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Hidden Debt in DOD Estimates for Future Spending March 1, 2010

Posted by Alexander Brozdowski in Analysis.
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By Matt Leatherman and Alex Brozdowski

The Defense Department’s FY2011 budget request projects spending in 2012 and beyond for operations in Iraq and Afghanistan.  The number – $50 billion per year – is eye-catching because it falls so starkly below the FY2011 request of $159 billion.  Perhaps most remarkable, however, is the rationale behind this number:

“The Budget includes placeholder estimates [for overseas contingency operations] of $50 billion per year for 2012 and beyond. These estimates do not reflect any policy decisions about specific military or intelligence operations, but are only intended to indicate that some as-yet unknown costs are anticipated.”

The $50 billion estimate appears random, and random numbers have no meaning. It is striking that the Defense Department, widely known for precise out-year planning, has no grasp on the 2012 requirement.  Yet if that in fact is the case, saying so openly and omitting an estimate is the transparent and direct response.  Surely Congress would understand that no estimate does not mean wholesale withdrawal from overseas contingencies.

In fact, providing an artificially low estimate appears to be a new approach to an old trick, taking credit for fiscal responsibility now while dodging blame later when that responsibility turns out to be a mirage.

A 69% reduction in spending for overseas contingency operations from 2011 – 2012 optimistically presents both President Obama’s plans for drawing down operations in Iraq and Afghanistan and the savings those draw-downs will create.  FY12 will begin in October of next year, three months before the last U.S. forces depart Iraq and three months after the scheduled start of their withdrawal from Afghanistan. For spending to even approach the decline suggested in this estimate, the withdrawal from Afghanistan would have to be near-instantaneous and the withdrawal from Iraq could have only negligible effects.  Suffice to say that such an outcome is unlikely.

This estimate has its own logic, however, even if it is ungrounded in policy decisions and disconnected from current trends.  Each dollar below the likely requirement is a dollar shaved from the debt projection.  Thus the $50 billion projection allows the Administration to stake out more fiscally responsible ground now and, when the time comes to pay up, avoid the spendthrift label by claiming that international circumstances forced its hand.  Circumstances indeed will do so – but this requirement is foreseeable, and should have been foreseen.

The tune now becomes even more familiar.  In the Bush Administration, this maneuver was pulled by routinely grouping the costs of operations in Iraq and Afghanistan into separate requests for emergency supplemental appropriations.  To the Obama Administration’s credit, it has introduced more honest accounting by lessening the dependence on supplemental spending.  More is needed, though – these expedient projections commit the same offense, albeit by other means.

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1. It’s not over ’til it’s over: reviewing Obama’s Iraq speech « Budget Insight - September 1, 2010

[…] on, which would have meant a tremendous 69% reduction in spending for our operations in both wars—highly doubtful for myriad reasons. The President’s speech last night thus stokes more questions regarding the bottom line for […]


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