This article has been updated for clarification of war cost estimates.
And the government will still be paying for war veterans' health-care costs for at least another half century.
Direct U.S. spending on the war in Afghanistan will rise to approximately $840.7 billion if the president’s fiscal year 2018 budget is approved, according to Anthony Cordesman, a military strategy expert at the Center for Strategic and International Studies. That includes the total cost estimated by the Congressional Research Service for the 2001 to 2014 fiscal years, and money from the Defense Department’s overseas contingency budgets for the fiscal years 2015 to 2018.
The cost of the war also includes State Department spending and massive obligations for veterans’ medical and disability costs. And veterans are filing claims in greater numbers and for more serious injuries than in past wars.
To meet those needs, the Department of Veterans Affairs has more than doubled the size of its staff to 350,000 employees since 2001. And its budget has swelled to more than $185 billion a year, up from about $60 billion in 2001, according to Linda J. Bilmes, a faculty member at Harvard’s John F. Kennedy School of Government.
This is in addition to about $212.6 billion in direct spending to care for war veterans since 2001, when terrorists’ attacks on the World Trade Center towers and the Pentagon triggered U.S. military campaigns in Iraq and Afghanistan. That figure is an estimate by Neta C. Crawford, a political-science professor at Boston University and co-director of the Costs of War project at Brown University.
And that, in turn, is a fraction of the eventual cost of disability and health-care payments as those same veterans get older.
“Historically, the bill for these costs has come due many decades later,” Bilmes said. “The peak year for paying disability compensation to World War I veterans was in 1969 – more than 50 years after Armistice.” Bilmes, who co-authored a book about Iraq called “The Three Trillion Dollar War” with economist Joseph Stiglitz, said that if the Department of Veterans Affairs were run like a business, this money would be booked as deferred compensation and would show up on the government's balance sheet.
Bilmes and Cordesman agree that the costs of the wars are 20 times or more larger than initial estimates by members of the George W. Bush administration. But they caution that coming up with war costs is an inexact science.
Cordesman noted that the overseas contingency budgets are “padded” and “deliberately obfuscated” to make it easier to win congressional approval for certain spending items that are not, in fact, linked to war costs. He said that could account for a substantial amount of the contingency budget, and that the Afghan war costs include some overhead costs from other conflicts. Bilmes noted that the Defense Department’s regular budget has also ballooned, using the threats from abroad to justify bolstering the military baseline. She said that the Pentagon’s baseline budget had climbed a total of $1 trillion since 2001. Cordesman complained that there is “no federal report that breaks down real world costs.”
The costs of war have been controversial ever since the Bush administration launched its military campaigns on the Taliban and Saddam Hussein. In September 2002, Lawrence Lindsey, then Bush’s chief economic adviser, said that the “upper bound” of the cost of war against Iraq would be $100 billion to $200 billion. Other administration members attacked his estimate as being too high, and then-White House budget director Mitch Daniels said the figure would be between $50 billion and $60 billion.
Estimates of the cost of both wars combined by Crawford and the Watson Institute put the price tag so far at $4.8 trillion by fiscal years 2017 and 2016, respectively.
The cost of war has also imposed economic costs on the United States. While much of the spending has gone to domestic health-care providers and defense contractors, much of the war spending has been wasted or destroyed on the battlefield without improving U.S. productivity or making consumer goods. The U.S. Agency for International Development has also spent tens of billions of dollars on projects in Afghanistan, many of which have failed.
One example of waste: A $6 million Pentagon project to send nine rare Italian goats to breed with those native to Afghanistan, hoping that this would improve the animals’ undercoats and the quality of the cashmere they yield.
In addition, war costs have been largely financed by borrowing, adding interest costs to the federal budget.
The Obama administration requested more than $44 billion for fiscal year 2017 for the Afghanistan war, a number that will likely increase with the U.S. troop presence that Trump is expected to boost by about 4,000.
Bilmes and Cordesman noted that the per-troop cost of maintaining an active duty soldier is high, more than $4 million per person versus a figure closer to $1 million in 2001. But Cordesman cautioned that much of the cost is overhead and adding 4,000 additional troops might raise the Afghan war costs by about $2 billion to $4 billion a year if they use existing infrastructure used in earlier fighting.
“The unit costs per man is extremely high but that’s because you have large and expensive bases and very few people,” he said. “Putting more people in doesn’t raise costs by the percentages you’d expect.”
Bilmes lamented that Trump’s desire to cut State Department spending would undercut some of the initiatives the president mentioned in his speech to the nation Monday night.
“The crazy budgetary dissonance in the president’s plan is that he is trying to cut the State Department budget by at least 20 percent at same time he is laying out a plan that calls for extremely delicate diplomatic negotiations with Pakistan, India and NATO,” she said. “How is that achievable? That just doesn’t add up.”