|One of the striking aspects of American military power is how little serious attention is spent on examining the key elements of its total cost by war and mission, and the linkage between the use of resources and the presence of an effective strategy. For the last several decades, there has been little real effort to examine the costs of key missions and strategic commitments and the longer term trends in force planning and cost. Both the Executive Branch and the Congress have failed to reform any key aspect of the defense and foreign policy budgets to look beyond input budgeting by line item and by military service, and doing so on an annual basis.
The program budgeting and integrated force planning efforts pioneered towards the end of the Eisenhower Administration—and put into practice in the Kennedy and Johnson Administrations—have decayed into hollow shells. The effort to create meaningful Future Year Defense Programs seem to have been given a final death blow by the Budget Control Act (BCA)—legislation originally designed to be so stupid that the Congress could not possibly accept it. Efforts to integrate net assessment with budget submissions were effectively killed by the Joint Staff decades earlier, during the Reagan Administration.
Critical Failures by Both the Executive Branch and Congress
What is even more striking, is the failure of both recent presidents and the Congress to properly analyze and justify the cost of America’s wars. If one counts the Cold War, the United States has been at war for virtually every year since 1941. The United States has been actively in combat since late 2001, and there is little prospect that it can end the need to use force to check terrorism and violent extremism within the next decade. Moreover, the Cold War may be over, but the United States still faces strategic challenges from Russia and the emergence of China as a major global power in what is already a multipolar world.
“War” may not be the normal state of U.S. national security planning indefinitely into the future, but war—and/or the constant risk of war—is a grim reality of our time. Yet, the Administration and the Congress have tended to treat warfighting as a temporary aberration—as something to be delt with by supplementals or creating short-term budget categories like the Overseas Contingency Operations (OCO) account that seem to reflect the cost of wars, but have become something of a slush fund and a mechanism for selectively avoiding the caps on defense spending set by the BCA.
Reporting by the Executive Branch seems almost designed to obscure the real costs of conflict, and avoid linking them to an examination of strategy, its effectiveness, and the prospects for conflict termination. Reporting on the civil dimensions of war is often lacking, and the civil and military budgets of war are developed and implemented separately by the departments and then reviewed (if at all) by separate Armed Services and Foreign Affairs Committees in each house and by separate elements in the appropriations committees.
Lip service references to a “whole of government approach” thinly disguise a real-world separation of what should be a fully integrated civil-military approach, and what is really a “hole in government” approach where the State Department and USAID often seem at least partially decoupled from the realities of warfighting and the Department of Defense focuses on tactical success rather than the political, economic, or broader strategic goals in warfare.
The Congress has done no better. Ironically, members of Congress are fond of criticizing the Administration for lacking a strategy. The Congress, however, can be criticized for failing to insist on adequate reporting of wartime budgets and examining their costs in detail. Aside from independent efforts by the Congressional Research Service (CRS), neither the Executive Branch nor the Congress have ever issued an official report on the costs of American’s ongoing wars, examined the trends in these costs, or insisted on meaningful reporting on their effectiveness.
The Congressional Research Service (CRS), and the General Accountability Office (GAO), have provided several reports that do provide important insights into the cost of America’s wars and the problems in the ways in which they are reported.
The closest the Congress has come to establishing a credible system of formal review is to create limited public reporting requirements on the Iraq and Afghan wars for the DoD, and the requirement for Iraq lapsed at the end of combat activity in 2011. These reports never address the costs of war, or planning, programming, and budgeting.
The Congress has also created a Special Inspector General for Iraq (SIGIR) and then a Special Inspector General for Afghanistan (SIGAR). These efforts have accomplished a great deal in terms of improving the aspects of America’s war efforts relating to aid to the Iraqi and Afghan governments and forces. However, SIGIR stopped its operations in 2011. The Special Inspector Generals also have not been tasked with addressing the overall cost of each conflict, the overall effectiveness of U.S. civil and military efforts, or the nature and success of U.S. plans and strategies.
The Need for Far Better Accountability in Planning, Programming, and Budgeting U.S. Wars
This report addresses a number of the issues that result from the failure to deal with the cost of America’s wars by providing an overview of the historical trends involved, the broader climate of U.S. defense spending, and the data that have been reported on each war as part of the Overseas budget for the Contingency Operations (OCO) account. It examines the limits in these data, the risks they impose, and possible ways of correcting current problems.
This report is divided into 12 sections, each of which illustrates the need for better planning, programming, and budgeting; as well as the need for far more transparency and better official reporting:
Summary of Direct Costs of the Afghan War, Iraq War, and Total OCO in Budget Authority vs. Other Illustrative Estimates
The charts and tables in this section summarize the actual and projected cost of U.S. wars as reported for the OCO accoun—drawing heavily largely on earlier work by the Congressional Research Service.
These latter estimates update a series of earlier CRS analyses, one of which noted that, “Other observers and analysts define war costs more broadly than congressional appropriations and include estimates of the life-time costs of caring for OEF/OIF/OND veterans, imputed interest costs on the deficit, or increases in DOD’s base budget deemed to be a consequence of support for the war…Such costs are difficult to compute, subject to extensive caveats, and often based on methodologies that may not be appropriate…”
Three alternative cost estimates are also summarized in this section.
It is important to note that separate work by Todd Harrison of CSIS in assessing the overall OCO account—Enduring Dilemma of Overseas Contingency Operations Funding, Transition45 Series, January 11, 2017—states that both Congress and the Obama administration moved items from the base budget to the OCO budget as a way of circumventing the BCA budget caps. Roughly half of the OCO budget ($30 billion) is now being used for programs and activities that were previously funded in the base budget. These issues are discussed in more detail later in this study.
If these alternative estimates—and many others—are taken into account, it is all too clear that the United States now has no official estimate of the cost of its wars. Further, without such an estimate, there is no credible basis for either Executive Branch or Congressional review of the budgets and plans for such wars, much less of the ability to effectively execute given strategies, and provide credible indicators of the cost effectiveness and progress of key elements of military and civil activity.
Cost of Current Wars Compared to Past Wars
This section updates part of another CRS study—one by Stephen Dagget—that attempted to cost past American wars from the American Revolution through the Persian Gulf War, and the early phases of the conflicts in Afghanistan and Iraq. It illustrates just how much the cost and duration of war is changing and how critical it is to properly plan, fund, and manage wars on an extended basis.
As Mr. Dagget notes, there are serious uncertainties in the cost estimates of past wars, but it is striking that if the cost to date of the Afghan and Iraq/Syria wars are shown in constant dollars, even the comparatively low end estimate of $2 trillion through FY2018 would makes these wars more expensive than every other period of conflict in American history except the American revolution, the Civil War, and World War II.
Comparative U.S. vs. Nth Country Military Spending
This section compares current total U.S. baseline and war spending with the spending of other states. The size of U.S. military spending is difficult to estimate in comparable terms. Work by Todd Harrison, for example, shows that total U.S. defense-related costs totaled some $905 billion in FY2017:
At the same time, if one does use the $619.7 billion total for the U.S., it is:
U.S. military spending has risen steadily over time, but without any serious net assessment of the patterns in that growth, the comparative efficiency of U.S. spending on baseline and war activity, and how allied and potential threat states use their budgets and resources.
Impact of the Total U.S. Military and Effort in Recent Wars as a Percent of Total Federal Spending and GDP
One key aspect of the current cost of U.S. wars is that—despite their high cost—they represent a comparatively low burden on the U.S. economy in terms of GDP, total federal spending, labor, capital, and use of the U.S. industrial base.
The difficulties in defining military expenditures do create differences in estimates of the percent of GDP, but they are comparatively minor. All recent estimates show that the burden the Afghan and Iraq/Syria wars placed on the economy did not equal the burden that the peacetime Reagan build up created, and that the percentage has dropped sharply since most U.S. combat troops left Afghanistan and Iraq.
There are, however, several problems with current projections of FY2018 and beyond. They do not include the build-up the Trump Administration has said will begin in FY2019. Past estimates of spending have been consistently wrong, and the inputs have been consistently undercosted.
This illustrates another critical failure in the preparation and review of both Baseline and War budgets. There have been no serious attempts to develop Future Year Defense Program costs in recent years, largely because of the Budget Control Act, and DoD outyear budget forecasts have been political placeholders.
Long term budget projections by the CBO and others invariably assume the end to war with one or two years in the future and no major contingency thereafter. This has been grossly unrealistic since the late 1930s.
It is particularly unrealistic because this assumption is critical to estimating steady reduction in military spending, sizing the impact of rising entitlement and mandatory budget costs, and the size of the deficit.
Size and Cost of the U.S. Military and Civil Effort (DoD and State/USAID) Overseas Contingency Operations in FY2001-FY2018
Total estimates of the cost through FY2018 have been made earlier. The status of the FY2018 OCO requests for DoD and State are now highly uncertain and these charts focus on FY2001-FY2017.
Accordingly, the charts in this section summarize CRS reporting on total DoD/State/USAID OCO costs to date. They illustrate two reporting problems:
The Cost of the U.S. War Effort as Reported by DoD for Total Overseas Contingency Operations (OCO) in FY2001-FY2018
The charts and tables in this section focus on total DoD spending by year, and OCO expenditure by war.
The Cost in U.S. Casualties: FY2001-2018
The human cost of war is perhaps the most critical single metric of warfighting. One key element of any effective effort to cost a war should be to assess its casualties.
Failing to address casualties does not defuse the issues they raise or the reality that they too are a cost of war.
Shifting Levels of Military Personnel and Contractors in the Wars in Afghanistan, Iraq, and Syria: FY2001-2018
Total personnel are another key measure of the cost of war, particularly when high-cost all-volunteer forces are involved, and casualties are a key political consideration. The charts and tables in this section raise several key points about the need for better reporting on manpower:
Funding Civil and Civil-Military Operations
The State Department and USAID provide virtually no meaningful explanation of their strategy for either war, do not explain the challenges they face in meaningful terms, and do not link their budget justification to any clear explanation of a civil-military program.
The DoD semi-annual report now focuses almost exclusively on military activity, and there is no State/USAID counterpart. The United States however, is fighting what are civil-military wars where the “hold,” “stability,” and “recovery and development” effort is critical to winning popular support.
The data for FY2018 show that the civil effort is being slashed without any explanation or justification of the cuts—particularly in key areas like economic growth—where poverty is now steadily increasing and both sets of populations face major humanitarian crises—and in governance, where all of the host country governments are ranked as some of the most corrupt and incapable governments in the world and a lack of popular support is a key issue.
Here, simply seeing OCO spending data is essentially useless. Reporting adds up to half a budget at best.
The War in Afghanistan: “Decisive Force?”
This section supplements the OCO cost data with some brief metrics on the overall size of the U.S. effort in Afghanistan.
It also presents some key metrics developed by SIGAR on the annual and cumulative costs of U.S. aid efforts in Afghanistan. They make a striking contrast to the total OCO costs.
Key metrics are provided for the U.S. use of airpower, showing a major rise in support of Afghan forces in CY2017. These types of metrics provide a tangible picture of what U.S. OCO spending actually buys.
Key metrics are also provided on the funding profiles of key types of aid.
Metrics showing allied funding and aid activity help put the U.S. spending effort in the proper perspective.
Once again, the data on contractors provide a key picture of the actual size of the U.S. effort in country.
The War in Syria and Iraq: “Decisive Force?”
This section supplements the OCO cost data with some brief metrics on the overall size of the U.S. effort in Syria.
The termination of SIGIR after U.S. combat forces initially left Iraq in 2011 has meant that there is now no official regular public reporting on this war.
The Department of Defense has, however, provided a supplement to the FY2018 budget request that does provide many useful insights, and the only integrated discussion of civil-military issues in the FY2018 budget submission.
The Department of Defense also provides a range of other metrics on U.S. activities, and a costing of air support activity, although these are not linked to the budget.
Homeland Defense: The Other War Costs
Homeland defense has become more expensive than any ongoing U.S. war or active combat effort.
Official data only exist on federal homeland defense efforts, not state and local ones.
OMB does not report total costs of homeland defense for all departments in the FY2018 budget request for unexplained reasons.
The cost for DHS alone was:
Any full costing of America’s wars needs to include these costs.