By Richard Cowan
Reuters, 18 January 2007
WASHINGTON, Jan 18 (Reuters) - The steadily rising Iraq war price tag will reach about $8.4 billion a month this year, Pentagon spokesmen said on Thursday, as heavy replacement costs for lost, destroyed and aging equipment mount.
The Pentagon has been estimating last year's costs for the increasingly unpopular war at about $8 billion a month, having increased from a monthly "burn rate" of around $4.4 billion during the first year of fighting in fiscal 2003.
During testimony at a House Budget Committee hearing, Deputy Defense Secretary Gordon England said that nearly four years into the war, the Pentagon's war costs were rising because it was having to replace big-ticket items such as helicopters, airplanes and armored vehicles that are wearing out or were lost in combat.
"We have a backlog and are seeing an increase," England told the panel.
When factoring in U.S. combat costs in Afghanistan, the Pentagon will spend about $9.7 billion a month during the fiscal year that ends on Sept. 30, according to Pentagon spokesmen.
Early next month, the administration is expected to ask Congress for a further $100 billion in "emergency" war money, on top of the $70 billion already approved for this year. The request comes as President George W. Bush has sketched out an increase of 21,500 U.S. troops in Iraq that could cost about $5.6 billion.
House Budget Committee Chairman John Spratt, a South Carolina Democrat, said he hoped Congress could avoid recurring emergency funding bills for the war. "We would like to get a better grasp of the cost of the Iraq war and the global war on terrorism -- a way of accounting of costs to date and projecting costs to come."
Since fiscal 2001, Congress has approved $503 billion to pay for the wars in Iraq and Afghanistan and other aspects of the U.S. "global war on terrorism," according to Congressional Budget Office testimony. Of that, $344 billion has gone for military, diplomatic and other security costs in Iraq, the CBO said.
Most of the funds have been provided on an emergency basis, outside regular budget procedures. Critics say that obscures the true cost of the war and results in less congressional oversight.
'RESIDUAL TALE'
Democrats won control of Congress in elections last November due largely to the Iraq war's unpopularity. England said the financial burden of the conflict would persist for some time.
He said even after the war ends, and he did not estimate when that would be, there would be two years of a "residual tail" of costs for rebuilding the military.
Democrats and Republicans on the budget panel grilled England on whether the Pentagon was slipping money for expensive, nonemergency projects into the emergency war funds requests.
Specifically, they inquired about reports Bush would ask for money to pay for two "Joint Strike Fighter" airplanes that are several years from being ready for combat, along with money for ballistic missiles and Navy aircraft repairs and procurement that is unrelated to Iraq combat.
England would not comment specifically on the upcoming request for emergency war money. But he said that when equipment was lost in Iraq, it was not replaced with "something old," but with new equipment.
Democrats have promised tougher oversight of defense spending, while challenging Bush's plans to broaden the American war effort in Iraq.
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Citation: Richard Cowan. "Iraq war cost to hit $8.4 billion a month," Reuters, 18 January 2007.
Original URL: http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-01-18T233517Z_01_N18181226_RTRIDST_0_IRAQ-USA-FUNDING.XML
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