Bush administration gets criticism for lack of cost estimates

Saturday, November 1, 2003

Months before the U.S.-led war in Iraq, independent and congressional analysts made remarkably accurate predictions of the costs of a post-war occupation, even as the Pentagon refused to do so, or gave very low estimates.

The discrepancy is gaining new attention with lawmakers complaining of the costs as they approve the president's request for $87 billion to occupy and rebuild Iraq.

The Senate planned to give final approval to the legislation Monday. The House approved the bill early Friday morning by 298-121, blessing a package whose outlines followed the plan Bush proposed on Sept. 7.

The measure, mostly for the budget year that will run through next Sept. 30, is dominated by $64.7 billion for expenses of the U.S. military. That includes about $51 billion in Iraq, $10 billion in Afghanistan and $2 billion at home, plus funds for Jordan, Pakistan and other U.S. allies.

The bill also has $18.6 billion to rebuild Iraq's economy and government, $1.2 billion for reconstruction projects in Afghanistan and $500 million to replenish federal accounts for responding to California's wildfires, Hurricane Isabel and other disasters.

"We were all hit with sticker shock: $87 billion is a huge number," said Rep. Zack Wamp, R-Tenn., during House debate Thursday night. "I'm going to grit my teeth and vote yes tonight and say that we cannot afford to fail in Iraq."

Bush administration officials repeatedly insisted before the war that they could not estimate how much the war or the postwar occupation might cost.

But the Congressional Budget Office, for example, estimated in September 2002 that occupying Iraq would cost between $1 billion and $4 billion a month.

The current figure? About $4 billion a month.

Taken by surprise

"The American people were taken by surprise by the administration's budget request, because there was not enough lead-up to explain how much of a sacrifice would be needed," said Bathsheba Crocker, a former State Department budget adviser now at the Center for Strategic and International Studies, an independent Washington think tank.

The administration's aversion to cost estimates was intertwined with Pentagon officials' reluctance to estimate how many troops would be needed to occupy Iraq.

Before the war, Defense Secretary Donald H. Rumsfeld and other Pentagon officials disputed a prediction by then-Army Chief of Staff Gen. Eric Shinseki that more than 200,000 troops would be needed. Deputy Defense Secretary Paul Wolfowitz called Shinseki's estimate "wildly off the mark."

The occupation now occupies some 132,000 American troops, supported by 22,000 troops from other nations and more than 90,000 Iraqi security forces -- more than 244,000 people under arms. The money to pay for both the U.S. troops and the Iraqi forces comes almost exclusively from the United States.

"The problem is, the administration didn't ever publicly come up with how many troops they thought would be there, or how long they would be there," said Steven Kosiak, an analyst with the nonpartisan Center for Strategic and Budgetary Assessments. "It's not that difficult to estimate what the costs will be if you have some idea of the numbers of troops."

On Friday, the Congressional Budget Office released a report estimating the total cost to occupy Iraq from 2004 through 2013 at between $85 billion and $200 billion, depending on how many American soldiers are needed and how soon they can leave Iraq.

Rumsfeld defended the Pentagon's pre-war vagueness at a news conference earlier this month.

"We were criticized for not giving answers because we didn't know the answer," Rumsfeld said.

"There are so many variables involved that people with good judgment don't try to say, 'I'm smart enough to take all those variables and make an appropriate estimate and come out with a single-plan answer.' So I haven't done that."

Former White House economic adviser Larry Lindsey also came under fire last year when he estimated a war with Iraq could cost between $100 billion and $200 billion. Mitch Daniels, then Bush's budget chief, discounted the estimate as "very, very high," and the issue was cited as one of the reasons why Lindsey resigned in December.

Lindsey's estimate has proven to be on the mark, with the two funding bills, mostly for Iraq, that Bush proposed this year totaling more than $160 billion.

Other guesses by Bush administration officials have been well off the mark.

Wolfowitz told a House panel in March that Iraqi oil revenues could be between $50 billion and $100 billion in the next two years.

"We're dealing with a country that can really finance its own reconstruction, and relatively soon," Wolfowitz said in testimony March 27, a little more than a week after the war started.

Current Pentagon estimates say that Iraq's oil revenue will be about $12 billion to $15 billion next year and around $19 billion in 2005 -- a fraction of Wolfowitz' pre-war boast.

Administration officials have pointed to Iraq's billions in international debt as a reason to reject congressional moves to make some of the Iraq reconstruction funding a loan. Iraq doesn't have the money to finance its own reconstruction, Pentagon finance chief Dov Zakheim said this week.

The Congressional Budget Office projections, released about six months before Wolfowitz' statement, said Iraq could produce enough oil to generate about $3 billion a year for reconstruction. Using current oil prices of about $27 a barrel and the CBO's estimate that 400,000 barrels a day of Iraqi production could be used to finance reconstruction, Iraq would have about $3.9 billion extra for reconstruction -- in line with the Pentagon's current estimates.

Democrats have assailed Wolfowitz for his prewar comment. "Talk about a rosy scenario," said Sen. Carl Levin, D-Mich., the top Democrat on the Senate Armed Services Committee, when Wolfowitz addressed the panel in September. Wolfowitz did not address the criticism.

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