Summary

GAO discussed the estimated cost and financing of Operation Desert Shield. GAO noted that: (1) the total cost of Operation Desert Shield without any hostilities would exceed $130 billion in 1991 if the forces now in place remained there throughout the fiscal year (FY); (2) the cost of Operation Desert Shield consisted of a baseline cost estimated at $100 billion, an incremental cost of mounting the operation estimated at $30 billion, and related costs such as debt forgiveness and humanitarian assistance estimated at $7 billion; (3) the Department of Defense (DOD) obligated its FY 1991 appropriations for operations faster than normal and was expected to exhaust some of those funds by April or May 1991; (4) 35 countries furnished troops and equipment for the operation and DOD reported cash contributions of about $4.3 billion and in-kind contributions of about $379 million; (5) three suggested DOD financing options included supplemental funding, transfer of funds among DOD accounts, and additional contributions from allies; (6) uncertainties which could affect cost estimates included the unknown value of offsets, inadequate DOD guidance, and pending decisions regarding rotation; and (7) GAO believes that Congress should provide periodic appropriations instead of a supplemental lump sum, as actual costs become clearer.