"My belief is it's still premature in Iraq and Afghanistan to build those costs in" to the annual budget, Pentagon Comptroller Dov Zakheim told reporters Wednesday.

Zakheim said it took three years for the day-to-day costs of running the peacekeeping mission in the Balkans to make it into the standard operations and maintenance budget line rather than as an annual supplemental. The Pentagon received nearly $380 billion for 2004, not counting the $63 billion, itself part of the larger $87 billion supplemental requested for next year. Around $18.6 billion of that is earmarked for Iraqi reconstruction. Just over $51 billion is for military operations in Iraq and $10 billion for operations in Afghanistan.

Of the $51 billion, $2.8 billion alone is just to refurbish the military tanks, airplanes and other equipment exposed to the harsh desert environment and continuous use. It includes $5.6 billion for new equipment and weapons.

Zakheim reiterated his pledge to Congress the Pentagon would not seek any additional money in 2004. But he indicated a supplemental would be needed for 2005.

The monthly cost of the war in Iraq at its height was about $3.9 billion. Zakheim said it is now less than that and getting smaller as more American troops are withdrawn.

There are now roughly 130,000 U.S. soldiers in Iraq. By June the Pentagon expects to replace them with roughly 105,000 soldiers and Marines. At $3.9 billion a month for Iraq, the Pentagon could be requesting more than $45 billion extra in 2005, on top of the $419 billion anticipated top line for next year.

Since taking the helm of the government in 2001, the Bush administration has boosted the annual Pentagon budget by about $100 billion, from just under $300 billion to $400 billion in 2004.

In addition to that increase, the Defense Department has won nearly $155 billion extra in supplemental appropriations since 2001.

"Most people are under the misconception that the defense budget pays for wars. It doesn't," said Christopher Hellman, a budget analyst with the Center for Arms Control and Non-Proliferation in Washington, DC.

"Obviously it's a budgetary necessity but it gets you into some trouble. It's a system structured in such a way if you want to take advantage of it, it's fraught with difficulties," Hellman said.

Supplemental requests tend to be less detailed than the annual budget requests and are generally on a shorter time line. They also have greater urgency associated with them as they are only offered in times of "emergency." The $87 billion Iraq supplemental recently approved by Congress is a case in point: only the $18.6 billion earmarked for Iraq received much scrutiny from Congress. The remainder was seen as "supporting the troops" and therefore not reviewed with the same vigor.

"Twenty-five percent of the annual defense budget is part of a supplemental over the long term, and yet if we are going to have major deployments I'm not sure how we are going to get around that. But it's definitely an area for concern," Hellman said.

Supplementals have made up large huge part of this administration's Pentagon budgets. The Pentagon requested about $6.5 billion in 2001 in addition to its $310.6 billion budget. In 2002, it received an additional $22 billion post Sept. 11 supplemental in addition to the annual $350.8 billion budget. In 2003 the Pentagon received about $62.4 billion as a wartime supplemental on top of its $3882.2 billion operating budget. In 2004 it has already won $63 billion in supplements -- not counting the $18 billion earmarked for Iraq reconstruction -- on top of roughly $401 billion.

Zakheim indicated the Pentagon is on track to request $419 billion for 2005, a budget which is expected to be finalized by later December or early February. The final top line will be determined in negotiation with the Office of Management and Budget.

The 2004 budget inaugurated a new practice for the Pentagon -- that of two-year budgets rather than one.

The Byzantine budgeting process at the Pentagon absorbs tremendous numbers of man-hours and devolves into bitter fights among and between the services every year. Budgeting for two years at a time raises the stakes for each round, but also introduces some measure of predictability and stability for massive programs.

Any major changes in the services request must be offset with cuts in the budget, Zakheim said, which will leave the top line relatively untouched.

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