Special Reports
Iraq war costs skyrocketing, but Congress unable to scrutinize spending
By Jason Leopold
Online Journal Contributing Writer


Apr 14, 2008, 00:18

Nearly all of the $516 billion allocated by Congress to fund the wars in Afghanistan and Iraq has come in the form of emergency spending requests, a method the White House has abused, depriving Congress of the ability to scrutinize how the Pentagon spends money in the so-called global war on terror.

The use of emergency supplemental bills to fund the wars has likely resulted in the waste of billions of taxpayer dollars, according to a recent report from the Congressional Research Service (CRS), the investigative arm of Congress.

Dozens of emergency funding requests that Congress has approved since 2001 are unprecedented compared with past military conflicts when war funding went through the normal appropriations process. As of March, CRS said average monthly costs to fund military operations in Iraq and Afghanistan have reached roughly $12.3 billion, $10 billion for Iraq alone, more than double what it cost to fund the war in 2004.

�Over 90 percent of [the Department of Defense] 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,� the report said. �Emergency funding is exempt from ceilings applying to discretionary spending in Congress�s annual budget resolutions. Some members have argued that continuing to fund ongoing operations in supplementals reduces congressional oversight.�

Vernonique de Rugy, a senior research fellow and budget scholar at the Mercatus Center at George Mason University, said funding the Iraq and Afghanistan wars through emergency legislation is troubling because the money �doesn't get counted in deficit projections, making it hard to track the real cost of the war and effectively removing any upper limits on spending for the war.�

�Even seven years after the start of the war in Afghanistan, and five years after the start of the war in Iraq, Congress and the president are still using 'emergency' funding bills to cover costs, rather than going through the regular appropriations process,� said de Rugy, who just published an article on the issue, �The Trillion-Dollar War,� in the May issue of Reason magazine. �While other wars have initially been funded using emergency supplementals, they have quickly been incorporated into the regular budget. Never before has emergency supplemental spending been used to fund an entire war and over the course of so many years.�

Most troubling about this trend, the CRS said in a report issued in February, is that while the Pentagon�s budget requests have steadily increased annually, the reasons the Defense Department has cited to explain its skyrocketing costs �do not appear to be enough to explain the size of and continuation of increases.�

�Although some of the factors behind the rapid increase in DOD funding are known -- the growing intensity of operations, additional force protection gear and equipment, substantial upgrades of equipment, converting units to modular configurations, and new funding to train and equip Iraqi security forces -- these elements� fail to justify the increase, the CRS report stated, adding that �little of the $93 billion DOD increase between [fiscal year] 2004 and [fiscal year] 2007 appears to reflect changes in the number of deployed personnel.�

Furthermore, a $70 billion �placeholder� request included in the fiscal year 2009 budget that the Pentagon says will be used to finance operations in Iraq does not include any details on how the money will be spent �making it impossible to estimate its allocation,� according to the report.

The CRS added the Pentagon has used emergency supplemental requests to get Congress to fund equipment and vehicle upgrades that would otherwise come out of the Pentagon�s annual budget. The Pentagon has succeeded largely due to a new way it now defines the war on terror.

�Although some of this increase may reflect additional force protection and replacement of 'stressed' equipment, much may be in response to [Deputy Secretary of Defense Gordon] 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,� the CRS report says, adding that Congress must immediately begin to demand a more transparent accounting of Pentagon emergency spending in order to put an end to the agency�s accounting chicanery.

�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,� the CRS report said.

Last Wednesday, in testimony before the House Armed Services Committee, Gen. Richard Cody, the Army�s vice chief of staff, said the military will soon run out of cash if lawmakers don�t act to approve a $102 billion emergency supplemental spending bill to continue funding military operations in Iraq and Afghanistan.

�We start running out of military pay for our force in June, we start running out of operational dollars that we can flow to the force in early July,� Cody said. �It�s all about time now. Those will be the consequences of not getting the supplemental.�

The CRS generally agrees with Cody, but said the Pentagon could dip into its budget and transfer funds to finance operations in Iraq until late September or early October, which would give Congress more time to scrutinize the emergency funding request.

Still, these dire warnings from Bush administration officials and military personnel about imminent funding shortfalls have become routine since Democrats won control of Congress in November 2006. Last year, Secretary of Defense Robert Gates threatened to fire more than 200,000 Defense Department employees and terminate contracts with defense contractors because congressional Democrats did not immediately approve a spending package to continue funding the Iraq war. The Government Accountability Office (GAO) and the Congressional Budget Office (CBO) advised Congress that Gates could tap into the Pentagon�s $471 billion budget to fund the war while Congress continued to debate the merits of giving the White House another �blank check� for Iraq.

Government auditors have said that these predictions are untrue and have been cited publicly by the White House to prod Congress into quickly passing legislation to appropriate funds. Republican lawmakers and administration officials have also said failure by Democrats to fund the war is tantamount to not supporting the troops. But the rhetoric has been enough to spook Democrats into passing the emergency funding requests, often without being aware of how the money is being spent.

Other federal agencies, including the Congressional Research Service (CRS) and the Congressional Budget Office (CBO), have testified to Congress about the limited transparency in DOD�s emergency budget requests.

�While DOD has provided considerably more justification material for its war cost requests beginning with the [fiscal year] 2007 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," the CRS report stated.

That led the GAO to draft a letter to Congress March 17, saying the $108 billion the Pentagon has recently requested is based on �unreliable� financial data and should be considered an �approximation,� which, technically, could be interpreted to mean the Pentagon�s accounting methods underestimated the cost of the war.

�Over the years, we have conducted a series of reviews examining funding and reported obligations for military operations in support of [the global war on terror]," the letter, addressed to congressional committees, says. �Our prior work has found the data in DOD�s monthly Supplemental and Cost of War Execution Report to be of questionable reliability. Consequently, we are unable to ensure that DOD�s reported obligations for [the global war on terror] are complete, reliable, and accurate, and they therefore should be considered approximations . . . GAO has assessed the reliability of DOD�s obligation data and found significant problems, such that these data may not accurately reflect the true dollar value of obligations [for the global war on terror.]�

A Pentagon spokesman did not return calls for comment. But a GAO spokeswoman said the DOD has been struggling with �deficiencies in the Pentagon�s financial management system� that contributed to the unreliable data. She would not elaborate.

Although studies have surfaced stating that the cost of the Iraq war could soar past $2 trillion, the Congressional Budget Office said trying to estimate future costs for the war is difficult �because DOD has provided little detailed information on costs incurred to date.�

�The administration has not provided any long-term estimates of costs despite a statutory reporting requirement that the president submit a cost estimate for [fiscal year] 2006-2011 that was enacted in 2004,� the CRS said.