But for more than a decade now, we’ve waged war as if it were free, keeping our wars off the budget and, rather than paying for them as they were fought, slapping them on the national credit card. Paying as you go, after all, is hard. It forces you to make decisions about competing priorities. When you don’t pay up front, those decisions become easy. And war should never be easy.
But before we can start paying for war, we need to account for it properly. You might recall Lawrence Lindsey, director of President George W. Bush’s National Economics Council, being taken to the woodshed for estimating the costs of the Iraq War at $200 billion, when the administration was trying to sell the invasion as a $50 billion venture. Both numbers were tossed around like they were price tags for the entire war. They weren’t. They were estimates of its first six months. That’s one way we lowball the costs of war: estimating them only a few months at a time. The Congressional Budget Office now says the tally is likely to total $1 trillion.
Even that estimate, however, is far, far too low. It primarily counts “direct costs” — what will be spent on soldiers, supply chains and weaponry over the course of the war. But what about the long-term care for veterans who return with brain injuries or mangled limbs? Or the expense of replacing the equipment that is destroyed or worn down in combat? What about the costs to the broader economy when the price of oil soars?
A few years ago, Harvard budget expert Linda Bilmes and Nobel Prize-winning economist Joseph Stiglitz set out to construct a more holistic estimate of the costs of the Iraq War. They ended up nearer to $3 trillion, and they were trying to be conservative. For those playing along at home, that’s about equal to every dollar of debt Bush piled up in his eight years as president.
Honest budgeting serves a purpose beyond making sure revenue matches spending. “My Nobel Prize was in the economics of information,” Stiglitz said in a 2008 speech presenting these findings. “Information affects decisions.” The debate leading up to these exchanges can be hot, emotional and polarizing. The numbers on the page — and the trade-offs they demand — are as close to rational as the political process can get. That’s the point of them. By forcing us to make the tough decisions, they help us make good decisions.
Gordon Adams, a senior White House budget official for national security from 1993 to 1997, points out that historically the practice of paying for war through off-budget legislation called “emergency supplementals” was governed by a few clear standards. They had to be modest, unanticipated expenditures for conflicts that were not expected to run long. The Bush administration turned them into massive, predictable expenditures serving two of the longest-running wars in American history — and didn’t even allow them to distract us from tax cuts.
The Obama administration has improved the process some, mostly by asking for war funding when the budget is submitted (although the funding itself is still classified as “emergency” spending, and so is not actually ruled by the budget process), including some funding in the budget and more tightly defining what can go into the emergency packages so they don’t simply become budgeting by other means for the Pentagon. But the wars are still charged to the credit card and the Pentagon is still protected from trade-offs.
Even some within the armed forces worry about the Defense Department getting used to this system. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, gave an unusually frank news conference in January. “The budget has basically doubled in the last decade,” he said. “And my own experience here is that in doubling, we’ve lost our ability to prioritize, to make hard decisions, to do tough analysis, to make trades.”
By its very nature, war poses difficulties for the budget process. For one thing, its costs are at least partly economic, but its benefits often are not. The fact that saving the lives of thousands of Libyans won’t reduce the deficit doesn’t mean it’s not a good thing to do. Moreover, budgeting is about planning, and war is hard to plan for. It often starts unexpectedly, and it frequently ends unpredictably. We don’t know how long a war will last, or if it is known, we might not want that information public. But difficult is not the same as unnecessary.
“The whole point of budgeting is to provide transparency,” Bilmes says. “It’s the place where we see where our real priorities are.” By refusing to budget for war, our leaders aren’t saying that the safety and security of the United States is our top priority. They’re saying that they’re worried the conflict really isn’t our top priority and that if asked to pay for it, the American people would think other budget priorities more pressing. But those are choices we need to make. Because we spent trillions of dollars in Iraq, it couldn’t be spent on better ways to improve the strength and security of the United States. Refusing to make choices when it comes to war is, in itself, making a choice — and not a wise one.
Two simple reforms to the process would go a long way toward giving the American people — not to mention Congress — the information necessary to make wise decisions about war. First, cost projections should be required for a range of scenarios — not just optimistic estimates of a quick war with no casualties, but pessimistic estimates of a long war requiring a grinding occupation.
Second, war has to cost money while it’s being fought. The way we decide whether something is worth it is to test whether we’re willing to pay for it. If a war is not worth a tax, or spending cuts, then perhaps it is not worth doing at all. It’s understandable that the administration might need to act before offsets can be found, but only for the early days of a conflict. After that, it should have the money in hand.