October 20, 2005
Paying For Their Mistakes
This commentary first appeared at the TomPaine.CommonSense website at www.tompaine.com on Oct. 20, 2005.
As the Fitzgerald inquiry into the events surrounding the march to war winds down, the economic impact of America’s adventure in Iraq is just becoming clear. New investigations of federal spending for the “global war against terror” paint an ugly picture of the Pentagon’s management of taxpayer dollars. But the sad conclusion is that rather than addressing the Pentagon’s negligence, Capitol Hill is compounding it.
Three new studies have emerged that paint the grim fiscal picture. That’s one each from the Congressional Research Service (CRS), the Congressional Budget Office (CBO), and the Government Accountability Office (GAO)—all of which are agents of Congress.
Between the terror attacks on Sept. 11 and October 2005, Congress has appropriated $357 billion for the fighting in Iraq and Afghanistan and for enhanced security at U.S. military bases and embassies abroad, according to CRS. Of this, the Department of Defense received $326 billion, and $31 billion went to the Department of State and others. So far, $251 billion has been spent in Iraq, and $82 billion has been spent in Afghanistan. Compared to 2004, average monthly spending for Iraq has increased by 18 percent to $6 billion. The CBO reports that if the wars go well and we are able to ramp down operations gradually starting next year, an additional $260 billion will be needed for operations until 2010. Grand total: $617 billion.
The costs, while large, are not the most important news. According to the GAO, the Department of Defense has “lost visibility” over $7.1 billion of the war money appropriated to it by Congress. That means it’s gone, but Pentagon managers don’t know what they did with it. Worse, the GAO also found DoD is so inept at tracking all of its spending that neither DoD nor Congress “can reliably know how much the war is costing…[or] how appropriated funds are being spent….” The GAO was not even able to determine whether the costs that it and the other agencies cite as reasonable estimates are too high or too low.
It also seems that DoD has been underestimating its annual war expenses, and when it needs more money in the middle of the fiscal year, it raids its own peacetime spending accounts to make up the difference. The precise total of these raids is unknown, but GAO and CRS estimate it at somewhere between $7 billion and $14 billion.
Finally, before the war started in Iraq—indeed, before President George W. Bush said he had decided to go to war and before Congress authorized it—DoD used $2.5 billion appropriated for Afghanistan in 2001 and 2002 to instead prepare for the invasion of Iraq.
There will likely be howls of protest from many in Congress, both Democrats and Republicans. Their actions, however, will keep a safe distance from their rhetoric. In truth, both parties are just fine with the Pentagon’s financial mismanagement. Their actions prove it.
The Department of Defense Appropriations Act passed by the Senate on Oct. 7, 2005—by a bipartisan vote of 97 to 0—was loaded with budget gimmicks. For example, the Republican chairman of the Senate’s defense appropriations subcommittee, Sen. Ted Stevens of Alaska, and the ranking Democrat, Sen. Daniel Inouye of Hawaii, both advertised the bill as a $936 million reduction from spending last year. However, an accounting by CBO found the bill is actually a $9.5 billion increase. It seems the senators conveniently forgot to include a $10.7 billion tab they must pay for the future costs of health care for military retirees. Legislation they claimed was smaller than last year’s is actually much larger.
Another budget dodge was to move heaps of peacetime defense expenditures into a special $50 billion account of “emergency” spending intended to pay for the first six months of the war in 2006. This reduced the total for the portion of the bill covering regular annual spending, but it padded the war fighting account with much that did not belong there. As a result, Republicans and Democrats claimed they reduced the president’s request for regular, peacetime defense spending by a seemingly impressive $7 billion, while in truth they stuffed the war fighting account with non-war extras.
In short, Congress advanced beyond mere incompetence to active deception, for example by claiming a bigger bill is actually smaller. This sets precisely the wrong example and wins the race to the bottom when it comes to managing the defense budget.
The Pentagon’s incompetence—and worse, Congress'—has many consequences; and it’s not just that taxpayer dollars are being misspent. Under the guise of frugality, spending is ramped up, and shadowy recipients of the increases are shrouded in the patriotic flag of spending for the war. Even when money is intended to support the troops in the fighting in Iraq and Afghanistan, no one in the federal government can assure us the money is spent as planned. No one can even tell us how much has been spent. Worst of all, Congress—the institution charged in our Constitution with ensuring accountability—is busying itself making the problems worse.
Tags: Financial Management
Director, Straus Military Reform Project, CDI at POGO, POGO
Mr. Wheeler's areas of expertise include Congress, the Defense Budget, National Security, Pentagon Reform and Weapons Systems
The goal of the Straus Military Reform Project is to secure far more effective military forces and much more ethical and professional military and civilian leadership at significantly lower budget levels.
We would like to thank Philip A. Straus Jr. and family for their generous support.