Statement of
Robert A. Sunshine
Assistant Director for Budget Analysis

Estimated Costs of U.S. Operations in
Iraq and Afghanistan and of Other Activities
Related to the War on Terrorism

before the
Committee on the Budget
U.S. House of Representatives

July 31, 2007

Mr. Chairman, Congressman Ryan, and Members of the Committee, I appreciate the invitation to appear before you today to discuss the costs of U.S. operations in Iraq and Afghanistan and the government's activities related to the broader war on terrorism. My testimony will focus on appropriations and obligations to date, the potential costs of the recent increase in the number of troops in the Iraq theater, and the projected long-term costs of the war on terrorism under several different scenarios.

At the request of the Chairman of this Committee, the Congressional Budget Office (CBO) has tabulated the funding provided through July 2007 for military and diplomatic operations in Iraq and Afghanistan, and for other activities related to the war on terrorism, as well as for related costs incurred by the Department of Veterans Affairs (VA) for medical care, disability compensation, and survivors' benefits. CBO has also estimated the budgetary resources needed to finance the recent increase in the number of troops deployed to Iraq and has projected the total cost over the next 10 years of funding operations in support of the war on terrorism under scenarios specified by the Chairman.

Since September 2001, the Congress has appropriated $602 billion for military operations and other activities related to Iraq, Afghanistan, and the war on terrorism. In addition, although not explicitly appropriated for that purpose, an estimated $2 billion has been spent by the VA for war-related benefits. Specific appropriations, which averaged about $93 billion a year from 2003 through 2005, have risen to $120 billion in 2006 and $170 billion in 2007.

According to CBO's estimates, about $533 billion of the appropriated sums has been allocated for U.S. military operations and other activities carried out by the Department of Defense (DoD). The department's 2007 appropriation for those purposes—$165 billion—accounts for more than a quarter of its budget for the year. The Defense Department is currently obligating an average of almost $11 billion a month for expenses related to its operations in Iraq and Afghanistan and for other activities related to the war on terrorism. Most of that sum (more than $9 billion per month) is related to operations in Iraq.

Of the $602 billion in total appropriations, approximately $30 billion has been provided to establish, train, and equip indigenous security forces in Iraq and Afghanistan, and about $39 billion has been appropriated for reconstruction and relief efforts, diplomatic and consular operations, embassy construction, economic support, and foreign aid. Including both specific appropriations and other costs incurred by the VA, a total of almost $3 billion has been provided for medical care and other VA programs to assist former service members affected by their participation in operations related to the war on terrorism.

CBO projected the cost of the recent increase in the number of troops deployed to Iraq and also estimated the total amount of funding that would be required through 2017 to sustain U.S. forces in Iraq, Afghanistan, and other locations involved in the war on terrorism. Compared with DoD's previously announced plans for 2007, CBO estimates that an additional 30,000 to 40,000 personnel from the four military services have been deployed on the ground in the Iraq theater. Those additional troops will cost about $10 billion, $22 billion, or $40 billion, respectively, depending on whether that increase is sustained for four months, 12 months, or 24 months.

In addition, CBO projected the costs through 2017 of all activities associated with operations in Iraq, Afghanistan, and the war on terrorism on the basis of two scenarios provided by Chairman Spratt. Because the Defense Department does not report detailed operational statistics, these estimates are rough approximations based on current funding and force levels.

In the first scenario, the number of personnel deployed on the ground for the war on terrorism would be reduced from the 2007 average of about 210,000 to 30,000 by the beginning of 2010 and then remain at that level through 2017.⁽¹⁾ CBO estimates that the cost to the U.S. government under this scenario would range from $481 billion to $603 billion over the 2008–2017 period, depending on how long the current personnel level in Iraq is sustained (see Table 1).

In the second scenario, the number of personnel deployed to Iraq and other locations associated with the war on terrorism would decline more gradually, from an average of 210,000 in 2007 to 75,000 by the start of 2013 and then remain at that level through 2017. CBO estimates that total costs to the government under this scenario would range from $924 billion to $1,010 billion over the 2008–2017 period, again depending on how long the current personnel level in Iraq is sustained.

Since September 2001, lawmakers have provided $602 billion in budget authority specifically for military and diplomatic operations in Iraq, Afghanistan, and other regions in support of the war on terrorism, and for veterans' benefits and services (see Table 2). Of that amount, about 70 percent has been allocated for the war in Iraq, CBO estimates.

Funding for military operations and other defense activities totals $533 billion thus far, most of which has gone to the Department of Defense. In addition, lawmakers provided $30 billion during the 2004–2007 period to train and equip indigenous security forces in Iraq and Afghanistan.⁽²⁾ Including the $30 billion allocated for indigenous security forces, a total of $563 billion has been appropriated since September 2001 for defense-related activities in Iraq and Afghanistan and for the war on terrorism.

In addition to funding provided for defense activities since 2001, lawmakers have appropriated just over $39 billion for diplomatic operations and foreign aid to Iraq, Afghanistan, and other countries that are assisting the United States in the war on terrorism. Of that amount, $16 billion was appropriated for the Iraq Relief and Reconstruction Fund.

Those totals include much of the $120 billion in funding provided in the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (Public Law 110-28), which was enacted in May. Of the total amount appropriated in that act, approximately $100 billion was allocated for military and diplomatic operations and veterans' benefits related to the war in Iraq and Afghanistan, and for other activities tied to the war on terrorism.⁽³⁾

Because most appropriations for operations in Iraq and Afghanistan and for other activities related to the war on terrorism appear in the same budget accounts that record appropriations for other DoD activities, determining how much has actually been spent is difficult. However, CBO estimates that appropriations for defense-related activities in Iraq, Afghanistan, and the war on terrorism resulted in outlays of about $315 billion through fiscal year 2006. Of that amount, about $95 billion was spent in fiscal year 2006—approximately $8 billion a month. CBO projects that outlays for war-related defense activities will total roughly $115 billion in 2007—an average of between $9 billion and $10 billion a month. Of the funds appropriated for war-related international affairs activities, close to $25 billion was spent through 2006, CBO estimates, and another $5 billion will be spent in 2007.

In addition to the amounts specifically appropriated for war-related activities, CBO estimates that over the 2001–2007 period, the Department of Veterans Affairs has spent about $2 billion on assistance to, and treatment of, service members, veterans, and their families as a result of operations in Iraq and Afghanistan. Those costs cover medical care provided at VA facilities, disability compensation paid to veterans with service-connected disabilities, and dependency and indemnity compensation benefits paid to survivors of service members.⁽⁴⁾

The President's budget proposal for 2008 includes a request for another $137 billion for military operations, $5 billion for indigenous security forces, and $3 billion for diplomatic operations and foreign aid. If the requested amounts are appropriated, the total amount of funding provided since 2001 for all operations in the war on terrorism would reach $747 billion. The Department of Defense has stated that its request is preliminary and that it may request additional funds during that year.

In January 2007, the President announced his plan to increase the number of Army and Marine Corps troops deployed to the Iraq theater. That increase has been accomplished largely by deploying troops sooner than was previously planned and by extending the deployment of forces already in that theater of operations.

Identifying the exact amount of the increase in deployed U.S. forces is difficult—partly because the number of troops in the Iraq theater varies continually as units are deployed and other units leave, and partly because the number of troops that would have been in the Iraq theater under DoD's earlier plan is unclear.

Data obtained from the Department of Defense indicate that approximately 155,000 Army soldiers and Marines were deployed in the Iraq theater in June 2007, compared with the 125,000 to 130,000 that CBO estimates would have been deployed under the plans that DoD announced prior to December 2006. (CBO assumes that, under those plans, force levels in 2007 would have been similar to those in June 2006. The department had previously anticipated having 15 Army brigades and Marine regiments in Iraq in 2007; there are now 20.) Additionally, DoD indicated early last year that it would begin to rely more on the Navy and Air Force to provide combat and support personnel in that theater of operations because of the demands that had been placed on the Army.⁽⁵⁾ About 35,000 Navy and Air Force personnel were on the ground in the Iraq theater in June 2007, compared with the 25,000 to 30,000 who were there in 2006. In total, the number of troops from the four military services deployed on the ground in Iraq has grown to almost 190,000—an increase of between 30,000 and 40,000 personnel relative to the size of the ground forces that CBO would have anticipated under DoD's earlier plans.

The cost to deploy those additional forces will vary depending on how long DoD sustains the higher force levels. As requested by the Chairman, CBO has estimated the costs for three alternative cases, which assume that the personnel increase is sustained for four months, 12 months, or 24 months, respectively.

CBO based its estimate on appropriations provided in 2007 for military operations in Iraq and Afghanistan, and for the war on terrorism—a total of $152 billion—and subtracted from that amount the costs of activities not related to the conflict in Iraq and Afghanistan or not likely to vary significantly as a result of changes in the number of deployed troops. Of the funds provided in 2007 for personnel and personnel support, equipment repair and replacement, operating support, and transportation, CBO estimates that, in total, $100 billion was related to the size of the deployed forces. CBO projected costs for operations in Iraq in future years on the basis of changes to that force level that would occur under the three cases specified above. Most costs would be incurred during the deployment, but some would arise from restoring or replacing worn or damaged equipment and could extend beyond the end of the deployment by a year or more.

In the first case, current force levels—totaling about 190,000 on the ground in the Iraq theater—would be sustained for four months (at a cost of about $1.5 billion a month) and then decline over a four-month period, beginning in October 2007, to about 155,000. The increase in costs in that case would total $10 billion over fiscal years 2007–2009, CBO estimates (see Table 3).

In the second case, current force levels would be sustained for 12 months and then decline to about 155,000 over a four-month period, beginning in June 2008. Increased costs in that case would amount to an estimated $22 billion over the 2007–2009 period.

In the third case, current force levels would be sustained for 24 months and then decline to about 155,000 over a four-month period, beginning in June 2009. Incremental costs in that case would total $40 billion over the 2007–2010 period, CBO estimates.

CBO has estimated the future funding requirements for operations in Iraq and Afghanistan, and for other activities related to the war on terrorism, under two broad, illustrative scenarios specified by Congressman Spratt. In each scenario, CBO considered three cases that incorporate different assumptions regarding the length of time the increase in forces in Iraq would be sustained. Under the first scenario, the number of deployed troops would decline from an average of approximately 210,000 active-duty, Reserve, and National Guard personnel on the ground in fiscal year 2007 to 30,000 in 2010 and would remain at that level over the 2010–2017 period, though not necessarily in Iraq and Afghanistan. In the second scenario, the number of deployed troops would decline more gradually over a six-year period, until 75,000 remained overseas in 2013 and each year thereafter (see Table 4). CBO estimated the costs for both scenarios under the assumption that the current force level in Iraq would be sustained for periods of four, 12, or 24 months, for a total of six projections of funding for military operations.

The funding required for military operations over the 2008–2017 period would be different for each scenario. However, the number of personnel deployed in 2007 is the same in each projection, and CBO estimates that the $145 billion that the Congress provided for military operations in 2007 will be sufficient to cover the costs in that year.⁽⁶⁾

Scenario One: The Number of Deployed Troops Is Reduced to 30,000 by 2010. If the current personnel level in Iraq was sustained for four months, total deployed forces would begin to decline in October 2007. CBO assumes that the number of troops on the ground would drop to 180,000 in 2008 and then decline to approximately 100,000, on average, during 2009. At the beginning of 2010, 30,000 personnel would remain deployed. Such a case would require $406 billion in funding over the 2008–2017 period, CBO estimates (see Table 5).

Alternatively, if the current personnel level in Iraq was sustained for 12 months but then began to decline in June 2008, the total number of deployed troops would average 210,000 on the ground in 2008. Under this scenario, CBO assumes that the number would then decline to approximately 100,000 personnel, on average, during 2009 and then to 30,000 at the beginning of 2010. This case would require $440 billion in funding over the 2008–2017 period, CBO estimates.

If the current personnel level in Iraq was sustained for 24 months, however, and then began to decline in June of 2009, the total number of troops deployed to that theater would increase to an average of 220,000 on the ground in 2008, before declining to an average of 190,000 in 2009. CBO assumes that the remaining forces would be withdrawn rapidly during the last quarter of fiscal year 2009 until 30,000 remained deployed at the beginning of 2010. That case would require an estimated $528 billion in funding over the 2008–2017 period. (It is not clear whether DoD could withdraw 190,000 troops over a three-month period or whether such a rapid withdrawal would entail additional costs. A larger force was withdrawn over a period of several months following the liberation of Kuwait in 1991, but that force did not penetrate as far from major ports and airfields in Kuwait and Saudi Arabia and began withdrawing within a few months after combat operations ended, before durable positions were established.)

Scenario Two: The Number of Deployed Troops Is Reduced to 75,000 by 2013. Under this scenario, if the current personnel level in Iraq was sustained for four months, total deployed forces would begin to decline in October 2007 to an average of 180,000 on the ground in 2008. Troop levels would decline slightly in 2009, to approximately 175,000, and then drop more rapidly thereafter until 75,000 remained deployed at the beginning of 2013. That case would require $845 billion in funding over the 2008–2017 period, CBO estimates.

Alternatively, if the current personnel level in Iraq was sustained for 12 months and then began to decline in June of 2008, total deployed forces would average 210,000 on the ground in 2008 and then decline to an average of 175,000 in 2009. Troop levels would decline steadily each year thereafter until 75,000 remained deployed at the beginning of 2013. Such a case would require $879 billion in funding over the 2008–2017 period, CBO estimates.

Finally, if the current personnel level in Iraq was sustained for 24 months and began to decline in June of 2009, total deployed forces would increase to an average of 220,000 on the ground in 2008 and then decline to approximately 210,000 in 2009. That number would be further reduced to 165,000 in 2010, followed by additional reductions in subsequent years until 75,000 remained at the beginning of 2013. CBO estimates that such a case would require $931 billion in funding over the 2008–2017 period.

In developing its estimates, CBO assumed that the cost to train and equip indigenous security forces in Iraq and Afghanistan would be approximately the same under either scenario. To fund that effort, the Administration requested, and the Congress provided, $13 billion in 2007—a significant increase over the $5 billion appropriated in 2006 (see Table 6). The Administration stated that the additional funding would enable those countries to field capable police and military forces sooner and that it anticipates less funding will be needed in 2008. On the basis of funding requested for 2008, CBO estimates that DoD would require about $50 billion over the 2008–2017 period to continue training and equipping indigenous security forces in Iraq and Afghanistan.

CBO projected the future costs of diplomatic operations and foreign aid in Iraq and Afghanistan on the basis of the amounts provided for those activities in 2007. For that year, the Congress appropriated just over $5 billion to fund diplomatic operations, assist local governments, and promote economic development. For these two scenarios, CBO estimates that costs for diplomatic operations and foreign aid would total about $4 billion for fiscal year 2008 and $16 billion over the 2008–2017 period.

CBO does not include in this estimate the cost of routine diplomatic operations after 2010 but anticipates that additional security costs of roughly a billion dollars each year will be incurred throughout the period covered by this analysis. (Those costs will depend heavily on future political and military developments in Iraq and Afghanistan.) We also expect that the United States will continue to provide foreign assistance to both countries during this period and beyond. Because the United States provides substantial amounts of foreign assistance to countries around the world in its conduct of foreign policy, however, CBO's estimates for this analysis do not include such assistance after 2010.

CBO estimated spending for medical care, disability compensation, and survivors' benefits on the basis of casualty rates for veterans of operations in Iraq and Afghanistan over the 2003–2006 period. Almost $1 billion in supplemental appropriations was provided to the VA in 2007 for medical administration costs, medical and prosthetics research, medical services for veterans of those operations, and other related purposes. In addition, CBO estimates that the VA will spend another $0.7 billion in 2007 for medical care and disability compensation for veterans of operations in Iraq and Afghanistan, as well as for compensation for survivors of service members who die in those operations.

Under the first scenario, in which the number of deployed troops declines to 30,000 by 2010, the VA would spend more than $9 billion over the 2008–2017 period on medical care, disability compensation, and survivors' benefits. Alternatively, if deployed forces declined to 75,000 by 2013, as in the second scenario, the VA would spend almost $13 billion for those purposes, CBO estimates (see Table 7 ). The costs of those two scenarios would not vary substantially with changes in the number of months that deployed forces were maintained at the current level before troop levels began to decline.