of the FY2008 Consolidated Appropriations
Act (H.R. 2764/P.L. 110-161).
b. Includes both regular and emergency requests. Excludes DOD’s FY2008 request for funds to cover
higher fuel costs in its regular program and acceleration of the replacement of Walter Reed.
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.
As of the FY2008 Consolidated, which includes some but not all of their
emergency request, State and USAID have together have received about $42.4 billion
for reconstruction, embassy operations and construction, and various foreign aid
programs for Iraq and Afghanistan with an additional pending war-related request
of $3.4 billion. The Veterans Administration has received about $2.5 billion for
medical care for veterans of these operations, above its request.19
For information about State Department and USAID programs, see CRS Report
RL34023, State, Foreign Operations, and Related Programs: FY2008
Appropriations by Connie Veillette and Susan Epstein; CRS Report RL31833, Iraq:
19 Foreign operations activities are managed by both the State Department and USAID,
which handles most U.S. development assistance programs.

CRS-10
Reconstruction Assistance, by Curt Tarnoff; and CRS Report RL30588, Afghanistan:
Post War Governance and U.S. Policy
, by Kenneth Katzman; CRS Report RL34276,
FY2008 Emergency Supplemental Appropriations for International Affairs by Connie
Veillette, Susan Epstein, Rhoda Margesson, and Curt Tarnoff.
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 3). Based on passage of the FY2007
Supplemental, annual DOD funding are growing by an additional 75% between
FY2004 and FY2007. If DOD’s total FY2008 request is enacted, the level in FY2008
would be 160% higher or more than one-and-one-half times larger than FY2004.
Table 3 provides a 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. Such investment funding has grown steeply in
recent years (see Table 5). 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.20 Emergency funding is exempt from
ceilings applying to discretionary spending in Congress’s annual budget resolutions.21
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.22
20 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.
21 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.
22 The exception is FY2004 when Congress appropriated $20 billion for reconstruction in
the supplemental.

CRS-11
Table 3. Budget Authority for Iraq, Afghanistan, and Other
Global War on Terror (GWOT) Operations:
FY2001-FY2008

(CRS estimates in billions of budget authority)
Cum.
FY
Enacted
Cum:
By Operation
01 &
thru FY08 Pending FY01-
and Funding
FY
FY
FY
FY
FY
FY
FY
Consol.Ap
FY
FY08
Source
02a
03
04
05
06
07
08b
props
08 Req.a
Req.
OPERATION IRAQI FREEDOM (OIF)c
Department of
0 50.0
56.4
83.4
98.5 129.6
74.7
492.0
79.6
571.6
Defense
Foreign Aid
and Diplomatic
0
3.0
19.5
2.0
3.2
3.2
0.9
31.7
2.5
34.2
Opsd
VA medicale
0
0
0
0.2
0.4
0.9
0.7
2.2
0.0
2.2
Total: Iraq
0.0 53.0
75.9
85.5 102.0 133.6
76.4
525.9
82.3
608.3
OPERATION ENDURING FREEDOM (OEF)/Afghanistan and GWOT
Department of
20.0 14.0
12.4
17.2
17.9
34.9
12.6
128.9
21.7
150.6
Defense
Foreign Aid
and Diplomatic
0.8
0.7
2.2
2.8
1.1
1.9
1.1
10.6
0.9
11.5
Opsd
VA Medicale
0
0
0
0
0.0
0.1
0.2
0.3
0.0
0.3
Total: OEF
20.8 14.7
14.5
20.0
19.0
36.9
14.0
139.8
22.8
162.7
ENHANCED SECURITY (Operation Noble Eagle)
Department of
13.0
8.0
3.7
2.1
0.8
0.5
0.5
28.7
0.0
28.7
Defense
Total: Enhanced
Securityf

13.0
8.0
3.7
2.1
0.8
0.5
0.5
28.7
0.0
28.7
DOD
0.0
5.5
0.0
0.0
0.0
0.0
0.0
5.5
0.0
5.5
Unallocated
ALL MISSIONS

Department of
33.0 77.4
72.4 102.6 117.2 165.0
87.9
655.0
101.3
756.3
Defense
Foreign Aid
and Diplomatic
0.8
3.7
21.7
4.8
4.3
5.0
2.1
42.4
3.4
45.7
Operationsd
VA Medicale
0
0
0
0.2
0.4
1.0
0.9
2.5
0.0
2.5
Total: All
33.8 81.1
94.1 107.6 121.8 171.0
90.9
699.9
105.2
805.1
Missions
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 and other budget justification materials including
D O D , F Y 2 0 0 7 S u p p , F e b r u a r y 2 0 0 7 , T a b l e 1 a . ; [ h t t p : / / www. d o d . mi l /
comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_Emergency_Supplemental_Request
_for_the_GWOT.pdf]; DOD, FY2008 Supplemental Requests, February , July, and October 2007.
CRS budget authority (BA) totals are higher than DOD figures 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

CRS-12
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.
a. CRS combined funds for FY2001 and FY2002 because most were obligated in FY2002 after the
9/11 attacks at the end of FY2001. For FY2008, CRS excludes as non-war related DOD request
for funds to cover higher fuel prices for its regular program and to accelerate the replacement
of Walter Reed.
b. Includes funds provided in the First Continuing Resolution (H.J.Res 52/P.L. 110-92), FY2008 DOD
Appropriations Act (H.R. 3222/P.L. 110-116) and the FY2008 Consolidated Appropriations Act
(H.R. 2764/P.L. 110-161).
c. DOD’s new estimate in FY2007 for Iraq shows BA from FY2003 as $48 billion, $2 billion higher
than reported by DFAS without identifying a source for these funds.
d. Foreign operations figures include monies for reconstruction, development and humanitarian aid,
embassy operations, counter narcotics, initial training of the Afghan and Iraqi army, foreign
military sales credits, and Economic Support Funds. For FY2007, figures reflect State
Department figures; for FY2008, figures reflect Joint Explanatory Statement for Division J,
FY2008 Consolidated Appropriations Act (P.L. 110-161) in December 17, 2007 Congressional
Record; may be revised by State Department at a later date.
e. Medical estimates reflect figures in VA’s FY2008 budget justifications, and CRS estimate of
OIF/OEF shares of $3.6 billion added by Congress to VA Medical in FY2008 Consolidated
Appropriations Act (P.L. 110-161).
f. 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 FY2008 supplemental request (see Table 4). With
passage of the FY2008 Consolidated Appropriations Act (H.R.2764/P.L 110-161),
CRS estimates that war-related appropriations enacted to date total about $700 billion
allocated as follows
! $526 billion for Iraq (or 74%);
! $140 billion for Afghanistan (or 20%);
! $29 billion for enhanced security (5%); and
! $5 billion unallocated (1%) (see Table 4).
For FY2008, this also includes $16.8 billion for MRAP vehicles provided to DOD
in the FY2008 Continuing Resolution (H.J. Res 2/P.L. 110-92) and the FY2008 DOD
Appropriations bill (H.R. 3222/P.L. 110-116).
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

CRS-13
equipment, substantial upgrades of equipment, converting units to modular
configurations, and new funding to train and equip Iraqi security forces — these
elements do not appear to be enough to explain the size of and continuation of
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. The FY2009
budget includes a $70 billion placeholder figure for war costs with no details, making
it impossible to estimate its allocation. The Administration includes no funds in later
years.
CBO Projections 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 2008 - 2017.
CBO projects that over the next ten years war costs for DOD, State, and VA could
total
! $570 billion if troop levels fell to 30,000 by 2010; or
! $1,055 billion if troop levels fell to 75,000 by 2013.23
This CBO estimate does not split funding for Iraq and Afghanistan. If these CBO
estimates are added to funding already appropriated, CBO projects that the cost of
both Iraq, Afghanistan, and enhanced security could reach from $1.2 trillion to $1.7
trillion by 2017 if troops fell to 30,000 or 75,000 respectively.24
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.25
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 2004.26
23 Table 1 CBO, Statement of Peter Orszag, Director, before House Budget Committee,
“Estimated Cost of U.S. Operations in Iraq and Afghanistan and Other Activities Related
to the War on Terrorism,” October 24, 2007; [http://www.cbo.gov/ftpdocs/86xx/doc8690
/10-24-CostOfWar_Testimony.pdf].
24 Ibid, p.1.
25 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.
26 Sec. 9012 required that the president submit an estimate for FY2006-FY2011 unless he
(continued...)

CRS-14
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 invasion year of 2003 to about $135 billion for FY2007.
Projections of Future Iraq Costs. The total for Iraq in FY2007 is about
one-third higher than the previous year and almost three times the first year (see and
Table 4).27 The amended FY2008 DOD war request includes $158 billion for Iraq,
about $25 billion more than in FY2007 reflecting primarily higher procurement
funding. DOD has adopted an expansive definition of reset — funds to restore units
to pre-war condition — that includes not only the repair and replacement of
equipment damaged in war or that is not worth fixing but also to upgrade equipment
to meet future needs.28
A Gradual Withdrawal Option. 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 could cost an additional $147 billion while
a reduction to 40,000 troops by 2010 could cost an additional $318 billion.29 CBO
has not estimated the cost of a more immediate withdrawal.
Maintaining a Long-Term Presence. CBO has also estimated that the
annual cost of maintaining about 55,000 troops in Iraq over the long-term — referred
to as the Korea option — in Iraq would be about $10 billion in a non-combat scenario
and $25 billion with combat operations.30 CBO’s projections of costs assumes only
minimal procurement costs for replacing or upgrading war-worn equipment unlike
DOD’s recent and current war requests.
26 (...continued)
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.
27 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.
28 See CRS, Testimony of Amy Belasco to House Budget Committee, “the Growing Cost
of the Iraq War,” October 24, 2007.
29 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.
30 CBO, Letter to Congressman Spratt on Long-Term Presence in Iraq, 9-20-07
[http://www.cbo.gov/ftpdocs/86xx/doc8641/09-20-ConradLTpresenceinIraq.pdf].

CRS-15
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. Although funding requested for FY2008 matches the FY2007
level, more funding is included for operations and less for training Afghan security
forces.31
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.32 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 and $500 million
in FY2007, a level CRS projects for FY2008 as well (See Table 4). 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.
DOD Spending Thus Far
Average monthly obligations are frequently used as a way to measure the rate
of ongoing war spending. As of November 2007, DOD estimated that the cumulative
total of war-related obligations as of November 2007 is $516 billion. DOD cites
31 DOD, FY2008 Global War on Terror Amendment, Table 2, Funding by Functional
Category, October 2007, p. 57; training of Afghan Security Forces falls from $7.4 billion
in FY2007 to $2.7 billion in FY2008.
32 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-16
average monthly obligations of about $11.9 billion including $9.2 billion for Iraq,
$2.6 billion for Afghanistan, and $45 million for enhanced security. This two-month
average is somewhat lower than the average for all of FY2007 (see Table 5 below).
Although these figures capture DOD’s contractual obligations for pay, goods,
and services, they do not give a complete picture because they do not capture all
appropriated funds or all funds obligated. DOD acknowledges that these figures do
not capture over $35 billion in classified activities. According to DOD, other funds
which DOD does not consider to be war-related — such as for Congressional adds
for equipment for the National Guard and Reserve, force protection, and more C-17
aircraft — also will not be captured in Defense Finance Accounting Service (DFAS)
reports because the services will treat these as part of DOD’s regular programs.33
CRS uses the average of all of FY2007 rather than the most recent figures
because obligations typically go up and down from month-to-month. Table 4 below
shows DOD-reported figures and CRS estimates of average monthly obligations after
adjusting DOD accounting reports to add classified and other unreported war-related
activities through the end of FY2007.34 These estimates show adjusted FY2007
obligations running $12.3 billion per month on average including:
! $10.3 billion for Iraq;
! $2.0 billion for Afghanistan; and
! $45 million for enhanced security.
Average obligations are a good indicator of ongoing operational costs because these
funds must be obligated — put in contract — within the first year. For investment
costs, however, 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.
Obligations figures 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 co-mingled 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.
33 Communication with DOD Comptroller staff, October 2007 and Table 1a in DOD,
FY2008 Global War on Terror Amendment, October 2007, for total for non-DOD
intelligence and non-GWOT; [http://www.defenselink.mil/comptroller/defbudget
/fy2008/Supplemental/FY2008_October_Global_War_On_Terror_Amendment.pdf].
34 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-17
Table 4. DOD’s Obligations by Operation: FY2001-FY2007
(in billions of dollars)
Average monthly obligation as of
DOD
September 2007
Reported
FY07
Cum. Obs
Mission and type of
DFAS
FY07
from FY01-
spending
FY03a
FY04a
FY05a FY06a
Rpted
adj.
Nov. 2007
Operation Iraqi Freedom
Operationsb
4.2
4.3
4.7
5.9
7.0
7.1
NA
Investmentc
0.2
0.6
1.8
1.3
3.0
3.2
NA
Total
4.4
4.8
6.5
7.2
9.9
10.3
396.6
Afghanistan and the Global War on Terrord
Operationsb
1.1
0.9
0.9
1.2
1.6
1.9
NA
Investmentc
0.2
0.1
0.2
0.2
0.0
0.1
NA
Total
1.3
1.0
1.1
1.4
1.7
2.0
91.6
Enhanced security and othere
Operationsb
0.5
0.3
0.2
0.1
0.0
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
0.0
0.0
27.8
All missions
Operationsb
5.8
5.5
5.8
7.2
8.6
9.1
NA
Investmentc
0.4
0.7
2.0
1.5
3.1
3.2
NA
Total
6.2
6.2
7.7
8.7
11.6
12.3
516.0
Notes and Sources: NA = Not available. Numbers may not add due to rounding. Monthly estimates
reflect Defense Finance Accounting Service (DFAS) reported obligations through September 2007;
see DOD, Supplemental & Cost of War Execution Reports; cumulative obligations from DOD, “Cost
of War Through November 2007,” January 2008.
a. Figures for FY2003-FY2006 reflect CRS calculations based on DFAS reports with estimated
adjustments for funds excluded by DFAS such as intelligence and Congressional additions.
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 in FY2004
to $12.3 billion in FY2007, a doubling in four years for both Iraq and Afghanistan.
More Procurement Increases Iraq Spending. In the case of Iraq, much
of the increase reflects a five-fold increase in investment obligations — primarily
procurement — as the services have begun to spend substantial amounts on reset —
the procurement of new weapons systems and equipment not simply to replace not
only war losses (a small share of the total) but more often to upgrade and replace
“stressed” equipment and enhance force protection.

CRS-18
Some observers have questioned whether all of DOD’s war-related procurement
reflects the stresses of war. For example, a recent CBO study found that more than
40% of the Army’s spending for reset — the repair and replacement of war-worn
equipment — was not for replacing lost equipment or repairing equipment sent
home. Instead, Army funds were spent to upgrade systems to increase capability, to
buy equipment to eliminate longstanding shortfalls in inventory, to convert new units
to a modular configuration, and to replace equipment stored overseas for
contingencies.35
Operating Costs Rise in Afghanistan. In the case of Afghanistan,
spending rates are growing for operations for reasons that are not clear though troop
levels have increased somewhat this year.
As of September 2007, obligations are running about $12 billion a month with
Iraq at $10.3 billion and Afghanistan at $2.0 billion.36 The monthly average for
enhanced security (Operation Noble Eagle) has fallen substantially from $520 million
per month in FY2003 to $45 million in FY2007 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 $516 billion in DFAS-
reported obligations since FY2003:
! $396.6 billion or 77% is for Iraq;
! $91.6 billion or 18% is for Afghanistan and other GWOT; and
! $27.8 billion or 6% is for enhanced security (see Table 5).
This does not include obligations for intelligence or other expenses that are included
in CRS estimates but not captured by DOD’s DFAS reports.
Potential War Cost Issues for the 110th Congress
The following sections discuss several war cost issues that may arise during
consideration of DOD’s pending FY2008 Supplemental War Request of some $101
billion including:
! How long the Army can operate before passage of the FY2008
supplemental;
! What are the cost implications if DOD were to withdraw more
troops beyond the five combat brigades that were sent in last
spring’s “surge,” including the effect of any basing agreements
under consideration;
35 CBO, Replacing and Repairing Equipment Used In Iraq and Afghanistan: The Army’s
Reset Program
by Frances M. Lussier, September 2007, p. ix, pp. 35-37;
[http://www.cbo.gov/showdoc.cfm?index=8629&sequcence=0&from=7].
36 CRS estimates would be somewhat higher.

CRS-19
! What is the likely current and future cost of reset — the repair and
replacement of war-worn equipment — and how does this compare
to DOD’s requests, and are these requests emergency war expenses
or are some more appropriately part of DOD’s regular budget?
! How to judge and respond to readiness problems that stem from war
operations;
! How to use congressional funding mechanisms to affect policy
options for Iraq; and
! What are the problems in war cost reporting.
How long Can the Army Operate Without Additional
Supplemental Funds

This issue of how long the Army (and sometimes the Marine Corps) can operate
before passage of supplemental war funds has become controversial in the past
several years. Most recently, Congress faced considerable pressure from DOD to pass
the FY2008 war request, where DOD argued that a shutdown of Army bases and
furlough of Army civilians would be necessary if Congress did not pass the
supplemental by December 2007.
With the inclusion of a $70 billion bridge fund to cover war costs in the FY2008
DOD Appropriations Act, pressure has temporarily subsided. In the press conference
on the FY2009 budget, however, Secretary of Defense Gates urged that Congress
pass the remaining $102.5 billion of DOD’s war funding request “as quickly as
possible,” arguing that “delay degrades out ability to operate and sustain the force
at home and in theater and makes it difficult to manage this department in a way that
is fiscally sound.”37
Pressure on Congress is likely to re-surface in the spring of 2008 when funds
from the FY2008 bridge fund in the FY2008 Consolidated Appropriations Act begin
to run low. According to DOD, the Army could finance its Operations &
Maintenance (O&M) costs until the beginning of July 2008 and its Military
Personnel costs until about late June using funds appropriated to date.38 While these
time-lines reflect the amounts of funding provided to the Army as of the FY2008
Consolidated Appropriations Act, DOD’s estimates do not reflect ways that DOD can
extend funding using other available tools and authorities such as transfer authority.
Based on an analysis of past obligations, current funding and DOD authorities,
CRS estimates that DOD could continue to finance war costs for an additional one
to two months by using currently available tools such as transfer authority to provide
37 DOD, News Briefing with Secretary Gates, Under Secretary Jonas, and Vice Adm.
Stanley from the Pentagon,” February 4, 2008;[http://www.defenselink.mil/transcripts
/transcript.aspx?transcriptid=4135], p. 1.
38 DOD, “Briefing to Congressional staffers,” January 2008.

CRS-20
additional resources to the Army if Congress has not passed the pending FY2008
Supplemental request by July 2008.
Similar arguments about the disruption and harmfulness of delays in providing
war funds have been made in previous years. DOD contended that if Congress did
not pass the FY2007 supplemental in the spring of 2007, the Army would run out of
funds for its wartime and peacetime operations, and face serious readiness problems
and disruption in Army operations. To cope with the delay, the Army adopted a series
of restrictions to slow non-war-related activities to conserve funding that would not
affect readiness, projecting that $3.6 billion could temporarily be saved and used to
fund war needs.
Since FY2005, Congress has provided DOD with bridge funds to cover the gap
in funding of war costs before passage of a supplemental, providing $25 billion in
FY2005 (P.L. 108-287), $50 billion in FY2006 (P.L. 109-148), $70 billion in
FY2007 (P.L. 109-289), and $86 billion in FY2008 (see Table A1).39 With these
bridge funds, the debate has shifted to the spring of each year as those funds run low.
In the case of both the FY2007 and FY2008 supplementals, DOD appears to
have taken advantage of some but not all the tools at its disposal to extend these time
lines and provide additional funding to the Army. Based on DOD data, CRS and the
Army estimated that the Army had sufficient funds to last through June 2007 before
passage of the FY2007 Supplemental.40 The supplemental was enacted on May 25,
2007.41 In the case of the FY2008 war request, DOD argued in November 2007 that
passage was needed by December 2007 to avoid furloughs of civilian personnel in
February 2008. At that time, CRS estimated that the Army could last until late
March by using available transfer authority, excess cash and delaying placing depot
orders. In December 2007, Congress included $70 billion for war funds in the
FY2008 Consolidated Appropriations Act (H.R. 2764/P.L. 110-161). With those
funds, DOD estimates that the Army can last until early July 2008.
Time line for the FY2008 Supplemental. CRS checked DOD estimates
that the Army could operate until early July 2008 with the $70 billion bridge fund in
the FY2008 Consolidated Appropriations Act by analyzing Army obligations in
FY2007 taking into account DOD’s current plans to withdraw this spring the five
additional combat brigades sent to Iraq and Afghanistan in last year’s “surge.”
Although CRS estimates also suggest that the Army’s current funding will be
exhausted by until early July 2008, DOD could extend that time line by one to two
39 Army Budget Office, “OMA FY07 Spending Projections,” February 5, 2007. The
FY2006 Supplemental was enacted in mid-June 2006, while the Army claimed that the
supplemental needed to be enacted by the end of April 2007 to avoid disruptions to Army
operation and maintenance activities, including childcare centers.
40 For additional information about the FY2007 Supplemental, see CRS Report RL33900,
FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other
Purposes
, by Stephen Daggett et. al. Department of Defense Press Release, “President
Bush’s FY2008 Defense Submission,” February 5, 2007.
41 Army Briefing, April 2007. See the section titled, “Financing Army Operations Until
Passage of the Supplemental,” in CRS Report RL33900, for more details.

CRS-21
months — or until mid-to-late August 2008 if necessary by using available authority
to transfer additional funds to the Army (see Table 5).
With the current bridge fund, the Army has $62.5 billion available in regular and
emergency appropriations to cover its total costs — both wartime and regular — for
Army Operations and Maintenance. Although Army obligations for Operation and
Maintenance (O&M) dipped and spiked from month to month in FY2007, CRS
estimates that is likely that monthly obligations will be lower in the first quarter of
FY2008 ($5.9 billion actual) as the Army benefits from high obligations or supply
orders placed at the end of FY2007, and in the third quarter ($6.2 billion) as the
additional troops sent to Iraq last spring are withdrawn. Conversely, obligations are
likely to be higher in the quarter of FY2008 ($7.0 billion) as the Army re-orders and
at the end of the year as the Army places its orders to repair equipment returning
home with the planned withdrawal of the five brigades sent last year ($6.5 billion).42
In the case of military personnel, the Army has some $32.3 billion to fund its
regular and wartime military personnel costs, which DOD estimates will last until
about late June 2008. Again, while it appears that currently available funding could
run out by that time — taking into account the 15% decrease in average strength once
the five additional brigades are withdrawn during the first six months of 2008 — the
DOD estimate does not reflect the use of available tools to extend this time line.
Tools to Extend How Long the Army Can Last. Table 5 below outlines
tools that are currently available to DOD that could extend financing of Army
military personnel and Operations and Maintenance should passage of the FY2008
Supplemental be delayed and outlines precedents and potential consequences of
using these tools. Although these tools are routinely used by DOD to meet
unanticipated needs, tapping these authority for war needs would reduce DOD’s
flexibility to finance other unanticipated higher priority needs.
The most readily available tool for DOD to extend financing of war costs is to
transfer funds into Army military personnel and O&M accounts from other accounts.
In FY2008, DOD has available three sources of transfer authority that total $11.4
billion which permits DOD to respond to unanticipated higher priority needs by
moving funds between accounts. This total includes:
! $3.7 billion in general transfer authority where funds can be moved
! from DOD’s baseline program to war needs;
! $4.0 billion within the $70 billion in emergency supplemental
appropriations which could be moved between wartime needs, e.g.
from procurement to operations; and
! $3.7 billion provided in the Iraq Freedom Fund.
42 CRS’s cross-check of DOD estimates assumes total Operation and Maintenance, (O&M)
Army budget authority from both baseline and emergency funds of $62.5 billion with
monthly obligations for Army Operation and Maintenance by quarter as follows: $5.9 billion
in 1st quarter based on actuals; estimate of $7.0 billion in 2nd quarter, estimate of $6.2 billion
in 3rd quarter; and estimate of $6.5 billion in fourth quarter based on experience in FY2007
and plans to reverse the “surge.”


CRS-22
Table 5. Ways To Extend How Long Army Can Operate Without FY2008 Supplemental Appropriations
Option
Potential
Potential
Date Funding
Precedents/Notes
Potential Consequences
Additional
Number of
Might Run Out if
Funds/Reduction
Weeks or Days Options Are
in Obligation of
Financed at
Cumulative and
FY2008 Funding
Obligation
Fully
in billions of $
Rate Assumed
Implemented
by Army
Precedents/ Notes
CURRENTLY AVAILABLE TOOLS
Cash flow using FY2008 DOD
$27.4 billion for
38 to 40 weeks 3rd week of June
“Cash flowing” — i.e., moving Services have long complained
Appropriations
Army O&M and
for Military
funds from the end of the year
that “cash flowing” such large
$31.5 billion in
Personnel and
to the beginning has been
amounts is disruptive.
Army Military
early July for
common in recent years.
Personnel in
O&M
FY2008 DOD
Appropriations Act
earlier in the year
Use general transfer authority
$3.7 billion
2 weeks
Until mid-July
General Transfer Authority was Would exhaust $3.7 billion in
provided in FY2008 DOD
2008
used in FY2007 was later
General Transfer Authority which
Appropriations Act (Sec. 8005,
restored by Congress. Requires DOD would prefer to have
P.L. 110-116)
approval of congressional
available for other unanticipated
defense committees.
needs unless and until Congress
were to restore it.

CRS-23
Option
Potential
Potential
Date Funding
Precedents/Notes
Potential Consequences
Additional
Number of
Might Run Out if
Funds/Reduction
Weeks or Days Options Are
in Obligation of
Financed at
Cumulative and
FY2008 Funding
Obligation
Fully
in billions of $
Rate Assumed
Implemented
by Army
Precedents/ Notes
CURRENTLY AVAILABLE TOOLS
Use special DOD transfer
$4.0 billion
2 weeks
End of July 2008
Special Transfer Authority is
DOD would not be able to use this
authority in FY2008
intended and has been used to
authority for other unanticipated
Consolidated Appropriations
respond to unanticipated
war needs.
(Sec. 603, P.L. 110-161)
wartime needs, such as
purchase of uparmored
HMMWVs or MRAPs
Use funds provided in the Iraq
$3.7 billion
2 weeks
Middle of August
IFF funds can be transferred to
Would reduce DOD flexibility to
Freedom Fund (IFF) in the
2008
other accounts with 5 days
use these funds for other needs.
FY2008 Consolidated
advance notification to the
Appropriations (IFF account,
defense committees
P.L. 110-161)
Use all remaining excess cash
$2.1 billion as of
1 week
End of August
Cash balances are a common
Would probably require action
balances in working capital
the beginning of
2008
source of funding for O&M
before funds run out.
funds
the fiscal year
accounts; requires approval of
congressional defense
committees

CRS-24
Option
Potential
Potential
Date Funding
Precedents/Notes
Potential Consequences
Additional
Number of
Might Run Out if
Funds/Reduction
Weeks or Days Options Are
in Obligation of
Financed at
Cumulative and
FY2008 Funding
Obligation
Fully
in billions of $
Rate Assumed
Implemented
by Army
Precedents/ Notes
CURRENTLY AVAILABLE TOOLS
Slow obligations of baseline
$3.6 billion
2 weeks
1st week of
In April, DOD achieved
Proposed measures appeared likely
O&M funds as the Army did in
September 2008
savings from delaying contracts to become increasingly disruptive
FY2007
and other belt-tightening
to Army operations over time.
measures. Monthly obligations Effects uncertain.
often fluctuate.
Invoke Feed and Forage Act,
To be determined
4 weeks?
TBD
This emergency authority to
Requires contractors to accept
41 U.S.C. 11
(TBD)
contract without having
potential delays in payment for
appropriations in hand has been goods or services, which could
invoked 11 times since 1962
mean higher prices.
for as much as $7.4 billion.
Requires appropriations once
payment is due.

CRS-25
Option
Potential
Potential
Date Funding
Precedents/Notes
Potential Consequences
Additional
Number of
Might Run Out if
Funds/Reduction
Weeks or Days Options Are
in Obligation of
Financed at
Cumulative and
FY2008 Funding
Obligation
Fully
in billions of $
Rate Assumed
Implemented
by Army
Precedents/ Notes
CURRENTLY AVAILABLE TOOLS
Transfer responsibility for
Illustrative $5
3 to 6 weeks
TBD
Secretary of Defense has the
No precedents. Could be
LOGCAP, Other Base Support, billion to $10
authority to assign
analogous to lead roles of
Civilian Subsistence and
billion
responsibility for management
individual services in specific
Linguists from Army to another
and funding of war-related
missions; e.g. Air Force role in
services.
support to any service, and to
space-based intelligence; uncertain
transfer civilian personnel
whether there would be
managing those services.
implementation problems. Could
erode congressional controls on
use of funds unless Congress
endorses transfers.
Notes and Sources: CRS calculations based on Army, Justification of FY2008 GWOT Operation and Maintenance Request, October amendment, 2007; H. Report 110-434, Conference
report on FY2008 DOD Appropriations Act,
November 6, 2007; Department of Defense, Supplemental & Cost of War Execution Reports, monthly for FY2007; H.R. 2764, December
17, 2007; see Division L, “Emergency Supplemental Appropriations for Operation Enduring Freedom and for Other Purposes,” FY2008 Consolidated, H.R. 2764, as amended/P.L.
110-161; [http://www.rules.house.gov/110/text/omni/amnd2/110_hr2764amnd2.pdf].

CRS-26
Other available tools that DOD could use to extend funding, such as using excess
working capital fund cash (often done in the past), deferring placing depot
maintenance orders or slowing baseline operations, would need to be implemented
before funds run out to be effective (see Table 6).43
Slowing spending as the Army did last spring could temporarily save $3.6
billion but would have to be implemented soon. DOD has argued that slowdowns
or “belt-tightening,” achieved mostly by delaying contracts to upgrade facilities and
deferring orders of non-essential supplies by relying on current inventories at bases,
would not be worthwhile in light of the amount of time gained vs. the potential
disruption to Army operations.44 Last spring, while the slowdown was in effect, the
Army’s regular O&M obligations slowed considerably without evidence of harmful
effects, perhaps partly because obligations were higher in the early part of the year.
Deferring placing depot maintenance orders would not necessarily delay
equipment repairs because the Army’s has a 7½ months backlog of work awaiting
repairs at depots. A deferral all new FY2008 depot maintenance contracts for four
months would reduce the backlog to about three months, similar to backlogs in
previous years. In addition, the Army could use this hiatus to evaluate which orders
should be placed first in line to meet the needs of troops preparing to deploy. Both
GAO and CBO have criticized the Army for its lack of priority setting for repairing
items in depot maintenance that are needed by troops preparing to deploy.45
Another longstanding authority that has been used in emergency situations is to
invoke the Feed and Forage Act, an emergency authority that allows DOD to contract
for emergency operational needs without having the necessary appropriations.
Although DOD has mentioned this civil war era authority that permits the department
to sign contracts to provide support for troops even if appropriations are not
available, and it has been used periodically, the authority has been criticized for
43 Sec. 8008, P.L. 110-116 provides the authority to transfer excess working capital fund
cash to operations and maintenance accounts, a provision that has been included in DOD
appropriations for some years.
44 Army Memorandum, “Operation and Maintenance, Army Spending Restrictions Plan for
FY07,” April 13, 2007; [http://www.comw.org/warreport/fulltext/0704armyspending.pdf];
see also CRS Report RL33900, FY2007 Supplemental Appropriations for Defense, Foreign
Affairs, and Other Purposes
by Stephen Daggett, Army Belasco, Pat Towell, Susan B.
Epstein, Connie Veillette, Curt Tarnoff, Rhoda Margesson, and Bart Elias, “Financing Army
Operations Until Passage of the Supplemental,” p. 5.
45 GAO-07-814, Defense Logistics: Army and Marine Corps Cannot Be Assured That
Equipment Reset Strategies Will Sustain Equipment Availability While Meeting Ongoing
Operational Requirements
, September 2007; [http://www.gao.gov/new.items/d07814.pdf;
GAO-07-439T], Defense Logistics: Preliminary Observations on the Army’s
Implementation of Its Equipment Reset Strategies
, January 31, 2007;
[http://www.gao.gov/new.items/d07439t.pdf]; CBO, Replacing and Repairing Equipment
Used In Iraq and Afghanistan: The Army’s Reset Program
by Frances M. Lussier,
September 2007; [http://www.cbo.gov/showdoc.cfm?index=8629&sequcence=0&from=7].

CRS-27
eroding congressional authority, particularly the War Powers Act .46 If implemented
at the maximum level used in the past, it would finance one month of Army needs..
At the same time, DOD might have to convince contractors to accept delayed
payment, which could raise prices.47
New Tools. A new tool that would require some planning and early
implementation, for which there is not a precedent but where the authority is
currently available, would be to transfer funding and management responsibility for
certain war-related support functions from the Army — such as $6.2 billion in
wartime logistical support for all the services (LOGCAP), other base support ($3
billion), a $1.1 billion contract for linguists, and $675 million in subsistence costs for
DOD civilians and contractor personnel.48 — to the Air Force and Navy. This could
finance an additional month or two of Army operations and would reduce funding for
Air Force and Navy by about two months. Assessing whether such a change is
worth considering now and for future years could also depend on the likelihood that
providing war funds continues to be a contentious issue.
Under statute, the Secretary of Defense has the authority to transfer support
functions for deployed forces to any service. Title X, section 165 provides that “the
Secretary of Defense may assign the responsibility (or any part of the responsibility)
for the administration and support of forces assigned to the combatant commands to
other components of the Department of Defense...”49 The Secretary also has authority
to detail civilian personnel from one service to another as part of his general
responsibility for managing the department so Army personnel currently managing
these contracts could be detailed to another service to ensure continuity.50
If the Secretary were to transfer responsibility for these types of activities, the
Army could be relieved of $5 billion to $10 billion of funding responsibility for
wartime support activities. While this would extend the time the Army or Marine
Corps could operate without a supplemental, it would reduce the funding for Air
Force and Navy operations by about two months. War costs of the Air Force and
Navy are much smaller than those of the Army.51 Congress might be concerned by
this action because it could undermine congressional limitations on funds and the
integrity of the account structure.
46 Department of Defense News Briefing, Transcript, “Defense Department Holds Regular
News Briefing, November 20, 2007, p. 12; [http://www.defenselink.mil/transcripts
/transcript.aspx?transcriptid=4091].
47 For additional information, see CRS Report RL34275, How Long Can the Defense
Department Finance FY2008 Operations in Advance of Supplemental Appropriations?
By
Amy Belasco, Stephen Daggett, and Pat Towell.
48 Department of the Army, Fiscal Year (FY) 2008 Supplemental Budget Estimate,
Operation and Maintenance, Army, Justification Book — Amendment
, October 2007, p. 13
and p. 22; [http://www.asafm.army.mil/budget/fybm/fy08-09/sup/fy08/oma-v1.pdf].
49 Sec. 165, Title X.
50 See Title 5, Section 3341 and Title 10, Sec. 113 (d).
51 For example, Navy O&M war-related obligations totaled $6.5 billion in FY2007
compared to $33.1 billion for its FY2008 baseline O&M.

CRS-28
Cost Implications of Troop Withdrawals and
Basing Decisions

As of January 2008, it is unclear whether the Department of Defense will
continue troop withdrawals after the reversal of the “surge” of five combat brigades
that occurred last spring. Although Secretary of Defense Robert Gates has stated a
desire to continue withdrawals, General David Petraeus, head of Multi-National
Forces, Iraq has voiced caution and suggested that a “pause” in further troop
withdrawals might be advisable. A decision is likely this spring.52
The FY2008 war budget request is predicated on maintaining 15 combat
brigades in Iraq once the five additional brigades are withdrawn by June 2008.53 The
FY2007 Supplemental included about $4 billion to $5 billion to fund the increase
troops in Iraq by five combat brigades or about 30,000 personnel to establish security
in Baghdad and Anbar province as well as 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.54
There has been little discussion thus far of the cost implications of additional
troop withdrawals. How war funding could fall if additional troops are withdrawn
will depend on the pace of withdrawals and how many bases DOD maintains.
Moreover, the cost of the troops added in 2007is not necessarily a guide to the effect
on costs of further withdrawals because little if any additional infrastructure was
required for their support.55
At the same time, the increase in troops was only in effect for part of the year,
so costs would have to be pro rated. For example, average overall troop strength for
Iraq and Afghanistan was only 4% higher in FY2007 compared to FY2006 even
52 Washington Post, “Debate Grows on Pause in Troops Cuts,” February 2, 2008.
53 DOD’s October amendment to its FY2008 supplemental includes an additional $6.5
billion to continue the surge, with a return to pre-surge levels by May or June of 2008.
54 DOD reduced its initial estimate of the cost of the additional troops. The estimate also
included the cost of increasing naval presence as well. House Armed Services Committee,
transcript of hearing on “Fiscal 2008 Budget: Defense Department,” February 7, 2007, p.
45. DOD revised its request in March 2007 to include support troops after CBO estimated
that additional funds would be needed; see CBO, Cost Estimate for Troop Increase Proposed
by the president, 2-1-07 [http://www.cbo.gov/ftpdocs/77xx/doc7778/TroopIncrease.pdf].
DOD, FY2007 Supplemental, p. 83; [http://www.dod.mil/comptroller/defbudget
/fy2008/fy2007_supplemental/FY2007_Emergency_Supplement al _Request_
for_the_GWOT.pdf]
55 DOD disagreed with the CBO estimate of the cost of the additional troops for this reason;
CBO, Cost Estimate for Troop Increase Proposed by the president, 2-1-07 [http://www.cbo
.gov/ftpdocs/77xx/doc7778/TroopIncrease.pdf]. DOD, FY2007 Supplemental, p. 83;
[http://www.dod.mil/comptroller/defbudget/fy2008/fy2007_supplemental/FY2007_
Emergency_Supplemental_Request_for_the_GWOT.pdf]

CRS-29
though troop levels at the end of the year were 10% higher when the “surge” was
fully implemented compared to the beginning of the year.56
An important factor in estimating the effects of further troop withdrawals are the
Administration’s plans for basing in Iraq — whether DOD plans to consolidate or
disperse U.S. personnel if troop levels decline. Congress has included provisions in
both the National Defense Authorization Act and DOD appropriations acts for the
past two years that prohibit permanent basing in Iraq. The Administration is
currently discussing “the ‘size and shape’ of any long-term U.S. presence basing
arrangements with the Iraq government,” as part of ongoing negotiations of a
strategic framework agreement according to General Douglas Lute, Assistant to the
President for Iraq and Afghanistan but it is not clear whether permanent bases would
be included.57
Reset and Reconstitution
Another major unsettled war cost issue that may arise during consideration of
the FY2008 Supplemental this spring and the FY2009 bridge fund once it is
presented to Congress is the amount of funds needed to “reset” or restore the
services’ equipment to pre-war levels. In its FY2008, DOD requested $46 billion
for reconstitution, primarily procurement funds. In the FY2008 bridge, Congress
funded only a small portion of that request.58 The largest single reason for the
increase is war costs between FY2004 and FY2007 is the amount requested and
received by DOD for reset. Although repair and replacement costs might be expected
to grow over time as operations wear down equipment, it appears that much of the
growth reflects a broadening of the definition of what is required.59
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 largely 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
56 CRS calculations based on Defense Manpower Data Run, DRS 17253, Average Number
of Members by Month, 0901-1107
, received January 11, 2008.
57 See testimony by CRS analyst, Kenneth Katzman, before the Subcommittee on the Middle
East and South Asia, House Foreign Affairs Committee, January 23, 2008;
[http://foreignaffairs.house.gov/hearing_notice.asp?id=936].
58 Division L
59 CRs, Statement of Amy Belasco before the House Budget Committee, “ The Growing
Cost of the Iraq War, “ October 24, 2007; [http://budget.house.gov/hearings/2007
/10.24Belasco_testimony.pdf]

CRS-30
necessary to support a contingency operation.”60 (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.”61 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.62 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
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.
War-justified procurement requests have increased substantially in recent years from
$20.4 billion in FY2006 to $39.7 billion in FY2007 and $64.0 billion in FY2008.
Although some of this increase may reflect additional force protection and
replacement of “stressed” equipment, much may be in response to Mr. England’s new
guidance to fund requirements for the “longer war” rather than DOD’s traditional
definition of war costs as strictly related to immediate war needs.
60 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].
61 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.
62 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-31
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.63
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.64
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.65 The services are to repair equipment
if economical or replace it if replacement costs almost as much as repair.
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”66
63 Testimony of OMB Director Robert Portman before the House Budget Committee,
Hearing on the FY2008 DOD Budget, February 6, 2007, p. 41 of transcript.
64 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.
65 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.
66 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
(continued...)

CRS-32
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.67
DOD estimated that reconstitution would total $37.5 billion in FY2007 and $46
billion in FY2008, which was largely supported by Congress in FY2007.68 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. While
Congress endorsed most of the repair piece of reconstitution (funded in O&M) in the
$70 billion FY2008 bridge fund, only $6 billion of procurement monies related to
reconstitution was included.69
Carryover of DOD War Investment Funding. DOD’s latest procurement
request for reconstitution could be considered less urgent because DOD had a $45
billion carryover of war-justified investment funds — i.e., funds provided in previous
years’ acts but not yet obligated or placed on contract — as of the beginning of
FY2008.70 Because investment funding is available for two to three (RDT&E for two
years, procurement and military construction for three years), some of the funds may
be obligated beyond the first year as contracts are written and processed.
Most of these funds are procurement monies, suggesting that unobligated war-
related procurement funds still available to be spent are about half of the $81 billion
in procurement funds provided to DOD in FY2007 for its regular appropriations.71
Accuracy and Expansion of Reconstitution Requests. Although it is
clear that reset requirements reflect the stress on equipment from operations, the
accuracy of services estimates has not been determined. Recently, GAO testified that
until FY2007, the Army, with the largest reset requirement, could not track reset or
ensure that funds appropriated for reset were in fact spent for that purpose, making
66 (...continued)
Land Forces Hold, transcript, “Joint Hearing on Costs and Problems of Maintaining Military
Equipment in Iraq,” January 31, 2007, p. 6.
67 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.
68 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.
69 Congress also provided $16.8 billion to buy and support MRAPS, a force protection
request not related to reconstitution; see December 18, 2007 Congressional Record, p.
S15858 for procurement items funded in the FY2008 bridge included in Division L of the
FY2008 Consolidated Appropriations Act.
70 CRS, Statement of Amy Belasco before the House Budget Committee, “The Rising Cost
of the Iraq War,” October 24, 2007;
[http://budget.house.gov/hearings/2007/10.24Belasco_testimony.pdf].
71 CRS Report Rl33999, See Table 2 in Defense: FY2008 Authorization and Appropriations
by Pat Towell, Stephen Daggett, and Amy Belasco.

CRS-33
it more difficult to assess the accuracy of DOD’s requests.72 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.73 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
year if troops were withdrawn over a two-year period.74 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.75 In a report
last fall, CBO estimated that 40% of the Army’s war requests were not directly for
reset needs.76
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. In a report last year,
for example, the Army acknowledged that “since modularity requirements mirror the
72 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.
73 Office of the Secretary of Defense, Report to the Congress, “Long-Term Equipment
Repair Costs,” September 2006, p. 24 and p. 25.
74 Army Briefing, “Army Equipment Reset Update,” May 18, 2006, p. 8.
75 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.
76 CBO, Replacing and Repairing Equipment Used In Iraq and Afghanistan: The Army’s
Reset Program
by Frances M. Lussier, September 2007; [http://www.cbo.gov
/showdoc.cfm?index=8629&sequcence=0&from=7], p. ix.

CRS-34
equipment requirements the Army already procures for its units, the ability to
precisely track modularity funds is lost.”77
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. The FY2008 war request also includes $1.6 billion to accelerate the creation
of more modular brigades plus additional funds for equipping them.78
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.79 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.
Congress included the funds in the FY2005 and FY2006 with some reluctance
(effectively giving the Army more room in its regular budget for two years) based on
an understanding with DOD that this funding would return to the regular budget after
FY2006 and that $25 billion was set aside for the Army in future years to cover these
costs.80 Congress appears to have approved these costs in FY2007 as well.
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
77 Secretary of the Army, “Sec. 323 report required by the FY2007 National Defense
Authorization Act, P.L. 109-364,” February 14, 2007, p. 4.
78 DOD, FY2008 Global War on Terror Amendment, October 2007 [http://www.defenselink
.mil/comptroller/defbudget/fy2008/Supplemental/FY2008_October_Global_War_On_Te
rror_Amendment.pdf], p. 48 and 49.
79 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].
80 Program Budget Decision 753, “Other Secretary of Defense Decisions,” December 23,
2004, p. 1.

CRS-35
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.81
Questions About War-Related Procurement Issues. To evaluate
DOD’s war-related reconstitution and 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
! 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
81 CBO, Budget Options, February 2007, p.9-10; [http://www.cbo.gov/ftpdocs/
78xx/doc7821/02-23-BudgetOptions.pdf].

CRS-36
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
For some time, 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.82 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.83
Because DOD’s standard ratings (known as C-ratings) assess readiness relative
to the full range of standard wartime scenarios, however, they do not necessarily
reflect whether units are ready to deploy to Iraq and Afghanistan to conduct
counterinsurgency operations. For example when asked about his readiness concerns
during a hearing of the House Armed Services Committee, General Schoomaker,
Chief of Staff of the Army stated that “I have no concerns about how we are
equipping, training and manning the forces that are going across the berm into harm’s
way. But I do have continued concerns about the strategic depth of the Army and its
readiness,” referring to other potential missions of the Army [italics added].84
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.”85 Unit commanders are to judge whether the unit has:
82 Washingtonpost.com, “General Pace: Military Capability Eroding,” February 27, 2007.
83 U.S. House of Representatives, Committee on Appropriations — Democratic Staff,
“United States Army Military Readiness,” September 13, 2006, pp. 2-4.
84 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.
85 Joint Chiefs of Staff, “Chairman of the Joint Chiefs of Staff Manual 3150.02A”, p. J-4.

CRS-37
! 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).86
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.87
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.88
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.89
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
86 Ibid.
87 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.
88 See Tables 1, 3, and 5 in CRS Report RL32965, Recruiting and Retention: An Overview
of FY2005 and FY2006 Results for Active and Reserve Component Enlisted Personnel
, by
Lawrence Kapp and Charles A. Henning.
89 Defense Manpower Data Center, “Contingency Tracking System Deployment File for
Operations Enduring Freedom & Iraqi Freedom,” As of December 31, 2006.

CRS-38
traditionally given less equipment and fewer personnel.90 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 $33
billion for these purposes, including $20.75 billion for Iraq and at least $12.3 billion
for Afghanistan (see Table 6).91
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 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 FY2006.92
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
90 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.

91 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.
92 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.

CRS-39
missions (see Section 1313 (e) (2)).93 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 6. Afghan and Iraq Security Forces Funding:
FY2004-FY2008
(in billions of dollars)
Pending
FY08
Total
FY08
Account
FY04
FY05
FY06
FY07
Enacteda
Enactedb
Req.
Afghan Security
Forces Funda
[.348]a
1.285
1.908
7.406
1.350
12.300
1.350
Iraq Security Forces
Funda
[5.000]a
5.700
3.007
5.542
1.500
20.750
1.500
TOTALa
[5.339]
6.985
4.915
12.948
2.850
33.050
2.850
Notes and Sources:
a. Enacted as of FY2008 Consolidated (H.R. 2764/P.L. 110-161).
b. Figures in [ ] brackets are funds to train Iraqi security forces that were appropriated to the President
and transferred to the Coalition Provisional Authority, and implemented by the Army. 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.
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
Supplemental Appropriations for Defense, Foreign Affairs, and Other Purposes
, by
Stephen Daggett et al.)
93 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.

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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.94
Although President Nixon did not re-introduce U.S. troops, the United States
continued to bomb Cambodia for the next three years. Later in 1973, Congress passed
two provisions that prohibited the obligation or expenditures of “any funds in this or
any previous law on or after August 15, 1973” for combat “in or over or from off the
94 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-41
shores of North Vietnam, South Vietnam, Laos or Cambodia.”95 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.”96
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.97
Problems in War Cost Estimates and Reporting
GAO, CBO and CRS have all testified to Congress about the limited
transparency in DOD’ war cost estimating and reporting.98 While DOD has provided
considerably more justification material for its war cost requests beginning with the
FY2007 Supplemental, many questions remain difficult to answer — such as the
effect of changes in troop levels on costs — and there continue to be unexplained
discrepancies in DOD’s war cost reports.
How might Congress get better, accurate information on war costs? To provide
Congress a better basis for oversight, DOD could:
95 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.
96 See H.R. 17123, H.R. 6531, and H.R. 15628 in Table 1 and Appendix of CRS Report
RL33803.
97 CRS Report RS20775, Congressional Use of Funding Cutoffs Since 1970 Involving U.S.
Military Forces and Overseas Deployments
, by Richard F. Grimmett.
98 See testimony to House Budget Committee, October 24, 2007, July 31, 2007, and
testimony to Subcommittee on National Security, Emerging Threats and International
Affairs, House Government Reform, July 18, 2006.

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! provide estimates of the allocations of all budget authority provided
for OIF and OEF, and compare those to outlays to date;
! 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.99 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.
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
99 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-43
! 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.
Little of the $93 billion DOD increase between FY2004 and FY2007 appears
to reflect changes in the number of deployed personnel, which has grown by only
15% (see Table 3). Rather the increase is attributable to several factors:
! certain unanticipated requirements for force protection gear and
equipment;
! the cost of training and equipping Afghan and Iraqi security forcesx;
and
! even more, a broadened definition of th types of programs that DOD
considers part of war reconstitution or reset — funds to repair and
replace war-worn equipment.100
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,
2006.101 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 297,000 for
operations in Iraq, Afghanistan and other counter-terror operations or almost twice
as high as “boots on the ground” figures (see Table 7). 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.102 The reported average for the year was
303,000 (see Table 7).
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
100 See CRS, Statement of Amy Belasco before the House Budget Committee, Hearing on
“ T h e R i s i n g C o s t o f t h e I r a q W a r , ” O c t o b e r 2 4 , 2 0 0 7 ;
[http://budget.house.gov/hearings/2007/10.24Belasco_testimony.pdf] Stat.
101 DOD, Information Paper, “Congressional Research Service Request for Boots on the
Ground (BOG) Statistics for Iraq and Afghanistan, January 1, 2007,” 1-2-07.
102 DOD, FY2007 Emergency Supp, p. 16. [http://dod.mil/comptroller/defbudget/
fy2008/fy2007_supplemental/FY2007_Emergency_Supplemental_Request_for_the_GWOT.pdf].

CRS-44
projected a total of about 319,000 troops, a 5% increase since FY2004. Costs would
more than double from $72 billion in FY2004 to $165 billion for FY2007 (see Table
2
). Reported troop strength for FY2007 was 303,000 (see Table 7).
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 216,000 to 247,000 or by about 14% whereas funding levels increased by 60%
(see Table 7). DOD’s “surge” or “plus-up” for FY2007 of about 30,000 troops
increased average troop strength by only 10,000 or about 4% over FY2006 (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 brought troop strength for FY2007 to about
256,000 or about 19% 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.
Table 7. Average Troop Strength for Iraq, Afghanistan and other
Counter-Terror Operations and Enhanced Security
in the United States, FY2001-FY2007
(in thousands)
By Service
FY01
FY02
FY03
FY04
FY05
FY06
FY2007
Average Deployed
51
77
220
216
245
247
256
Army
8
17
110
143
156
156
156
Navy
29
30
42
25
29
32
40
Marine Corps
0
4
32
25
35
32
32
Air Force
14
26
35
24
25
27
27
Activated Reserves
State-sidea

NAb
51
92
87
66
50
46
All OIF/OEF/ONE
Military Personnel

50
129
312
304
312
297
303
Source: CRS calculations from Defense Manpower Data Center, DRS17253 Report, Average Number
of Members By Month, 0901-1107, January 2008.
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. Numbers may not add due to rounding.
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.
Military personnel funding has hovered between $16 billion and $20 billion a
year (see Table 8). About half of the $16 billion for war-related military personnel

CRS-45
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.103
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.
Table 8. 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
103 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.”

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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.
Notes: 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.
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.
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.104
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.
104 GAO, FY2004 Costs for Global War on Terrorism Will Exceed Supplemental, July 2004
[http://www.gao.gov/new.items/d04915.pdf].

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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.105 This policy change is
likely to make reservists available for two tours if necessary.
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 8). 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.106 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.
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.
105 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.
106 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and
September 2006, “DoD Totals.”

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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 8). 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.107
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.108 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 8).109
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
107 DFAS, Supplemental and Cost of War Execution Reports, September 2005 and
September 2006, “DoD Totals.”
108 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].
109 DOD received $80.9 billion for procurement in FY2006; see H.Rept. 109-676, p. 135.

CRS-49
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 8 shows the funding provided in these flexible accounts including

CRS-50
! 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.”110 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.111
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.112 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 8) 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
110 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).
111 H.Rept. 107-593, p. 17 and 128.
112 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-51
! 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.
Average Cost Per Deployed Troop and 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 9).
Table 9. Average Annual Cost Per Deployed Troop:
FY2003-FY2006
Change
Average Troop Strength &
Since
Obligations
FY03
FY04
FY05
FY06
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.

CRS-52
Since FY2003, the estimated average cost per deployed troop has risen from
about $320,000 to $390,000 per deployed troop.113 While that increase reflects
primarily more spending for procurement — for replacement and upgrading of
equipment — operational costs have also grown (see Table 8).
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;
! $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 FY2017.114
CBO did not estimate a more rapid withdrawal of troops.
113 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.
114 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].

CRS-53
Appendix
Table A1. Defense Department, Foreign Operations Funding,
and VA Medical Funding for Iraq, Afghanistan and Other Global
War on Terror Activities
FY2001-FY2008 DOD Appropriations
(in billions of dollars of budget authority)a
Foreign
Public Law
Date
DOD
Aid
VA
Total
Name of law
No.
Enacted Funds Embassy Medical
cost
FY2001 Emerg. Supp. Approp. Act
for Recovery from and Response to
P.L. 107-38
9/18/01
13.6
0.3
0.0
13.9
Terrorist Attacks on the United
States
FY2002 Dept. Of Defense and
P.L. 107-117
1/10/02
3.4
0.0
0.0
3.4
Emergency Terrorism Response Act
FY2002 Emergency Supplemental
P.L. 107-206
8/2/02
13.8
0.4
0.0
14.1
FY2002 Regular Foreign
P.L. 107-115
1/10-02
0.0
0.2
0.0
0.2
Operations
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
3.4
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
P.L. 108-199
1/23/04
0.0
0.5
0.0
0.5
Approps.
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 Appropsd
P.L. 109-13
5/11/05
75.9
3.1
0.0
79.0
FY2005 Consolidated
P.L. 108-447
12/8/04
0.0
1.0
0.0
1.0
Appropriations
FY2005 DOD Appropriations Acte
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 Acte
P.L. 109-148 12/30/05
0.8
0.0
0.0
0.8
FY2006 Foreign Operations
P.L. 109-102 11/14/05
0.0
1.0
0.0
1.0
Approps.
FY2006 Science, State, & Rel.
Agencies Appropriations Actd
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
0.4
0.4
FY2006 Emergency Supplemental
P.L. 109-234
6/14/06
66.0
3.2
0.0
69.2
FY2007 DOD Appropriations Act,
Baseline and Title IXc
P.L. 109-289
9/29/06
70.5
0.0
0.0
70.5
FY2007 Continuing Resolutiong
P.L. 110-5
2/15/07
0.0
1.3
0.6
1.8
FY2007 Supplemental
P.L. 110-28
5/25/07
94.5
3.8
0.4
98.7
FY2008 Continuing Resolution
P.L. 110-92
9/29/07
5.2
0.0
0.0
5.2
FY2008 DOD Appropriations Act
P.L. 110-116 11/13/07
12.7
0.0
0.0
0.0
FY2008 Consolidated
P.L.110-161 12/26/07
70.0
2.1
0.9
73.0
Appropriations Act

CRS-54
Subtotal
644.6
42.4
2.5
689.5
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 655.0
42.4
2.5 699.9
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. Excludes funds for Tsunami relief.
e. 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.
f. Includes VA medical funds for Iraq and Afghan veterans in emergency funding in Interior bill and
in regular VA appropriations.
g. State Department figures for foreign aid, reconstruction and embassy operations in FY2007 CR and
CRS estimates of likely amounts to be provided for Iraq and Afghanistan for 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.