War with Baghdad to cost $200bn

Published October 12, 2002

WASHINGTON: As Congress authorized a possible war against Iraq, it’s blank-check time for US taxpayers.

No one knows exactly how much it would cost to wage war against Iraq because President Bush has not said what kind of military attack he envisions, should he decide one is necessary.

But Bush’s top economic adviser has said it could cost as much as $200 billion, a significant drain on a federal budget already swimming in red ink.

The Congressional Budget Office, while declining to predict an overall figure, estimates that combat could cost as much as $9 billion a month — a figure that dwarfs current fiscal concerns. The entire US budget for the 2003 fiscal year is stalled in Congress over a $9 billion difference between Bush and congressional Democrats.

Lawmakers generally view the decision to go to war as a moral and strategic choice, not one that hinges on economic or budget policy. But they are still asking questions about what financial impact to expect — and those questions have been left largely unanswered during the congressional debate on Bush’s push to confront Iraqi President Saddam Hussein.

Rep. John M. Spratt Jr., D-S.C., said on Wednesday it was appropriate for fiscal concerns to be “conspicuously absent” from House debate. But he also urged lawmakers to recognize the pressures a war would put on a federal budget that is already projected to run $452 billion in deficits over the next four years.

One factor could ensure that the price tag for attacking Iraq would be greater for the United States than in the 1991 Persian Gulf War.

That conflict cost about $61 billion, but other countries in the international coalition put together by the United States contributed $48 billion. It is uncertain that, in a new fight with Iraq, Bush would be able to assemble such a broad coalition of allies and potential partners in sharing the cost of combat and postwar reconstruction.

On the other hand, war spending could simply add to the deficit, if Congress refuses to choose between guns and butter and instead finances both. That could rile fiscal conservatives such as Mitchell E. Daniels Jr., Bush’s budget director, who said on Wednesday an armed conflict with Iraq “should not leave a residue of bigger government and higher taxes, as many wars have.”

Daniels estimated that the cost of responding to the Sept 11 terrorist attacks added $80 billion in federal spending. He said he had no idea what a possible war with Iraq would add to government spending.

That is in part because Bush says he has not yet decided whether to launch a military strike.

Lawrence Lindsey, Bush’s chief economic adviser, estimated that a war with Iraq would cost from one to two per cent of the GDP — which translates into $100 billion to $200 billion.

The most detailed effort to estimate war costs has come from the CBO, which projected $6 billion to $9 billion a month in combat expenses, depending on the nature of the warfare. In addition, the CBO estimated it would cost:

— As much as $13 billion to deploy US forces to the Persian Gulf region.

— As much as $7 billion to return US troops to their home bases after the war. — As much as $4 billion a month for occupation of postwar Iraq.

The estimates did not include potential costs of humanitarian assistance and postwar rebuilding of Iraq, which could be considerable.

The CBO also did not try to calculate potential casualties or the cost of responding if Iraq were to use chemical or biological weapons.—Dawn/The Los Angeles Times News Service.

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