How the war tab may shift agenda in Washington
Congress is likely to pay, but may trim tax cuts and prized programs.
The cost of America's involvement in Iraq is rising to the point where it appears likely to influence Washington's agenda in ways that go far beyond foreign and military policy.Skip to next paragraph
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Instead of a quick war paid for by a new flood of $20-a-barrel Iraqi oil, policymakers are hunkering down for a much more protracted and costly engagement. The tab - some $150 billion, including much of the $87 billion requested by President Bush this week - could affect some of the most cherished programs of both parties, including an unusually ambitious presidential agenda with another $878 billion in hoped-for tax cuts this year.
So far, the White House is casting most of this as wartime spending, which Americans have been willing to support in the past. Some 75 percent of Mr. Bush's new request is to fund military operations for the war on terror, almost entirely in Iraq.
"Almost anything that's going to cost money is going to be looked at with a much harder and more scrutinizing eye after this," says Ross Baker, a political scientist at Rutgers University. "The well-being and safety of troops engaged in combat trumps virtually everything else - social needs, subsidies - all kinds of things. It certainly does have the effect of crowding out other policy."
Indeed, even those who opposed the war in Iraq say it's unthinkable that Congress will refuse support to American troops in the field.
"The president assumes, and probably rightly so, that Congress may hem and haw, but they will give him what he wants," says Ivo Daalder, a senior fellow at the Brookings Institution.
But lawmakers are already at odds at how the rising costs will ripple through the federal budget.
Before US troops began operations in Iraq, administration spokesmen told Congress that they expected that revenue from Iraqi oil would cover much of the costs of the reconstruction. On the eve of war, Deputy Defense Secretary Paul Wolfowitz told Congress that, "We are dealing with a country that can really finance its own reconstruction and relatively soon." And administration economist Larry Lindsey said that reconstruction costs of up to $200 billion would be largely offset by an increase in reasonably priced oil from Iraq.
Since those estimates have not materialized, adjustments must be made to the size of the federal budget deficit. Even before this week's emergency request, the Office of Management and Budget had been projecting a deficit of a record $455 billion for this fiscal year ending Oct. 1, and another $475 billion for fiscal year 2004.
White House spokesmen say that deficits of this magnitude are still "manageable," even with a big bump up from the new emergency request, so long as Congress holds the line on spending in 2004 and does not back off the president's "pro-growth" tax cuts.
"It is not spending we expect would go into the base [of the permanent budget]. It is for the most part overwhelmingly one-time spending," said a senior administration official, who added that the administration is not proposing any offsets for the new spending, which they say will push the deficit past half a trillion dollars.
That could force the Bush administration to adjust its own wish list. Democrats are targeting Bush tax cuts, especially those for upper-bracket taxpayers. "If this is war and American lives are at stake, it's fair to ask: Are we going to share the sacrifice or charge the cost to the national debt and pass it on to our children?" says Rep. John Spratt (D) of South Carolina, the ranking Democrat on the House Budget Committee.