THE COST OF WAR
March 25, 2003

President Bush asked Congress Tuesday for $74.7 billion in emergency spending to fund the war in Iraq. Kwame Holman reports on the proposed war budget, and Margaret Warner follows up with some perspective from Norman Ornstein, a scholar at the American Enterprise Institute. (Background report) (Follow-up discussion)

 

Online Special Reports: Economic impact of the Sept. 11 attacks The Iraq War March 10, 2003: Economists debate the impact of the war on the economy. March 5, 2003: Economists debate the cost of a war with Iraq Feb. 6, 2003: Wall Street responds to the possibility of war with Iraq. Feb. 3, 2003: Experts discuss President Bush's proposed budget plan. Jan. 29, 2003: Lawmakers discuss President Bush's proposed tax cut plan.   News for Students: The Iraq War     New York Stock Exchange The White House The Conference Board	KWAME HOLMAN: Today at the Pentagon, President Bush, flanked by top military officials, made the announcement. PRESIDENT GEORGE W. BUSH: Today I'm sending the Congress a wartime supplemental appropriations request of $74.7 billion to fund needs directly arising from the Iraqi conflict and our global war against terror. KWAME HOLMAN: The president's request includes $63 billion for executing the war, including transport of forces to the region and maintenance of equipment; $8 billion for relief efforts and reconstruction in Iraq-- $5 billion of that amount would be aid to countries affected by the war, such as Pakistan, Israel, Jordan, and Turkey. Finally, the package includes $4 billion for homeland defense. PRESIDENT GEORGE W. BUSH: Yesterday I informed the leaders of Congress of these spending requests. The situation in any war is fluid. I reminded them of that fact. And so I'm asking Congress for flexibility in how these funds can be allocated. KWAME HOLMAN: For weeks, congressional Democrats had criticized the administration for withholding the true costs of the war. After being briefed by the president yesterday, West Virginia Senator Robert Byrd said the American people should know $75 billion is only the beginning. SENATOR ROBERT BYRD: This is the down payment. There's more to come, and we've got to level with the American people. We need to let the American people know up front as much as we can what the costs are expected to be. KWAME HOLMAN: And today, Defense Secretary Rumsfeld reiterated it still is impossible to say how much the war ultimately will cost. SECRETARY DONALD RUMSFELD: I noticed today everyone was saying, "Oh, my goodness." They did know what the war's going to cost, and I have said repeatedly we don't know what the war's going to cost, and the truth is we don't know what the war's going to cost. You can't know it. It's not knowable. The budget figure the president announced up there is not the cost of the war. KWAME HOLMAN: President Bush wants Congress to approve his war funding request by April 11. And this afternoon, with the early war cost figures now in hand, the Senate voted to reduce the size of the president's proposed tax cut by half, to $350 billion.
	Assessing the president's proposal
	JIM LEHRER: Margaret Warner has more. MARGARET WARNER: What are the assumptions behind, and the prospects for, the president's request? For that, we turn to longtime budget and Congress-watcher Norm Ornstein of the American Enterprise Institute. Norm, let's start with the assumptions underlying this. What does this request say about what the Pentagon expects will be the duration of this war and particularly of the intense conflict phase that we're in right now? NORMAN ORNSTEIN: Well, this is a supplemental appropriation, Margaret, for the remainder of this fiscal year. It ends October 1, so this is for six months. Now, there's a lot... there's been a lot of talk around the city the last day or so that this reflected one month of very intense conflict, and then another five months in which we basically would have money for getting the troops in, taking the troops and equipment out, replenishing the bombs and the Cruise missiles and the like. Administration officials have refused to say that there's one month of intense conflict here. As we saw, Sec. Rumsfeld certainly didn't want to say that. But there's no question that this is, in fact, one installment and there will be more to come. MARGARET WARNER: You called it a supplemental. That's usually an emergency measure. How does it... why is it a supplemental? NORMAN ORNSTEIN: Well, it's a supplemental because we already have an appropriation in place for this current fiscal year. Now, this also happens to be budget season in Congress where they're looking ahead to the next year. This is presumably for expenditures now that will last until October and then we'll have to reconsider and, as we move along in this budget process, have money for something in the future.You could argue that this is an emergency, of course. In many respects it is. But certainly it is unanticipated funding. When they passed the appropriation for defense for the current fiscal year, which should have been done a long time ago, it was actually done relatively recently, we didn't know for sure we were going to have a war. Now this is an unexpected expenditure. MARGARET WARNER: In the breakdown, which we just laid out, under relief and reconstruction that overall category there's $2.5 billion for relief and reconstruction in Iraq and another billion for repair of the oil fields. How realistic is that? NORMAN ORNSTEIN: That's clearly just a very, very small share of what we know in the end and especially as we see a lot of the bombing taking place will be a massive amount required for reconstruction. And, of course, none of this anticipates a post-war Iraq role. What we also don't know at this point is how other states, other countries will be involved in this. Will we bring in the United Nations? Will we get other countries as we had in the first Iran-Iraq war... the first Iraq war in 1991 like Japan contribute money for reconstruction? These are questions that we really are not going to be able to resolve until the war is over, the dust and the sand settle, and we make some larger judgments, too, including the role of the Security Council of the United Nations and whether we want to invite Germany, France, Belgium and some of the other European countries who have been on the other side of this back in for a significant role in post war Iraq. MARGARET WARNER: Among the $5 billion or so that’s in here for aid to countries assisting the war effort the one that jumped out at me was the $1 billion for Turkey which can be leveraged into about $8 billion worth of loans. Jim just talked to Deputy Sec. Armitage about that. Given Turkey's refusal to let ground troops be based there, what do you think are the prospects for that getting through? NORMAN ORNSTEIN: There will be some controversy certainly about that. There's some resentment over the role that Turkey has played. Remember, we had originally talked about a package of $16 billion for Turkey when they assumed they would let our troops in. Let's remember that there's now a tremendous pressure on Congress to get this done quickly, to make sure that we're not doing anything that would jeopardize money getting to the troops to conduct the war effort. The congressional leaders have pledged to get this supplemental appropriation through Congress, enacted into law by their Easter recess. So there will be some controversy over this, much more over the funding for homeland security, $4 billion with Democrats wanting to increase that significantly. But in the end you're going to get an overwhelming vote in support of probably something very close to this package. MARGARET WARNER: By April 11 when the president wants? NORMAN ORNSTEIN: By April 11, almost certainly. There may be a few members of Congress who will vote against it. There is going to be a lot of carping that they sprung this figure on us after they had considered a lot of elements of the budget and the tax cut although as we've now seen they were able to reconsider. But in the end nobody is going to want hold up money for the troops in the war while it's ongoing.
	A projected deficit of perhaps $400 billion
	MARGARET WARNER: Well, in fact, as you said today the Senate, which just last Friday by a 2-1 measure had refused to take a big bite out of the president's tax cut, reversed course today and cut it by more than half. Is the connection as obvious as it looks? NORMAN ORNSTEIN: There's a connection there. There's no question. It's more than that. Last week when the Senate voted on this amendment to cut the tax cut from $724 billion to $350 billion, there were a number of people who voted against that amendment because they opposed any tax cut. After the amendment went down, then I think some of them reconsidered and decided that they'd rather go for half because the alternative might be having the full tax cut. But no question that that vote and the reason to reconsider it had as its impetus the $75 billion here, recognizing that it too is a floor, not a ceiling in costs on the war and it's made senators very nervous about those costs and of course what they now are projecting to be a deficit for this current fiscal year of perhaps $400 billion. MARGARET WARNER: Norm Ornstein, thanks a lot, as usual. NORMAN ORNSTEIN: Thanks, Margaret.

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