In a seemingly welcome exercise of congressional oversight, Rep. Christopher Shays, R-Conn., held hearings on the cost of the wars in Iraq and Afghanistan .  He's the chairman of the subcommittee on National Security, Emerging Threats, and Intern ational Relations of the House Government Reform and Oversight Committee.  He required testimony by all three congressional research agencies (the Congressional Research Service [CRS], the Congressional Budget Office [CBO], and the Government Accountability Office [GAO]) and by the departments of State and Defense. 

War Cost Estimates

CRS estimated the cost of the wars per the table below.

Table 1: CRS Data on the Costs of the Wars in Iraq and Afghanistan ($billions)

	Fiscal Year
	2001/02	2003	2004	2005	2006	Total
Iraq	2.5	51.0	77.3	87.3	100.4	318.5
Afghanistan	18.1	17.0	15.1	18.1	19.9	88.2
Noble Eagle	12.0	6.5	3.7	2.1	1.9	26.2
Unable to Allocate		3.9
Totals	32.6	78.4	96.1	107.5	122.2	439.9

(Source: "The Cost of Iraq, Afghanistan , and Other Global War on terror Operations Since 9/11," Amy Belasco, CRS Report for Congress, RL33110, p. CRS-4)

In its testimony, CBO reported different numbers:

• $433 billion, not $439.9 billion, for the total cost of the various wars.
• Of that amount, CBO counted $290 billion for Iraq , not $318.5 billion.
• CBO counted $142 billion for Afghanistan and Noble Eagle, not $114.4 billion.
• CBO also calculated the cost of interest on the national debt based on war costs ($11 billion through the end of 2006).

GAO had still different numbers, including $430.1 billion for all costs for the "war on terror".

DOD, the State Department and other Bush administration components said the real cost was $416.6 billion.

These estimates present a range of $20.3 billion. Perhaps most troubling, these differences are not over the arcane issue of how much has been "obligated" (that is, cued up inside agencies to be spent for a specific program or contractor) or "outlayed" (actually spent).  Instead, these differences are over the relatively simple question of how much has been appropriated in public bills by Congress. 

Worse yet, Congress doesn't seem to know how much it appropriated either.  In a letter of July 20, Shays brought the discrepancies to the attention of the chairman of the House and Senate Appropriations Committee.  Shays has received no reply, and Hill staff expect he will get none. 

The Mess in DOD

These differences notwithstanding, CRS, CBO, and GAO did agree on one thing: DOD's data on the costs of the wars cannot be trusted.

CBO stated in its testimony to the National Security Subcommittee:

CBO frequently has difficulty obtaining monthly reports on war obligations [i.e. how the money is planned to be spent] and other data.  Often the agency receives that information months after the data are officially approved for release.

CBO also stated:

DOD's supplemental budget requests and the monthly obligation reports issued by the Defense Finance and Accounting Service often do not provide enough detail to determine how ... funds for operations in Iraq and the war on terrorism have been obligated.

GAO's testimony was more pointed:

GAO's prior work found numerous problems with DOD's processes for recording and reporting GWOT [global war on terrorism] costs, including long-standing deficiencies in DOD's financial management systems and business processes, the use of estimates instead of actual cost data, and the lack of adequate supporting documentation.

For example, GAO found $1.8 billion in expenses that were double counted in 2004 and 2005; some costs to be "materially overstated" by as much a $2.1 billion in 2004.

GAO concluded:

As a result, neither DOD nor the Congress reliably know how much the war is costing and how appropriated funds are being used or have historical data useful in considering future funding needs.

CRS' testimony was the most revealing of all.  It asserted that reporting on the costs of the wars requires the "use of estimates to fill gaps and resolve discrepancies and uncertainties" encountered in DOD's data.

The terms "gaps" and "discrepancies" are perhaps a bit too polite for some of the problems CRS found, including:

• In fiscal years 2001 to 2002, DOD "obligated" [intended to spend] $1.2 billion more than the budget authority appropriated by Congress for the wars -- a potential violation of the Anti-Deficiency Act.

• The funding sources for $2.5 billion spent in 2002, "presumably for initial troop deployments" for the Iraq war, were "unclear."

• $7 billion that was appropriated in 2003 to DOD for the war has apparently not been spent, but in any case DOD's records on what happened to the money do not exist.

• Yet again, in 2004, DOD obligated $2 billion more than the appropriations available to it from Congress -- another potential Anti-Deficiency Act violation.

Most of the above data pertain to "obligations," not the money actually spent (outlays).  The outlays for the war are impossible to track; DOD mixes those records with outlays for non-war costs, making it impossible to determine if the money was actually spent as DOD, or Congress, intended.

CRS also reported that it is not just DOD's cost estimates that are problematic.  DOD apparently cannot agree with itself on the question of how many military personnel are deployed for the wars in Iraq and Afghanistan . 

• DOD, and the press, typically report on the numbers of U.S. military personnel deployed inside Iraq and Afghanistan , not including the numbers deployed to surrounding countries to support the in-country personnel.

• Different DOD reports give different figures for the total...
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