Saturday 20 November 2010

New Afghan War Plans Could Cost US Taxpayers an Extra $125 Billion

New Delhi - As leaders at the NATO summit in Lisbon meet this weekend to discuss strategy in Afghanistan, US war planners have been signaling that troop withdrawals set to begin in 2011 will be mostly symbolic and that the handover to Afghan forces in 2014 is “aspirational.”
Such could cost American taxpayers handsomely at a time when deficit cutting has gripped Washington. According to one estimate, softening those deadlines could add at least $125 billion in war spending – not including long-term costs like debt servicing and health care for veterans.
“I don’t think anyone is seriously talking about cutting war funding as a way of handling the deficit,” says Todd Harrison, a defense funding expert at the Center for Strategic and Budgetary Assessments. But higher war costs “could hurt the base defense budget [and] the rest of the discretionary budget.”
A Shift in US Deadlines

Currently there are some 100,000 US troops in Afghanistan, which includes the 30,000 troop surge announced by President Obama in December 2009. At that time, the president also said the US would “begin the transfer of our forces out of Afghanistan in July of 2011.”
Such was interpreted by many Americans and Afghans to be a significant withdrawal in 2011. In recent months, with the situation in Afghanistan showing few signs of stabilizing, US officials have focused more on 2014 as the date for withdrawal.
Speaking at the NATO summit in Lisbon, Mr. Obama described the timeline as “a transition to Afghan responsibility beginning in 2011 with Afghan forces taking the lead for security across Afghanistan by 2014.”
But the Pentagon on Thursday said the goal of handing over security duties to the Afghans in 2014 was “aspirational.”
“Although the hope is, the goal is, to have Afghan security forces in the lead over the preponderance of the country by then, it does not necessarily mean that ... everywhere in the country they will necessarily be in the lead,” said Pentagon spokesman Geoff Morrell.
Crunching the Numbers

So how much extra would it cost if the bulk of the withdrawal starts rather than finishes around 2014? About $125 billion, says Mr. Harrison at the Center for Strategic and Budgetary Assessments, at that's just through 2014. He uses two different troop level scenarios – one high, and one low. He calculates costs based $1.1 million per soldier per year, which reflects the five-year average in Afghanistan.
The lower cost – $288 billion – assumes that the troops involved in Obama’s surge would be withdrawn by 2012, and that by the end of 2014 only 30,000 US troops would remain. The higher cost – $413 billion – assumes no drawdown will happen until 2013, and 70,000 US troops would remain by the end of 2014. The difference: $125 billion.
Another defense analyst, Anthony Cordesman with the Center for Strategic and International Studies, has a slightly higher estimate at $441 billion. That jumps to $476.5 billion by including State Department expenses and immediate medical costs for veterans.
But he says nothing can be read into the talk about 2014.
“The nice thing about 2014 politically is that by then you’ve either won, in which case the deadline doesn’t really matter anymore … or if you haven’t succeeded you are out any way,” Dr. Cordesman says.
Both Harrison and Cordesman caution that future cost estimates are difficult to make.
“There’s no good way of doing it,” says Harrison. “It depends on intensity of operations, the number of troops we have deployed, and it also depends on the mission that we give them.”
Some missions are more costly. For instance, the Pentagon has reportedly decided to dispatch tanks to Afghanistan for the first time in the war. That will add to the price tag given the fuel and transport costs.
“The enemy [also] gets a voice how much this is going to cost us,” says Harrison.
War Spending in Cost-Conscious Washington

For its part, the Defense Department has not tipped its hand to the bean counters. Pentagon estimates for supplemental budget requests for Overseas Contingency Operations (OCO) – Afghanistan and Iraq – contain low placeholders of $50 billion annually starting in 2012. The request for 2011 is $159 billion.
The guessing game over the OCO does not factor in all the total costs of a war. One of the biggest unknowns is the cost of medical care for veterans decades down the line. Economists Joseph Stiglitz and Linda Bilmes have argued that health care for Iraq war veterans will top $600 billion. Other costs beyond operations, like debt servicing and macroeconomic factors, could drive that war’s total cost over $3 trillion.
In Afghanistan, the US will also be paying for many years to support the Afghan security forces that it trains because their cost exceeds Kabul’s revenues.
But focusing solely on the OCO costs, the wars in Iraq and Afghanistan have cost a combined $1.1 trillion to date. Adjusting for inflation, that’s more than any US conflict except World War II.
Cordesman points out that as a percentage of GDP, current defense spending and war costs are historically low. Iraq and Afghanistan together consume about 1.2 percent of America's GDP. By contrast, in their peak years of conflict, World War II consumed 35.8 percent of American GDP and the Vietnam War consumed 2.3 percent of GDP.
Harrison, too, says the $125 billion over four years is nowhere near the scale of the US's annual trillion-plus deficit.
But others say war spending will heat up as a topic in deficit-conscious Washington – particularly when the Pentagon has to put forth real numbers early next year rather than placeholders for 2012 war spending.
“When that happens in a Congress where they are counting every penny – or I guess every billion – to suddenly show up and say we kind of misestimated this, it’s going to be triple what we said, that’s going to be embarrassing to say,” says Charles Knight, co-director Project on Defense Alternatives. 

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