Paying for the Afghanistan Surge December 2, 2009

Paying for the Afghanistan Surge

By Gordon Adams

While costs will not dictate how we pay for the Obama surge in Afghanistan, they will be a subject of strong debate in the Congress.  There are many unknowns about the costs and still a lot of work being done in the executive branch to figure them out.

Costs, after all, were not the constraint put on the policy decision and it was noticeable that OMB Director Peter Orszag was only brought into the discussion very late in the decision-making game.

What should we anticipate and how should we think about the costs of the surge?

First, $30 billion is the “figure du jour,” but it is not likely to be the right number.  CRS estimates would lead to the conclusion that about $1 billion per thousand troops is a good ballpark if you are using your own personal envelope.  However, two other elements are likely to enter in: accelerated deployment, and non-military costs.

The President has decided to deploy quickly, which means much of the troops and equipment will be airlifted to Afghanistan.  Airlift is substantially more expensive than sealift, which could raise the costs to deploy.

And there has been no discussion of associated security assistance and civilian assistance programs.  While the FY2010 budget did include funding for both (more than $8 billion in DOD security and foreign assistance; $2.8 billion in State/USAID economic assistance) the commitment the President made for civilian assistance is likely to go beyond that budget request, and will add to the FY 2010 bill.

Second, will the administration offset those costs, so we don’t have to borrow more to pay for them?  Simple answer: No.  This is going to be an FY 2010 budget supplemental, coming to Congress sometime next year, when the fiscal year is roughly half gone.  No way is DOD or State going to find offsets in existing, appropriated funds it can cut to support such a large bill.  And no way is DOD going to reprogram funding to this purpose; they are limited by a reprogramming ceiling well under $5 billion a year.

Third, this means a defense and an international affair supplemental is on its way to Congress.  It is necessary because the cost of the surge was not budgeted.  And it will not be offset.  So it will likely fly in the face of the commitment the administration made nearly a year ago to fund war costs as part of the regular budget process, not as supplementals or “emergency” spending. Probably necessary, but breaking that commitment nonetheless.

Fourth, what will Congress do with it?  Short answer: pass it.  While a good number of members will want to debate the policy in the framework of the funding, if history is any guide, very few will want to leave themselves vulnerable to the charge that they did not support forward deployed forces, especially in an election year.

Don’t get me wrong.  There will be a debate and lots of “virtual ink” spilled over such issues as a tax on the wealthy, excessive spending, the deficit, the urgency of job creation, fiscal recovery, and the health bill.

But in the end, the funds will be provided.  Either the administration will get enough Republican support to pass it with reduced Democratic support, or enough side deals will be cut with Democrats to obtain that support.  But it will pass.

Is there a new “emergency” for the war budget? November 12, 2009

by Dr. Gordon Adams and Rebecca Williams

The Obama administration repeatedly criticized the Bush administration’s over-reliance on emergency supplemental budget requests to fund the wars in Iraq and Afghanistan. From FY 2001 to FY 2009, more than $800 billion was funded through supplemental appropriations for the Defense (050) budget alone.  Once in office the new administration pledged to return to the “regular order” with war spending included in its budget requests for international affairs and defense, giving Congress the opportunity to deal with the requests through the regular appropriations cycle.  Understandably, the administration violated this principle for FY 2009, as war costs had not been fully funded for that year and the supplemental request had already been prepared by the outgoing administration.

In keeping with the promise of budget integrity, the administration requested and received $130 billion for FY 2010 war costs. The war bill was slimmed down, more clearly focused on direct war spending, and subjected to greater congressional scrutiny.  On the verge of passage, this fall, however, it looks like FY 2010 war costs may not have been fully-funded, and the administration is going to have to violate the principle again.  Moreover, the FY 2011 “plug” of $50 billion for military costs is starting to look like an underestimate, which means the February budget may have a bigger war bill than projected.

Rumors are already circulating that an emergency supplemental request will be needed this year.  It may be inevitable.   The administration is about to decide to increase the size of the force in Afghanistan, but that augmentation was not built into the regular FY 2010 “base” budget or into the $130 billion for Overseas Contingency Operations (OCO).  The significant costs associated with troop increases (between $500 million and a $1 billion for every 1,000 troops deployed) would mean that a 35,000 troop deployment could cost as much as $35 billion that is not in any current budget.

Force withdrawals from Iraq could, some would say, offset this cost.  But those forces are going to move slowly out of Iraq, meaning the savings are not immediate.  Moreover, although reducing troops would appear to lower costs,  costs actually rise in the near term.  US troop levels in Iraq are not expected to change until after the parliamentary elections in January, but the Army estimates it would cost $12- $13 billion a year for at least 2 years to repair, replace, and rebuild the equipment used in Iraq once US forces begin to leave.  According to a GAO report, additional war-related costs could also include: closing the large number of installations in Iraq; proper management of hazardous materials and waste; and investment in training and equipping to return units to levels capable of performing “full spectrum operations.”  These costs were not fully covered in the FY 2010 budget request and will need to be funded.

One way or another, it looks increasingly like another FY 2010 supplemental is coming, and the FY 2011 war bill will be higher than expected.