Buildup to Persian Gulf War Cost U.S., Allies $11.1 Billion : Finance: Operation Desert Shield tab for U.S. was $1.36 billion. About $6.6 billion has been received from other countries, officials say.

Operation Desert Shield cost $11.1 billion between August and December, the Bush Administration said Tuesday in its most detailed estimate to date.

It offered no new details on the cost of the crisis in the Persian Gulf since the war began in January.

In testimony before the Senate Budget Committee, Richard G. Darman, director of the Office of Management and Budget, calculated that America’s allies have pledged $9.74 billion in cash and in-kind payments to defray costs incurred by the U.S. military in the Persian Gulf during calendar year 1990. About $6.6 billion in cash and in-kind payments have been received for that period, Darman said.

Total U.S. costs for 1990 not covered by the allies total $1.36 billion, less than the $2 billion authorized by Congress to cover expenses in 1990.

Darman offered far fewer details on costs incurred since the war began three weeks ago. He conceded that the Administration has no contingency plans on how to finance the war if the allies do not come through with the $51.8 billion pledged for the first three months of 1991.

The Administration estimates that the $51.8 billion in pledges will cover all but about $15 billion in war costs for the first three months of 1991; the final $15 billion will be financed by the United States with more deficit spending.

“You can see that if the war costs $67 billion in the first three months, then we would have it fully accounted for through the allies and the budget,” Darman said.

Darman stressed that the Bush Administration believes that all of the pledges will translate into cash. He said that many pledges have not arrived because the United States only began to request further assistance for the war effort in January.

He added that the White House has made it clear to the major allies that have made pledges that they will be expected to provide more if the war lasts beyond the end of March.

“Our requests to them have been explicitly made for the first quarter of 1991, and they explicitly understand that if the war goes longer, we will come back with further requests, and they will be expected to provide further assistance,” Darman said.

Separately, President Bush reiterated Tuesday that the Administration remains strongly opposed to a tax to finance the war, despite a growing concern in Congress that the extra military expenditures resulting from the conflict will bloat the deficit, especially if the allies do not live up to their promises.

“I can see no reason for a war surtax,” Bush told reporters.

Democrats in Congress warned that America should not pass on the costs of the Persian Gulf conflict to future generations.

“Whatever the cost of the war, we ought to pay for it,” Sen. Paul Simon (D-Ill.) said during the budget committee hearings. “It is just not wise not to pay for a war on an ongoing basis. It is not right to expect the only people to sacrifice to be the troops in Saudi Arabia and their families.”

Meanwhile, Darman defended the record of America’s allies, arguing that they have come through with far more pledges of assistance than the Bush Administration originally expected.

The Administration initially planned on having the allies cover 50% of the war’s costs, but the allies so far have pledged enough to cover about 80% of the costs, Darman said. He said that Saudi Arabia and Kuwait have been quite prompt with their checks, and now “pay on time, on the 15th of every month.”

He also conceded that in some cases allied contributions have been slow because of Washington’s bureaucracy. Darman admitted that one ally, which he did not identify, has not come through with all of its pledged contributions primarily because the Bush Administration has failed to send the ally a bill.

“We will send them the bill, I can assure you,” he said.

Sen. Jim Sasser (D-Tenn.), chairman of the Budget Committee, complained to Darman that the Administration seems unprepared to pay for the war if the allies do not live up to their promises.

He charged that the White House seems far too willing to accept allied promises at face value, especially because a few allies seem reluctant to back up their pledges with cash.

Sasser said that he believes the chances that Japan will come through with its promise of $9 billion are no better than “50-50.” Yet, he added, a $9-billion investment to protect Japanese oil supplies would represent “one of the greatest bargains in the history of the modern world.” Sasser complained that strong opposition in the Japanese Parliament seems likely to kill Japan’s assistance.

Darman said that Japan has already provided $1.7 billion in cash and in-kind contributions during 1990, out of total pledges for that year of $2.5 billion.

COMPARING WARS AND COSTS

The cost of the Gulf War could surpass $50 billion before the end of the year, according to White House estimates. Some government and private analysts put if far higher--$15 billion a month, or almost $180 billion for the year. Defense records show these costs for other wars:

* WORLD WAR II: $288 billion for almost four years, or $6.5 billion a month.

* KOREAN WAR: $54 billion for three years, or about $1.5 billion a month.

* VIETNAM WAR: $111 billion for an almost nine-year span of U.S. combat involvement, or about $1.1 billion a month.

Defense officials say even the official estimate of costs could go higher when the added expense of resupply logistics and increased air cover for a ground war are added in.

Source: Reuters