War’s Unknown Financial Costs

As Congress steams toward authorizing a possible war against Iraq, it’s blank check time for U.S. taxpayers.

No one knows exactly how much money it would cost to wage war against Iraq because President Bush has not said what kind of military attack he envisions, should he decide one is necessary.

But Bush’s top economic advisor has said it could cost as much as $200 billion, a significant drain on a federal budget already swimming in red ink.

The Congressional Budget Office, while declining to predict an overall figure, estimates that combat could cost as much as $9 billion a month--a figure that dwarfs current fiscal concerns. The entire U.S. budget for the 2003 fiscal year is stalled in Congress over a $9-billion difference between Bush and congressional Democrats.

Lawmakers generally view the decision to go to war as a moral and strategic choice, not one that hinges on economic or budget policy. But they are still asking questions about what financial impact to expect--and those questions have been left largely unanswered during the congressional debate on Bush’s push to confront Iraqi President Saddam Hussein.

“Estimating the cost of a still-undefined and undeclared war with Iraq is a difficult undertaking, to say the least,” Senate Budget Committee Chairman Kent Conrad (D-N.D.) said recently. “But let’s be clear. This debate should not be driven by how much it will cost U.S. taxpayers.”

Rep. John M. Spratt Jr. (D-S.C.) said Wednesday it was appropriate that fiscal concerns were “conspicuously absent” from House debate. But he also urged lawmakers to recognize the pressures a war would put on a federal budget that is already projected to run $452 billion in deficits over the next four years.

“The cost, whatever the cost is, is not beyond our means in a $10-trillion economy. But it is beyond our budget,” Spratt said.

One factor could ensure that the price tag for attacking Iraq would be greater for the United States than in the 1991 Persian Gulf War.

That conflict cost about $61 billion, but other countries in the international coalition put together by the United States contributed $48 billion.

It is uncertain that in a new fight with Iraq, Bush would be able to assemble such a broad coalition of allies and potential partners in sharing the cost of combat and postwar reconstruction.

“The forces to carry out this mission and to pay for this mission will come from the United States,” said Senate Appropriations Chairman Robert C. Byrd (D-W.Va.), a leading critic of Bush’s Iraq policy. “There can be little question of that. If the rest of the world doesn’t want to come with us at the outset, it seems highly unlikely that they would line up for the follow-through.”

Some Democrats are concerned that the cost of waging war and of coping with its aftermath would make it harder to find room in the U.S. budget for such priorities as education aid and prescription drug coverage for Medicare recipients.

“Schoolkids will pay” for a war with Iraq, said Rep. Pete Stark (D-Hayward). “There’ll be no money to keep them from being left behind--way behind.... And there won’t be any money for a drug benefit because Bush will spend it all on a war.”

On the other hand, war spending could simply add to the deficit, if Congress refuses to choose between guns and butter and instead finances both. That could rile fiscal conservatives like Mitchell E. Daniels Jr., Bush’s budget director, who said Wednesday an armed conflict with Iraq “should not leave a residue of bigger government and higher taxes, as many wars have.”

Daniels estimated that the cost of responding to last year’s Sept. 11 terrorist attacks added $80 billion in federal spending.

He said he had no idea what a possible war with Iraq would add to government spending.

That is in part because Bush says he has not yet decided whether to launch a military strike. And if he does, the cost will be affected by whether it is predominantly a land or air attack, whether it is a quick or protracted conflict and by the role the United States plays in Iraq in the aftermath.

Lawrence B. Lindsey, Bush’s chief economic advisor, estimated in a recent interview with the Wall Street Journal that a war with Iraq would cost from 1% to 2% of the gross domestic product--which amounts to from $100 billion to $200 billion. Lindsey did not detail how he arrived at those figures.

If it cost that much, it would amount to nearly four times the amount the president requested for the Department of Education.

The most detailed effort to estimate war costs has come from the CBO, which projected $6 billion to $9 billion a month in combat expenses, depending on the nature of the warfare. In addition, the CBO estimated it would cost:

* Up to $13 billion to deploy U.S. forces to the Persian Gulf region.

* Up to $7 billion to return U.S. troops to their home bases after the war.

* Up to $4 billion a month for occupation of postwar Iraq.

The estimate did not include potential costs of humanitarian assistance and postwar rebuilding of Iraq, which could be considerable.

The CBO also did not try to calculate potential casualties or the cost of responding if Iraq uses chemical or biological weapons.

“Unknown factors abound in considering how a conflict with Iraq would actually unfold,” the CBO report says.

*

Times staff writer Nick Anderson contributed to this report.