Iraq digs hole in the budget

2004-06-02 14:34

Washington - Even by Washington standards, the $119.4bn that President George W Bush and Congress have provided for the first two years of the war in Iraq is real money.

Though a tiny fraction of overall federal spending, the figure is huge in other ways. It dwarfs the $100m that could hire 2 500 more airport security screeners or the $1bn that would let 160,000 more low-income families keep federal rent subsidies, Senatorate Democrats say. Or it could reduce the runaway US government deficit.

The $119.4bn total is the administration's most comprehensive tally of the war's financial costs so far. Of the total, $97.2bn has been for military operations, $21.2bn for rebuilding Iraq's economy and government, and $1bn for US administrative expenses there.

Congress approved the money over the past year-and-a-half with overwhelming votes, and few lawmakers doubt its need. But many of them say it soaks up dollars that other parts of the $2.4 trillion budget could use, from education initiatives to tax cuts and more.

"When you integrate Iraqi spending, which is necessary, with the effort to control spending, it puts more pressure on you to make harder choices," said Senator Lindsey Graham, R-S.C.

Runaway deficits

If not used for war, the money could take a healthy bite out of the government's runaway annual deficits, which are expected to set a record this year exceeding $400bn. The $119.4bn is four times this year's federal spending for biomedical research, 14 times what Washington will spend to clean the environment, 26 times the FBI's budget.

The total would also be enough to hand every Iraqi $4 776 - about eight times the average income.

Lawrence Lindsey, then the White House economic adviser, estimated before the Iraq war that it could cost $100bn to $200bn. Other administration officials called the figure far too large and argued that Iraq's oil revenues would let the country largely rebuild itself.

Instead, Lindsey's estimate has proven prophetic. In an interview last week, White House deputy budget chief Joel Kaplan blamed the war's costs on "unanticipated events" like the bad condition of Iraq's infrastructure and the prolonged violent resistance.

The Congressional Research Service has calculated Iraq costs for the first two years at $121.8bn, using higher defence figures than the administration. Either way, the number will grow dramatically in the near future.

Bush has already requested an additional $25bn for the US presence in Iraq and Afghanistan next year, with the bulk of the money headed to Iraq. Administration officials have said they expect to eventually seek more than $50bn for 2005.

By the time the final Iraq figure for 2005 is in, American spending there could easily exceed $160bn for 2003 through 2005. That would nearly double the combined costs - in today's dollars - of the Revolutionary War, the War of 1812, the Mexican War, the Civil War and the Spanish-American War.

- AP