Costliness of the war is subject to debate
Analysts say way to pay is problem
NEW YORK -- After four years, America's cost for the war in Iraq has reached nearly $500 billion -- more than the total for the Korean War and nearly as much as 12 years in Vietnam, adjusting for inflation. The ultimate cost could reach $1 trillion or more.
But even though the war has turned out to be much more expensive than Bush administration officials predicted on the eve of the March 2003 invasion, it is relatively affordable -- at least in historical terms.
Iraq eats up less than 1 percent of the nation's gross domestic product, compared with 14 percent for Vietnam and 9 percent for Korea.
"I think it's hard to argue it's not affordable," said Steven M. Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments, a defense think tank in Washington.
The problem, he and other budget analysts argue, isn't so much the overall cost of the Iraq war; it's the way the government has chosen to pay for it.
War funding for both Iraq and Afghanistan has come in the form of supplemental appropriations outside the normal federal budget process. Typically these "supplementals" are used to pay for unexpected emergencies and they receive much less scrutiny from Congress.
President Truman stopped asking for supplementals after the first year of the Korean War. The Vietnam War started appearing in the federal budget beginning in 1966, the year after regular troops were committed.
But after four years the Iraq war is still being funded with supplementals. In December, congressional budget leaders from both parties sent a letter to President Bush asking him to start paying for Iraq through the traditional budget process. The administration has done that in its 2008 budget year request -- but not before asking for another $100 billion in supplemental funding to keep the war going through the end of this year.
Unlike past US wars, the Iraq war is being paid for almost entirely with debt. Still, administration officials downplay the war's cost and the growing defense budget, which will be larger by the end of this year than at any time since World War II.
Defense Secretary Robert M. Gates acknowledged in congressional testimony last month that his department's 2008 budget request, along with supplemental funding for the war, had produced some "sticker shock." But he said defense and war spending is still only about 4 percent of the nation's total economic output.
The war's costs will continue to accrue long after the last US troops finally leave Iraq. A recent study by Linda Bilmes of Harvard University's Kennedy School of Government put the total cost of providing medical care and disability benefits to veterans of Iraq and Afghanistan at $350 billion to $700 billion.
That cost is partly a result of the number and type of casualties the Iraq war has produced. Troops in Iraq have a much better chance of surviving serious injuries than those wounded in previous wars; there have been 16 troops wounded there for every fatality, compared with 2.6 injuries per death in Vietnam and 2.8 in Korea.
Bilmes said the Pentagon and the administration have failed to plan for the cost of caring for the injured veterans.
In a study coauthored with Columbia University economist Joseph Stiglitz, Bilmes estimated that the real price of the Iraq war, when you add up spending to date, future costs, and economic impacts such as elevated oil prices, is well over $2 trillion. 