How US is deferring war costs
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"Calling it an emergency means the spending does not get the scrutiny," he adds, because then the spending is reviewed by only one committee – House Appropriations. In addition, he says, emergency spending is exempt from caps on discretionary spending. This has prompted the military to include in the bill items that are not directly related to the war. Making the spending a part of the budget would end the practice of some members placing pet projects on a bill that must be passed, he says.Skip to next paragraph
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Numbers are fuzzy on how much has been spent so far on the global war on terror. According to the House Appropriations Committee, some $471 billion has been committed so far. Spratt says it's closer to $507 billion. By the end of this year, on a cash basis, the wars in Iraq and Afghanistan will be closing in on the costs of the Vietnam War ($650 billion in today's dollars) and the Korean War ($691 billion).
Some analysts believe the cost of the war is much higher than Congress estimates. In a study last January and updated in October, Harvard Prof. Linda Bilmes and Columbia Prof. Joseph Stiglitz estimated the budgetary and economic cost of the war at $2 trillion.
Ms. Bilmes, in a phone interview, says Congress looks only at its cash outlays, not at the war's future costs. For example, she says, an estimated 42,000 light trucks are in use in Iraq. Although it costs something to run them, the major cost will be replacing them. "That's not factored into the cost of the war," she says.
The same is true of the cost of taking care of injured veterans in the future. "After our study came out, what surprised us is that the VFW, the Vietnam Vets, and others said, 'Thanks for shining the spotlight on this issue, but your numbers are too low,' " Bilmes says. After working with the vets, she concluded that the future costs of caring for the wounded were much higher than she had estimated.
Just the cash costs alone have mushroomed over the past two years, says Steve Kosiak, an analyst at the Center for Strategic and Budgetary Assessments, a think tank in Washington. He estimates that Congress has appropriated nearly $300 billion during that period. "Perhaps some of the additional cost is for repairing the equipment," he says. "But it's fair to say it's partly a mystery why it's up so much."
Polls show people are concerned about the war, says Dennis Jacobe, chief economist at the Gallup Organization in Washington. But, he adds, "they are not concerned about the cost."
This is partly because of the way the war is funded through the supplemental budget process, Mr. Jacobe says. But it's also because the war has not disrupted the economy the same way past wars have. "It's really had no significant impact except for the deficit spending," he says.