White House Cuts Estimate of Cost of War With Iraq
By ELISABETH BUMILLER
NYTimes, 31 Dec - WASHINGTON, Dec. 30 — The administration's top budget official estimated today that the cost of a war with Iraq could be in the range of $50 billion to $60 billion, a figure that is well below earlier estimates from White House officials.
In a telephone interview today, the official, Mitchell E. Daniels Jr., director of the Office of Management and Budget, also said there was likely to be a deficit in the fiscal 2004 budget, though he declined to specify how large it would be. The administration is scheduled to present its budget to Congress on Feb. 3.
Mr. Daniels would not provide specific costs for either a long or a short military campaign against Saddam Hussein. But he said that the administration was budgeting for both, and that earlier estimates of $100 billion to $200 billion in Iraq war costs by Lawrence B. Lindsey, Mr. Bush's former chief economic adviser, were too high.
Mr. Daniels cautioned that his budget projections did not mean a war with Iraq was imminent, and that it was impossible to know what any military campaign against Iraq would ultimately cost.
"This is nothing more than prudent contingency planning," Mr. Daniels said from his home in Indianapolis, where he was reviewing the fiscal 2004 budget at his kitchen table. "At this point there is no war."
Mr. Daniels's projections place the cost of an Iraq war in line with that of the 1991 Persian Gulf war, which cost more than $60 billion, or about $80 billion in current dollars. But the United States paid for only a small part of that conflict, with Saudi Arabia, Kuwait and Japan bearing the brunt of the costs.
This time, the gulf nations are less supportive of the United States and, diplomats say, Americans are likely to bear most of the cost of a war with Iraq.
Mr. Daniels declined to explain how budget officials had reached the $50 billion to $60 billion range for war costs, or why it was less in current dollars than the 43-day gulf war in 1991. He also declined to specify how much had been budgeted for munitions and troops.
"All of these are major costs," he said.
The driving expense for the military in any war would be the size of the American force and the length of the conflict. In the 1991 war, 550,000 American troops were based in Saudi Arabia, which picked up the cost of virtually all housing, fuel and food.
If President Bush orders an attack against Iraq, the American force would be half the size of that in the 1991 war. The Pentagon's war plans call for deploying as many as 250,000 military personnel, but the initial offensive should start with a much smaller number, with a sizable force in reserve.
The budget director's projections today served as a more politically palatable corrective to figures put forth by Mr. Lindsey in September, when he said that a war with Iraq might amount to 1 percent to 2 percent of the national gross domestic product, or $100 billion to $200 billion. Mr. Lindsey added that as a one-time cost for one year, the expenditure would be "nothing."
Mr. Lindsey was criticized inside and outside the administration for putting forth such a large number, which helped pave the way for his ouster earlier this month. He could not be reached for comment this evening. (Congressional Democrats have estimated that the cost would be $93 billion, not including the cost of peacekeeping and rebuilding efforts after a war.)
But today, Mr. Daniels sought to play down his former colleague's remarks. "That wasn't a budget estimate," he said. "It was more of a historical benchmark than any analysis of what a conflict today might entail."
Pentagon officials say the cost of munitions in a potential war with Iraq will not be materially more than the cost of munitions in the 1991 gulf war. The reason, they say, is that the military now uses more precision-guided bombs, which are far more accurate, so fewer are needed.
In 1991, about 10 percent of bombs and munitions were precision guided. In the conflict in Afghanistan, the share of precision weapons rose to about 60 percent.
Although precision-guided bombs cost more than conventional munitions, they are not always exorbitantly more expensive, at least by Pentagon standards. Many of the "smart" bombs used in Afghanistan, for example, were simply 2,000-pound unguided bombs with a $20,000 mechanism attached to the bomb's tail that allowed it to be steered to a target by satellite.
The major costs of an Iraq war, Pentagon officials say, will be those for dispatching tens of thousands of military personnel overseas, feeding and sheltering them, and maintaining equipment deployed to the gulf.
Mr. Daniels said that Mr. Bush had been kept apprised of the budget projections for a war with Iraq and that all preparations were still in the realm of the theoretical. "At this point," he said, "our position is that the president has made no decision."
The cost of any war with Iraq would not be part of the budget for the 2004 fiscal year that Mr. Daniels is reviewing. Rather, the money would have to be appropriated as emergency spending by Congress. The cost of a war would also not be part of a record $355 billion military spending measure approved by Congress this year.
Mr. Daniels declined to specify the amount of a likely deficit for fiscal 2004, but he described the tax cuts scheduled to take place that year as only a "minor factor" in the red ink. Critics of the administration's tax cut acknowledge that the costs of the tax cuts will grow to large numbers only in 2006.
He laid blame for the deficit on the sluggish economy and the slump on Wall Street and said there would be deficits without the administration's tax cuts. After four years of surpluses, the Bush administration announced a deficit of $159 billion for the fiscal year that ended on Sept. 30. It has projected a $109 billion deficit for the current fiscal year.
Mr. Daniels said today that the budget for the 2004 fiscal year is one of "moderate growth" and that he was not projecting any immediate return to a balanced budget.
"Last year was a year when we presented a lot of new spending," he said. "This year we've said we'll be looking at much lower growth. The big reasons for that are the flatness in revenue and the return of deficits, as well as the uncertainty in the potential expansion of the war on terror."