Report: War-related costs will exceed $500 billion next year

The overall cost of the wars in Iraq and Afghanistan and other global anti-terror operations since the Sept. 11, 2001, attacks will top $500 billion next year, according to congressional estimates and expectations of future funding.

The nonpartisan Congressional Research Service said in a report that through the current fiscal year ending Sept. 30, the government will have spent $437 billion on overseas military and foreign aid funding. That includes the latest supplemental spending bill signed into law this month, which provided $69 billion for the war effort.

Add in roughly $1.5 billion in fiscal 2007 Foreign Operations funds for Iraq and Afghanistan; $50 billion in Pentagon "bridge" funds for the first half of fiscal 2007, plus as-yet-undetermined supplemental funds for the remainder of the next fiscal year, and total war-related costs will easily soar over $500 billion one year from now.

At least $37 billion or so will have gone to the State Department and the U.S. Agency for International Development for Iraq and Afghanistan reconstruction, embassy operations and other foreign aid programs. War costs alone are expected to be at least $450 billion, not including the expected supplemental request early next year.

Even assuming an eventual troop drawdown to 74,000 by fiscal 2010, war costs between fiscal 2007 and fiscal 2016 could total another $371 billion, the report said. Adding that to the $437 billion appropriated through the end of this fiscal year, total costs would reach $808 billion by fiscal 2016.

The overall costs for the military operations have risen sharply since the Sept. 11, 2001, attacks, according to the report. In fiscal 2006, Congress will appropriate about $115.8 billion to the military -- a 72 percent increase since fiscal 2004, CRS said.

The monthly "burn rate" of spending in Iraq and Afghanistan is expected to average $9.7 billion in fiscal 2006, an 18 percent jump from last year alone. That includes the monthly costs of military operations, as well as other related spending like intelligence, equipment investment and training and outfitting of Iraqi and Afghan police and security forces.

Congressional analysts are a bit mystified at the rapidly escalating costs. Most of the increases are due to operations and maintenance costs, which have jumped from $42.7 billion in fiscal 2004 to $60.9 billion in fiscal 2006, and a threefold increase in procurement funds, to $24.4 billion in fiscal 2006 from $7.2 billion, CRS said.

They said some of the operational increase is due to expected factors, such as fuel price hikes, body armor purchases, and training of Iraqi and Afghan security forces. "These factors, however, are not enough to explain a 50 percent increase of over $20 billion in operating costs," the report states.

Likewise, while increases were expected for force-protection equipment like armored humvees and night-vision goggles, as well as to replace damaged equipment, "These reasons are not sufficient, however, to explain the level of increases or predict whether these procurement levels are temporary or likely to rise still further," CRS argues.