United States Budgetary Costs and Obligations of Post-9/11 ... · 1 United States Budgetary Costs...

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UnitedStatesBudgetaryCostsandObligationsofPost-9/11WarsthroughFY2020:$6.4Trillion

NetaC.Crawford1

November13,2019

Summary

Sincelate2001,theUnitedStateshasappropriatedandisobligatedtospendan

estimated$6.4TrillionthroughFiscalYear2020inbudgetarycostsrelatedtoandcausedbythepost-9/11wars—anestimated$5.4Trillioninappropriationsincurrentdollarsandanadditionalminimumof$1TrillionforUSobligationstocarefortheveteransofthesewarsthroughthenextseveraldecades.2

Themissionofthepost-9/11wars,asoriginallydefined,wastodefendtheUnited

StatesagainstfutureterroristthreatsfromalQaedaandaffiliatedorganizations.Since2001,thewarshaveexpandedfromthefightinginAfghanistan,towarsandsmalleroperationselsewhere,inmorethan80countries—becomingatruly“globalwaronterror.”Further,theDepartmentofHomelandSecuritywascreatedinparttocoordinatethedefenseofthehomelandagainstterroristattacks.

Thesewars,andthedomesticcounterterrormobilization,haveentailedsignificant

expenses,paidforbydeficitspending.Thus,eveniftheUnitedStateswithdrawscompletelyfromthemajorwarzonesbytheendofFY2020andhaltsitsotherGlobalWaronTerroroperations,inthePhilippinesandAfricaforexample,thetotalbudgetaryburdenofthepost-9/11warswillcontinuetoriseastheUSpaystheon-goingcostsofveterans’careandforinterestonborrowingtopayforthewars.Moreover,theincreasesinthePentagonbasebudgetassociatedwiththewarsarelikelytoremain,inflatingthemilitarybudgetoverthelongrun. 1NetaC.CrawfordisaProfessorandChairoftheDepartmentofPoliticalScienceatBostonUniversityandaco-directoroftheCostsofWarProjectatBrownUniversity’sWatsonInstituteandBostonUniversity’sPardeeCenter.2Allbudgetcostshereareincurrentdollarsandnumbersareroundedtothenearestbillionorhundredbillion.

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Overview

OneofthemajorpurposesoftheCostsofWarProjecthasbeentoclarifythetypesofbudgetarycostsoftheUSpost-9/11wars,howthatspendingisfunded,andthelong-termimplicationsofpastandcurrentspending.ThisestimateoftheUSbudgetarycostsofthepost-9/11warsisacomprehensiveaccountingintendedtoprovideasenseoftheconsequencesofthewarsforthefederalbudget.Sincethe9/11attacks,theDepartmentofDefenseappropriationsrelatedtotheGlobalWaronTerrorhavebeentreatedasemergencyappropriations,nowcalledOverseasContingencyOperations(OCO).3 Whenaccountingfortotalwarcosts,theDepartmentofDefenseandotherentitiesoftenpresentonlyOverseasContingencyOperationappropriations.

TheCostsofWarProjecttakesabroaderviewofwarexpensesbecausebudgetarycosts

ofthepost-9/11warsarenotconfinedtomilitaryspending.Table1summarizespost-9/11war-relatedcostsandthecategoriesofspending.NumbersandoccasionallycategoriesarerevisedintheCostsofWarestimateswhenbetterinformationbecomesavailable.Forexample,thisyear’sreportusesnewerinterestratedataincalculatingtheestimatedinterestonborrowingforOCOspending.Additionally,thisreportrevisestheestimateofincreasestothePentagonbasebudgetgivennewinformation,describedbelow,onpatternsofmilitaryspendingandtherelationsbetweentheOCObudgetandbasemilitaryspending.Further,theDepartmentofDefensebudgetforFY2020includednewcategories,denotingOCOspendingintendedforthebasemilitarybudget,reflectedinaseparatelineinTable1.

3SeeCongressionalBudgetOffice(CBO).(October2018).FundingforOverseasContingencyOperationsanditsImpactonDefenseSpendingCBOpublication54219.https://www.cbo.gov/system/files/2018-10/54219-oco_spending.pdf.

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Table1.SummaryofWarRelatedSpending,inBillionsofCurrentDollars,FY2001–FY2020Roundedtothenearest$billion.

$Billions

OverseasContingencyOperations(OCO)Appropriations DepartmentofDefense4 1,959StateDepartment/USAID5 131

EstimatedInterestonBorrowingforDODandStateDeptOCOSpending6 925War-relatedSpendingintheDODBaseBudget

EstimatedIncreasestoDODBaseBudgetDuetoPost-9-11Wars7 803“OCOforBase”anewcategoryofspendinginFY2019andFY20208 100

MedicalandDisabilityCareforPost-9/11Veterans9 437HomelandSecuritySpendingforPreventionandResponsetoTerrorism10 1,054TotalWarAppropriationsandWar-RelatedSpendingthroughFY2020 $5,409EstimatedFutureObligationsforVeteransMedicalandDisabilityFY2020–FY205911 >1,000TotalWar-RelatedSpendingthroughFY2020andObligationsforVeterans $6,409

4Included:AppropriationsforMajorOCOinAfPakandIraq/Syria;OCOforOperationPacificEagle-PhilippinesinFY2019;andFY2019-2020andOCOfor“EnduringRequirements.”Notincluded:FY2020OCO“emergency”spendingfortheSouthernborderoftheUSandnon-wardisasterrelief.Basedonpubliclyavailabledocuments.Sourcesinclude:AmyBelasco.(December2014).TheCostofIraq,Afghanistan,andOtherGlobalWaronTerrorOperationsSince9/11.CongressionalResearchService(CRS)https://fas.org/sgp/crs/natsec/RL33110.pdf;BrendanW.McGarryandEmilyMorgenstern.(Updated6September2019)OverseasContingencyOperationsFunding:BackgroundandStatus,CRS.https://fas.org/sgp/crs/natsec/R44519.pdf;OfficeoftheUndersecretaryofDefense(Comptroller).(March2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.6-8.https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2020/fy2020_Budget_Request_Overview_Book.pdf.5ForAfghanistan,Pakistan,IraqandSyria.Sourcesinclude:McGarryandMorgenstern,OverseasContingencyOperationsFunding:BackgroundandStatus,”andK.AlanKronstadt,andSusanB.Epstein,(2019,March12).DirectOvertU.S.AidAppropriationsforandMilitaryReimbursementstoPakistan,FY2002-FY2020.CRS,https://fas.org/sgp/crs/row/pakaid.pdf.6Source:CalculationsbyHeidiPeltier.Forthcoming.TheCostofDebt-financedWar:PublicDebtandRisingInterestforPost-9/11WarSpending,”CostsofWarProject.7Theseinclude:additionalexpensesthathaveincreasedthesizeofthe“base”budget,suchasspendingonOperationNobleEagleafter2004;theeffectsofpost-9/11warrelatedincreasedhealthcarecostsforactivedutysoldiers;andhigherpaytoattractandretainsoldiers.EstimatedasaportionoftheOCObudgetat50percentofOCOspendingfromFY2001–2006,40percentfromFY2007–2018,and25percentfromFY2019–2020.ThisestimateoftheinflationaryeffectsofmilitaryspendingwasrevisedontheunderstandingthattheDODsubsidizedthebasebudgetwithOCOmoneypriortoFY2018.Seethediscussionbelow.8InFY2019,theTrumpAdministrationintroducednewbudgetcategoriestoindicateOCOmoneyspentonbaserequirements.ThoseOCOappropriations“forbase”inFY2019andFY2020areincludedhere.9BasedonDepartmentofVeteransAffairsBudgets,FY2001-FY2020.AlthoughtheVAreportshealthcareforPost-9/11warveterans,DisabilityandCompensationarereportedforallGulfWarEraveterans.10BasedonDHSbudgetsasanalyzedbytheCRSandassumingthatspendingisconsistentsince2017.SeeWilliamL.Painter,8October2019,SelectedHomelandSecurityIssuesinthe116Congress,CRS.11BasedonLindaJ.Bilmes.(2016).ATrustFundforVeterans.Democracy:AJournalofIdeas,no.39.Retrievedfromhttp://democracyjournal.org/magazine/39/a-trust-fund-for-veterans/andLindaJ.Bilmes.(2013).TheFinancialLegacyofIraqandAfghanistan:HowWartimeSpendingDecisionsWillCancelOutthePeaceDividend.CostsofWar,http://watson.brown.edu/costsofwar/files/cow/imce/papers/2013/The%20Financial%20Legacy%20of%0Iraq%20and%20Afghanistan.pdf.

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TheNeedforaComprehensiveAccountingAsChristopherMannoftheCongressionalResearchServiceacknowledges,“No

government-widereportingconsistentlyaccountsforbothDODandnon-DODwarcosts.”Thisleavesaholeinourunderstandingofthetotalcostsofthepost-9/11warsthatallowsforconfusionandpartialaccountingthatcanbemistakenforanassessmentoftheentirebudgetarycostsandconsequencesofthesewars.Further,Manncorrectlynotesthat,“Asaconsequence,independentanalystshavecometodifferentconclusionsaboutthetotalamount.”Because“widelyvaryingestimatesriskmisleadingthepublicanddistractingfromcongressionalpriorities”Mannarguesthatthatacomprehensiveaccountingwouldbeuseful.“Congressmaywishtorequirefuturereportingonwarcoststhatconsolidatesinteragencydata(suchashealthcarecostsforcombatveteransorinternationalaidprograms)inastandardized,authoritativecollection.”12

TheCostsofWarProjecthas,since2011,providedastandardized,andperhapsmore

important,transparentandcomprehensibleaccountingforthecostsofthepost-9/11wars(theGlobalWaronTerror),usingcategoriesthatincludeU.S.budgetarydataacrossrelevantagencies,andestimatesoffutureveterans’careandtheinterestonborrowingtopayforthewars.

Thereareotherwaystoestimatethecostsofthepost-9/11wars.Forexample,theDOD

regularlyproducesatabulationofthe“EstimatedCosttoEachTaxpayerfortheWarsinAfghanistanandIraq.”InMarchofthisyear,theirmostrecentpublicestimateconcludedthatDepartmentofDefenseOCOspendingforthewarsinIraq,Syria,AfghanistanandPakistancostatotal$7,623pertaxpayerthroughFY2018.13

Whileitisusefultohaveaper-personfiguretoillustratetheburdenofwaron

taxpayers,thiswayofestimatingthecostpertaxpayersissomewhatmisleadingforseveralreasons.Inthepast,previouswarswerepaidforwithtaxincreasesorbysellingwarbonds,oracombinationofthesetwosourcesofrevenue.Inthecaseofthepost-9/11wars,specifictaxeswerenotraisedtofundtheseoperations.Nor,apartfromafewPatriotBondssoldintheearlyyearsofthewars,wasthereadrivetoselllargenumbersofwarbonds.Indeed,beforethe9/11attacks,theUSwasinbudgetsurplus.TheUSwentintodeficitspendingafterthe9/11attacks,thusincreasingtheFederalbudgetdeficitandthenationaldebt.Thispatternofwarspendingandborrowinghavecontinuedthroughoutthewars.

ThetotalhereincludesDODOverseasContingencyOperationsspending.Buttherecan

besomeconfusionaboutDODOCOspendingwhenthePentagon’scategorieschangeand 12ChristopherT.Mann,(18April2019).U.S.WarCosts,Casualties,andPersonnelLevelsSince9/11,CRS.https://fas.org/sgp/crs/natsec/IF11182.pdf.13TheDODcalculationincludesannualcostsinthewarzonesandthenumberoftaxpayerseachyear.DepartmentofDefenseComptroller.(March2019).EstimatedCosttoEachU.S.TaxpayerofEachoftheWarsinAfghanistan,IraqandSyria.https://comptroller.defense.gov/Portals/45/documents/Section1090Reports/Section_1090_FY17_NDAA_Cost_of_Wars_to_Per_Taxpayer-March_2019.pdf.

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becausetheDODhasnotconsistentlyusedtheCongressionalOCOappropriationsfortheirintendedpurpose.14

Theothercoststhataredirectlyrelatedtothewarsarefoundinotherbudgetsacross

thefederalgovernmentandareincludedinthisestimate.Specifically,asdiscussedbelow,OCOspendingandwarhavetendedtoinflateDOD“base”spendingandsotheprojectestimateswar-relatedadditionstothePentagonbasebudget.ThebasebudgetisintendedtofundenduringcostsoftheDepartmentofDefenseandthearmedservices,thatwouldbeincurredeveniftheUSwerenotatwar.Inaddition,theprojectcountsOCOspendingfortheStateDepartmentinthemajorwarzones.TheStateDepartmentwarrelatedappropriationsaredesignatedasOCObytheCongressandareverycloselylinkedtoDODspending.Thisreportalsoestimatesthehealthcarecostsforpost-9/11warveterans;counterterrorismrelatedHomelandSecurityfunding,andestimatedinterestondebtforborrowingtopayforthewarsthroughFY2020.15EveniftheUnitedStateshaltedspendingonthewarsinFY2021,itwouldberesponsibleforadditionalinterestonborrowingtopayforwarstodate.Unlesssomemechanismisputinplacetopaydownthedebt,thiswilladdseveraltrilliondollarsinadditionalinterestcoststothetotalcostsofwar.

Further,becausethecostsofthepost-9/11warswillcontinueafterthefightingceases,

andtohighlighttheobligationsincurredtotheveteransofthiswar,thisaccountingincludesanestimateofthecostsoftheobligationsfortheofpost-9/11warveteransfuturecare,throughFY2059.Thesefutureestimatedcostsforveterans’healthcareanddisabilitycompensationareprovisionalbecause,thoughthenumberofUStroopdeployedinthewarzonesiscurrentlywindingdown,deploymentsmaycontinueforseveralmoreyearsandmayfluctuateinsize.Thus,wedonotyetknowthetotalnumberofveteranswhowillbeusingthemedicalcareanddisabilitybenefitstheyareentitledtobecauseoftheirservice.16

Thus,DODspendingforOverseasContingencyOperationsisonlyaportionofthecostsofthesewars.DODspendingfortheOCOsislessthan40percentoftotalpost-9/11warrelatedspendingthroughFY2020.Figure1illustratespost-9/11warrelatedspendingbycategoriesthroughFY2020incurrentdollars—notincludingfuturecostsofmedicaland

14SeeAmyBelasco,(2014)TheCostofIraq,Afghanistan,andOtherGlobalWaronTerrorOperationsSince9/11andCBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending.15Numbersforsomespendingcategoriesareestimates.Somegovernmentdepartmentshavebecomelesstransparent.Estimatesforspendingwherethereisnocurrentdataarerootedinpastspendingbytherespectivedepartment.TheDepartmentofVeteransAffairsandtheDepartmentofHomelandSecurityhaveaggregatedsomeoftheirGlobalWaronTerror/post-9/11-relatedspendingsothatitismoredifficulttoisolatespecificwar-relatedspendingfromtheirlargerbudgets.16ThisandpreviousCostsofWarProjectestimateshavenevercountedeverybudgetaryexpenserelatedtothesewars.Forexample,therearesubstantialcostsofwartostateandlocalgovernmentsintheUSthatarenotsubsidizedbythefederalgovernment,mostsignificantly,perhaps,thecostsofcaringfortheveteransofthesewars.ThisreporthasalsonotcountedthevalueofthegiftsinexcessmilitaryequipmenttheUSmakestocountriesinandnearthewarzones.SeetheExcessDefenseArticles(EDA)Database,http://www.dsca.mil/programs/excess-defense-articles-edaandSecurityAssistanceMonitor,http://securityassistance.org/data/country/military/Excess%20Defense%20Articles/.

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disabilitycareforveteransandfutureinterestpaymentsonborrowingtopayforwarsthatmustbeincludedinanytruereckoningofthebudgetaryburdenofthepost-9/11wars.

Figure1.EstimateofGlobalWaronTerrorSpendingthroughFY2020inBillionsofCurrentDollarsandPercentages.

Onepotentialbarrierforcivilianstounderstandingthetotalscaleandcostsofthepost-9/11warsisthechangesinthenamingofthewars.TheUSmilitarydesignatesmainwarzonesinAfghanistan,Pakistan,Iraq,andSyriaasnamedoperations.Thelongestwarsofar,inAfghanistanandPakistan,hashadtwonames:OperationEnduringFreedom,designatedthefirstphaseofwarinAfghanistanfromOctober2001;itwasdesignatedOperationFreedom’sSentinelon1January2015.17ThewarinIraqwasdesignatedOperationIraqiFreedomfromMarch2003to31August2010,whenitbecameOperationNewDawn.WhentheUSbegantofightinSyriaandIraq,thewarwasdesignatedOperationInherentResolve.Foreaseofunderstanding,thecostsarenotlabeledherebytheirOCOdesignation,butbymajorwarzone—namelyAfghanistanandPakistan,andIraqandlaterIraqandSyria.

17Operationshavechangednameswhenthemissionhaschanged,suchaswhenthewarinAfghanistan,OperationEnduringFreedombecameOperationFreedom’sSentinel.Similarly,OperationIraqiFreedombecameOperationNewDawnin2011andbecameOperationInherentResolvein2014whenthewarexpandedtoSyria.

DOD War Spending (OCO), $1,959 B, 36%

DOD OCO for Base, $100 B, 2%

Estimated Increase in Base DOD Spending Due to War, $803 B, 15%State Department OCO, $131 B, 2%

GWOT related Homeland Security Missions, $1,054 B,

20%

Interest on Borrowing for DOD and State OCO through

FY2020, $925 B, 17%

Medical and Disability for Veterans through FY2020, $437 B, 8%

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Further,withintheselargeroperations,thereareactivitiesinothergeographicareasthatdirectlysupportorinsomecasesarefarfromthenamedoperation.Forexample,OperationEnduringFreedom,focusedonAfghanistanandPakistan,includedactionsinJordan,Sudan,Yemen,andseveralotherlocations.18Similarly,thecurrentOperationInherentResolveinIraqandSyriahasincludedmilitaryoperationsinBahrain,Cyprus,Egypt,Iraq,Israel,Jordan,Kuwait,Lebanon,Qatar,SaudiArabia,Syria,Turkey,andtheUnitedArabEmirates.

Theannualcostsofwarinthemajorwarzoneshavefluctuated,butare,ingeneral,

declining.TotalestimatedappropriationsfortheAfghanistanandPakistanwarbytheDODandStateDepartmentareabout$978billionfromFY2001throughFY2020.BeguninOctober2001,appropriationshavebeenonaverage,includingFY2020,nearly$49billioneachyear.TheappropriationsfortheIraqandSyriawarzonehave,onaverage,beenabout$44billioneachyear,withtotalappropriationsofabout$880billionfromFY2003throughFY2020.Figure2illustratestheOCOappropriationsforthemajorwarzones—AfghanistanandPakistanandIraqandIraqandSyria—fortheDODandtheStateDepartment.

Figure2.DODandStateDepartmentOCOAppropriationsfortheMajorWarZones,FY2001–FY2020inBillionsofCurrentDollars

ThereareotherOCOfundedoperations,includingintheUS,Europe,Africaandother

regions.ThesehaveincludedOperationNobleEagle(whichdefendstheUSairspaceandbases)fundedintheOCObudgetthroughFY2004andOperationPacificEagle–Philippines,bothofwhicharenowfundedinthebasebudget.IncludingallOCOdesignatedoperations 18Thecasualtiesforeachnamedoperationincludethoseotherlocations.See,DepartmentofDefenseCasualtyStatus,https://www.defense.gov/casualty.pdf.

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Billi

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Afghanistan and Pakistan Iraq and Syria

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bytheDefenseandStateDepartments,theGWOThasaveragedmorethan$100billioncurrentdollarseachyear.

FollowingtheEver-ChangingDOD,DHSandStateDepartmentGWOTBudgetsThetotalsinthisreportdifferfromtheDOD,CongressionalResearchService(CRS)and

otherreportsforseveralreasons.First,thisreportattemptstoincludealltherelevantmajorpost-9/11war-relatedspending.Insomeinstances,DOD,StateDepartmentandDepartmentofHomelandSecurityBudgetsareopaque.Indeed,becauseofrecentchangesinbudgetarylabelsandaccountingatDOD,DHS,andtheStateDepartment,understandingthecostsofthepost-9/11warsispotentiallyevenmoredifficultthaninthepast.Thissectionexplainsthebudgetsandthechoicesmadehereaboutwhattoincludeandhowtocountwarandwar-relatedspending.

StartingwiththeDepartmentofDefenseportionofwarspending,apartfromthe

changingnamesofthemajorOCOoperationsinAfghanistanandPakistanandIraqandSyria,someOCOoperationshavecomeinandoutoftheOCObudget.Forinstance,OperationPacificEagle–Philippineswasdesignatedanoverseascontingencyoperationin2017,andremovedfromtheOCObudgetinMay2019,inthemiddleofthefiscalyear,eventhoughtheoperationcontinued.

Further,assuggestedabove,themechanismofappropriationsforthewarshas

sometimesmadeitdifficulttodifferentiatewarandwar-relatedspending.OCOspendingisconsideredemergencyspending.EmergencyappropriationsfortheDODarenotsubjecttothesamedetailedCongressionaloversightandlimitsasregular,or“base”budgetnon-emergencyappropriations,forcoststhatendurewhetherornottheUSisatwar.The2011BudgetControlAct(BCA)setlimitsonbothdefenseandnondefensespending.Theselimitswereenforcedby“sequestration,”theautomaticreductionofenactedappropriationsinexcessofthelaw’sprescribedlevels.UndertheBudgetControlAct,spendingdesignatedasOCOisexemptfromthebasebudgetcapsandsequestration.

SomeOCOappropriatedmoneyhas,formorethanadecade,beenusedtosupplement

thebaseDODbudget.ThiswasnottheintentionofCongress.Afterthe2011BudgetControlAct,the DOD began to charge additional expenses to the OCO budget that should have been funded through the base budget appropriation process in part to get around the budget caps and sequestration. It appears that none of these transfers were explicitly requested by the DOD or authorized by Congress.

InFY2019,theTrumpAdministrationmadethepracticeofshiftingemergencyOCO

appropriationsintothebasebudgetovertwhenitintroducednewwaysofcategorizingtheDepartmentofDefensespendingrelatedtotheOverseasContingencyOperations.Someofthefundingthatwaspreviouslydesignatedforspecificmilitaryoperationshasnowbeenmovedintoacategorycalled“OCOforEnduringTheaterRequirementsandRelatedMissions”andanother,“OCOforBaseRequirements.”19The DoD’s FY2019 OCO for base 19TheDODComptrollerexplained:

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was $2.5 billion. The FY 2020 budget request included $97.5 billion in OCO funding for base budget requirements and $35.3 billion for “Enduring Theater Requirements and Related Missions. AnothernewDODOCOcategoryforFY2020is“EmergencyRequirements,”moneyintendedfortheSouthernUnitedStatesborderwallanddisasterreliefforrecenthurricanes.

Thus,inFY2020,onlyabout$25billionofthe$173.8billionOCOrequestwere

designatedasforOperationInherentResolveinIraqandSyrianandOperationFreedom’sSentinelinAfghanistan.In the FY2020 request, theDODComptrolleralsoappliedsomeofthesenewcategoriesretroactivelytopreviousOCOfunding—respectively$2,$8,$18,and$17billionforFiscalYears2015to2019.20

Again, these changes are specifically and explicitly intended to get around Congressionally

imposed limits on the base defense budget. The Department of Defense FY2020 request explicitly stated as much: “These base budget requirements are funded in the OCO budget due to limits on budget defense caps enacted in the Budget Control Act of 2011. As base budget funding at the Budget Control Act level is insufficient to execute the National Defense Strategy, additional resources are being requested in the OCO budget.”21 TheFY2020OCOforbaserequirementsrequestalso,accordingtotheComptroller’sreport“includeground, air, and ship operations, base support, maintenance, weapons system sustainment, munitions, and other readiness activities, which are needed to prepare warfighters for their next deployment. This

“TheFY2020OCOrequestisdividedintothreerequirementcategories–directwar,enduring,andOCOforbase.DirectWarRequirements($25.4billion)–Reflectscombatorcombatsupportcoststhatarenotexpectedtocontinueoncecombatoperationsendatmajorcontingencylocations.Includesin-countrywarsupportforOperationFREEDOM’SSENTINEL(OFS)inAfghanistanandOperationINHERENTRESOLVE(OIR)inIraqandSyria.FundspartnershipprogramssuchastheAfghanistanSecurityForcesFund(ASFF),theCounter-ISISTrainandEquipFund(CTEF),theCoalitionSupportFund(CSF),andMiddleEastbordersecurity.OCOforEnduringRequirements($41.3billion)–Reflectsenduringin-theaterandCONUScoststhatwillremainaftercombatoperationsend.Thesecosts,historicallyfundedinOCO,includeoverseasbasing,depotmaintenance,shipoperations,andweaponssystemsustainment.ItalsoincludestheEuropeanDeterrenceInitiative(EDI),theUkraineSecurityAssistanceInitiative(USAI),andSecurityCooperation.Combined,enduringrequirementsanddirectwarrequirementscomprise“traditional”OCO.OCOforBaseRequirements($97.9billion)–Reflectsfundingforbasebudgetrequirements,whichsupporttheNationalDefenseStrategy,suchasdefensereadiness,readinessenablers,andmunitions,financedintheOCObudgettocomplywiththebasebudgetdefensecapsincludedincurrentlaw.”

OfficeoftheUndersecretaryofDefense(Comptroller).(2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.6-2.

20OfficeoftheUndersecretaryofDefense(Comptroller).(2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.6-4.21OfficeoftheUndersecretaryofDefense(Comptroller).(2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.6-8.

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OCO request for base requirements includes additional resources for non-DoD activities, which are described in detail under separate (classified) cover.”22

TheCongressionalBudgetOfficeandtheCongressionalResearchServicehavelong

expressedconcernthatDODaccountingpracticesareopaqueandthatthedistinctionbetweenenduringandemergencyfundinghasnotbeenwellobserved.Prior to this change, the Congressional Budget Office (CBO) and the Congressional Research Service have regularly pointed out the use of OCO money to fund the activities that should be funded in the DOD base budget. In 2014, for instance Amy Belasco, in her Congressional Research Service report on the costs of the post-9/11 wars said: “Sincethe9/11attacks,someobservershavecriticizedwarfundingas‘off-budget’ora‘slushfund’appropriatedlargelyinemergencysupplementalactsorfor“OverseasContingencyOperations”(OCO)wherenormalbudgetlimitsinannualbudgetresolutionsortheBudgetControlAct(BCA)donotapply.”Belascocontinued,“InrecenttestimonyonSeptember18,2014,forexample,formerSecretaryofDefenseChuckHagelacknowledgedtheseambiguities,saying“there’realotofdifferentopinionsaboutwhetherthereshouldbeanoverseascontingencyaccountornotandwhetherit’saslushfundornot’.”23

CRSandCBOhavecontinuedtobeconcernedaboutDODaccounting.Forinstance,in

early2019ChristopherMannoftheCongressionalResearchServicerecentlynoted,“EstimatesofthecumulativecostsofwararecomplicatedbytheuseofOCO-designatedfundsforbasebudgetactivities.”24Further,Mannsays,“TheuseoftheOCOdesignationforfundingbothwarandnon-warrequirementshascreatedambiguityaboutenduringcostsunrelatedtoongoingconflicts.”25ACBOreportin2018notedthat“AscontingencyoperationshavebecomethenormandDoDhasadjusteditsallocationofresourcestoaccommodatethem,ithasbecomeincreasinglydifficulttodistinguishbetweentheincrementalcostsofmilitaryconflictsandDoD’sregular,enduringcosts.”26TheCBOestimatedthat,fromFY2006toFY2018,$53billioninOCOfundingwasbeingusedforactivitiesthatshouldhavebeenfundedinthebasebudget.27

Which raises the question of what to count as a DOD cost of the post-9/11 wars. Clearly,

althoughtheDODputssomeactivitiesinitsrequestforOCOappropriations,noteverythingisacostofthesewars.Because the category isclearlynotwarrelated,fundsdesignated “EmergencyRequirements”—moneyintendedfortheSouthernUnitedStatesborderwallanddisasterrelief—arenotcountedhereaspartofthecostsofthepost-9/11OCOwars.The Costs of War project includes FY2019 and FY2020 funding categories “OCOforEnduringTheaterRequirementsandRelatedmissions”and“OCOforBaseRequirements”which

22OfficeoftheUndersecretaryofDefense(Comptroller).(2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.6-8.23Belasco,Amy.(2014,December8).TheCostofIraq,Afghanistan,andOtherGlobalWaronTerrorOperationsSince9/11.CongressionalResearchService(CRS)p.20.24Mann,U.S.WarCosts,Casualties,andPersonnelLevelsSince9/11.25Mann,U.S.WarCosts,Casualties,andPersonnelLevelsSince9/11.26CBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending,p.10.27CBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending,p.2.

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reflecttheinstitutionalizationoftheGlobalWaronTerror,inthepreexistingCostofWarcategory“increasestothePentagonbase.”

ThePentagon’s“Base”budgethasbeeninflatedforthreeadditionalreasons.First,

smallincrementsofwarspendinghavealreadybeeninstitutionalizedinthebasebudget.Forexample,asalreadymentioned,OperationPacificEagle–PhilippinesmovedtothebasebudgetinFY2019,andin2004,spendingonOperationNobleEaglewasmovedfromOCOtothebasebudget.

Second,andmuchmoresignificant,overallUSmilitaryspendingforthebasehasbeen

increasedasaconsequenceoftheinstitutionalizationofcostsassociatedwiththeongoingwars.Forexample,repeateddeploymentshaveincreasedthewearandtearonsoldiers’mindsandbodiesand,asaconsequence,thehealthcarecostsforactivedutysoldiershasincreased.Further,thehigherpayassociatedwiththedesiretoattractandretainsoldiersduringthelongwarshasalsoboostedbasemilitaryspending.And,astheCBOhasnoted,thewarshavedrivenupoverallDODcostsforsoldiersbenefitsandcompensationthatnotonlykeeppacewithbutexceedincreasesduetoinflation.“Publicsupportforthemilitaryinwartimecandriveincreasesinpayandbenefitsnotonlyforforcesdeployedtocombatzonesbutforallservicemembers,includingthosewhohaveretired.”28AstheCBOnotes,thebenefitsincreaseswereatfirstthoughttobetemporaryandlimited,buttheyhavebeeninstitutionalized.

Forexample,in2004,nonbasefundingwasusedtoexpandTRICAREhealthinsurancebenefitstomembersofthereserveforcesforoneyear.ThatpolicywasextendedinsubsequentNationalDefenseAuthorizationActsuntil2007,whenitwasmadepermanentandfundingforitwasmovedintothebasebudget.Althoughtheexpandedbenefitswerenotdirectlyrelatedtothewarorlimitedtoreservistswhohaddeployed,thepolicychangesupportedallwhomightbecalledupontodeploy.

Similarlegislationthatexpandedlifeinsurancecoverageandsurvivor’sbenefitswasalsoinitiallyintendedtotemporarilysupportdeployedservicemembersbutwasextendedtotheentireforceandmadepermanent.29 Figure3illustratesthesteadygrowthinDepartmentofDefensebasebudget,which

oftenincreasesevenwhenOCOfundingdeclines.

28CBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending,p.14.29CBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending,p.14.

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Figure 3. DOD Base, OCO, and OCO for Base Spending Authorized and Requested FY2001-2020 in Billions of Current Dollars.30

Third,thePentagon’sbasebudgetspendinghaslikelygrownbecauseCongressseems

reluctanttotightenthereignsonoverallmilitaryspendingwhiletheUSisatwar.Thisappliesnotonlytoprocurementofnewweaponsandequipment,butalsotoinstallationscosts.Forexample,thePentagonestimatesthatithasexcesscapacitiesatitsbasesandinstallationsofabout20percent.Today,thereareabout800USmilitarybasesandinstallationsintheworld.31ThemostrecentoftheBaseRealignmentandClosure(BRAC)rounds,the2005to2011BRACprocess,ledtoanoveralldeclineinthenumberofDODbuildingsandotherstructures,fromover600,000individualbuildingsandstructuresonover30millionacresoflandbeforetheBRACinFY2003toabout585,800buildingsandstructureson26.9millionacresinFY2018.32YetthePentagon’sstateddesireforanotherroundofbaseclosuresseemstobethwartedbyaCongressunwillingorunabletodecideonanewroundofBRAC,eventhough,accordingtoseparateestimatesbytheHeritageFoundationandtheSustainableDefenseTaskForce,thiscouldsavebillionsofdollars.33

30Sourceofdata,DODComptroller,including,OfficeoftheUndersecretaryofDefense(Comptroller).(2019).DefenseBudgetOverview:UnitedStatesDepartmentofDefenseFiscalYear2020BudgetRequest,p.1-4.31DavidVine.(2019)."ListsofU.S.MilitaryBasesAbroad,1776-2019,"AmericanUniversityDigitalResearchArchive,https://doi.org/10.17606/vfyb-nc07.DepartmentofDefense.(March2019).DoDBaseRealignmentandClosure,BRACRounds(BRAC1988,1991,19931995&2005),ExecutiveSummary,https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2020/budget_justification/pdfs/05_BRAC/BRAC_Exec_Sum_J-Book_FINAL.pdf.32Sources:DepartmentofDefenseBaseStructureReportsforFY2003andFY2018.See,forFY2003,https://archive.defense.gov/news/Jun2003/basestructure2003.pdf;andforFY2018,https://www.acq.osd.mil/eie/Downloads/BSI/Base%20Structure%20Report%20FY18.pdf.33SeeLeoShane,III.(15August2019).“PlansForANewBaseClosingRoundMaybeRunningOutofTime:Report,”MilitaryTimes,,https://www.militarytimes.com/news/pentagon-congress/2019/08/15/plans-for-a-new-base-closing-round-may-be-running-out-of-time-report/;FredericoBartels.(28November2017).“WithNewRoundofBaseClosures,U.S.CouldSave$2BilliononDefense,”theHeritageFoundation,https://www.heritage.org/defense/commentary/new-round-base-closures-us-could-save-2-billion-year-defense;CenterforInternationalPolicy,SustainableDefenseTaskForce.(June2019).“SustainableDefense:

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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Similarly,personnelcostsmayalsobeinflatedduetoadesiretodemonstratepatriotisminwar.AstheCBOnotes,“increasesinmilitarypay(inexcessofgrowthinprivate-sectorwages)andtotalretirementcompensationmayhavebeenmotivatedbyadesiretoshowsupportforalltroopsduringwartime.Suchchangestopayandbenefits,evensmallones,canhavelargeandlastingeffectsonDoD’scostsbecausetheypermanentlyincreasethecostsofcompensatingservicemembers.Thoseincreasedcostsarethencarriedovertofuturebasebudgets.”34

StateDepartmentOCOfundingisalsosometimeslessthantransparent.Thisreporthas

notincludedasacostofwarsomeOCOappropriatedtotheStateDepartment.Forexample,CRSgivesafigureof$162billioninOCOfundingfortheStateDepartmentthroughFY2019.Theirestimateincludesemergencyfundingforseveralnon-warrelatedcontingencies:“Theestimated$162billioninemergencyandOCOappropriationsenactedtodateforState/USAIDincludesmajornon-war-relatedprograms,suchasaidforthe2004tsunamialongIndianOceancoasts,2010earthquakeinHaiti,2013EbolaoutbreakinWestAfrica,and2015worldwideoutbreakoftheZikavirus;aswellasdiplomaticoperations(e.g.,payingstaff,providingsecurity,andbuildingandmaintainingembassies).”35TheCostofWarestimateforStateDepartmentOCOspendingisthuslowerthantheCRSfigurebecausethefocushereisonStateDepartmentandUSAIDoperationsinthemajorwarzonesanddoesnotincludefundingforthesenon-waremergencies.

Homelandsecurityspendingoccursinseveralagencies,includingtheDepartmentof

HomelandSecurity.TheDepartmentofHomelandSecurityitselfplacesahighpriorityonprotectingandrespondingtoterroristattacks.Forexample,theFY2020budgetsummaryforDHSsays:“Nefariousactorswanttodisruptourwayoflife.Manyareincitingchaos,instability,andviolence.Atthesametime,thepaceofinnovation,ourhyperconnectivity,andourdigitaldependencehaveopenedcracksinourdefenses,creatingnewvectorsthroughwhichourenemiesandadversariescanstrikeus.Thisisavolatilecombination.Theresultisaworldwherethreatsaremorenumerous,morewidelydistributed,highlynetworked,increasinglyadaptive,andincrediblydifficulttorootout.The‘homegame’hasmergedwiththe‘awaygame’andDHSactionsabroadarejustasimportantasoursecurityoperationshereathome.”36Forexample,DHSsays,“Bordersecurityisnationalsecurity.”37TerrorismiscentraltomanyotherDHSmissions,aswell,fromtheCoastGuardtocybersecurity.Butbecausethecounterterrormissionhasbeeninstitutionalizedandmergedwithitsmainmissions,itisdifficulttofindacoherentanalysisoftheincrementaladditionofthecostofcounterterrorismwithintheDHSbudget.

Further,becausehomelandsecurityspendingoccursinmanyagencies,onehastoadd

thoseup.Inpreviousyears,theDHSbudgethighlightedexpendituresforallcounterterror MoreSecurity,LessSpending,”https://static.wixstatic.com/ugd/fb6c59_59a295c780634ce88d077c391066db9a.pdf.34CBO,FundingforOverseasContingencyOperationsanditsImpactonDefenseSpending,p.14.35McGarryandMorgenstern,OverseasContingencyOperationsFunding:BackgroundandStatus,p.23.36DepartmentofHomelandSecurity.(2019).FY2020BudgetinBrief,p.1.https://www.dhs.gov/sites/default/files/publications/19_0318_MGMT_FY-2020-Budget-In-Brief.pdf.37DHS,FY2020BudgetinBrief,p.2.

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missions,concatenatingallagencyexpendituresusingthecategories“PreventandDisruptTerroristAttacks,”“ProtectAmericans,CriticalInfrastructureandResources,”and“RespondandRecoverfromIncidents.”TheDHShasreorganizeditsreportingonspending.NowthesemissionsareessentiallymergedwithotherDHSmissionsandtheDHSdoesnothighlightisownorotheragencies’spendingonthesemissions.

Since2017,theWhiteHouseandDepartmentofHomelandSecurityhavenotprovided

abreakdownofDHSexpendituresbymissionsdevotedtopost-9/11counterterrorism.In2017,WhiteHouseOfficeofManagementandBudgetstatedinitsAnalyticalPerspectivesonthebudgetthat,“PreviousAnalyticalPerspectivesvolumesincludeda‘HomelandSecurityFundingAnalysis’chapter,andprovidedadditionaldetailedinformationontheInternetaddresscitedaboveandontheBudgetCD-ROM.P.L.115-31eliminatedthestatutoryrequirementforthisinformation.Therefore,thisinformationisnotincludedinthisyears'BudgetanditwillnotbeincludedinfutureBudgets.”38AsoftheFY2018budgetrequest,theDepartmentHomelandSecuritybudgetisnolongerexplainedbytheWhiteHouseOfficeofManagementandBudget.

TheCostsofWarestimateforhomelandsecurityrelatedspendingisthusbasedon

previousDHSspendingoncounterterrormissionsandworkbytheCRS.Specifically,WilliamPainterofCRSnotesthat“theagency-reporteddataonspendinginthreecategories—preventinganddisruptingterroristattacks;protectingtheAmericanpeople,criticalinfrastructure,andkeyresources;andrespondingtoandrecoveringfromincidents”showsthat“fromFY2003throughFY2017,theentireU.S.governmentdirectedroughly$878billion(innominaldollarsofbudgetauthority)tothosethreemissionsets.”39AssumingthatspendingforthecounterterrorismisroughlythesameastheaveragespendingannualspendingduringtheFY2003-FY2017period,thisreportestimatesthattheaverageannualspendingforFY2018toFY2020isabout$59billionincurrentdollars.

CostsofPost-9/11WarVeteransMedicalCareandDisabilityCompensation

In2018,therewere4.1millionpost-9/11warveterans,comprisingabout21percentof

allveteransand16percentofallveteransservedbytheDepartmentofVeteransAffairs(VA).40Thepost-9/11warveteransare,ingeneral,lesshealthythantheveteransofpreviouswars.Advancesintraumaandbattlefieldmedicine,havemeantthattheveteransofthesewars,alsocalledGulfWareraIIveterans,havesurvivedtolivewithmoreservice-connecteddisabilitiesthanveteransofpreviouswars.Theseveterans,exposedtodifferentfieldconditionsandwhooftenservedmultipledeployments,needmoreanddifferentkindsofmedicalcarethantheveteransofpreviouswarsandthosecostswillonlyrise.For

38OfficeofManagementandBudget.(2017).AnalyticalPerspectives:BudgetoftheU.S.Government,FiscalYear2018,https://www.whitehouse.gov/omb/budget/Analytical_Perspectives39Painter,SelectedHomelandSecurityIssuesforthe116thCongress.40BureauofLaborStatistics,USDepartmentofLabor.(21March2019).EmploymentSituationofVeterans—2018.https://www.bls.gov/news.release/pdf/vet.pdf.

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example,theVAestimatesthatthe10yearcostofcaringforpost-9/11veteranswithtraumaticbraininjuries(TBI)alonewillbe$2.4billionfrom2020to2029.41

Nearlyhalfoftheseveteranshaveserviceconnecteddisabilityassessedtobe60

percentorgreater.42Thoseveteranswitha“ServiceConnectedDisability”areeligibleforcompensationbasedontheirpercentageofdisability.43Further,thoseveteranswhoarerated60percentandabovedisabledareeligibleforindividualunemployabilitybenefitsiftheymeetspecificcriteria,includingtheinabilitytomaintaingainfulemploymentasaresultoftheirserviceconnecteddisabilities.“InSeptember2018,356,668VeteransreceivedIU,anincreaseof8,156casesoverSeptember2017.”44Further,thedependentsofveteransarealsoentitledtoreceivecompensationandthenumberofdependentsreceivingserviceconnectedcompensationisgrowing.45

TheVAcountstheveteransofthepost-9/11warsinthesamecategoryasthe650,000

peoplecurrentlyintheVAwhoare1990GulfWarveteransandthus,veteransfromtheentireperiodfrom1990tothepresentarecategorizedas“GulfWarEraVeterans”intheVAdisabilitycompensationrecords.46IntheirFY2020budgettheVAestimatedthatveteranswhoservedfrom2August1990tothepresentcomprise50.7%ofthecompensationobligationsforallveteransofUSwars.47Thefollowingfigure,reproducedfromtheDepartmentofVeteransAffairs,showstheactualandprojectedcaseloadsof

41DepartmentofVeteransAffairs.(2019).VolumeII,MedicalProgramsandInformationTechnologyPrograms,p.VHA-150,https://www.va.gov/budget/docs/summary/fy2020VAbudgetVolumeIImedicalProgramsAndInformationTechnology.pdf.42BureauofLaborStatistics,EmploymentSituationofVeterans—2018.43Thosecompensationratesvarydependingonwhethertheveteranhasaspouse,parentsand/orchildren.ForthecurrentCompensationBenefitsRatesTablesee,U.S.DepartmentofVeteransAffairs,(2019)https://www.benefits.va.gov/COMPENSATION/resources_comp01.asp#BM01.Inaddition,thespousesandchildrenofservicemembersareeligibleforDependencyandIndemnityCompensation(DIC),“ataxfreemonetarybenefitpaidtoeligiblesurvivorsofmilitaryServicememberswhodiedinthelineofdutyoreligiblesurvivorsofVeteranswhosedeathresultedfromaservice-relatedinjuryordisease.”DepartmentofVeteransAffairs,https://benefits.va.gov/COMPENSATION/types-dependency_and_indemnity.asp.44DepartmentofVeteransAffairs.(2019).VolumeIII,BenefitsandBurialProgramsandDepartmentAdministration,p.VBA-59.https://www.va.gov/budget/docs/summary/fy2020VAbudgetvolumeIIIbenefitsBurialProgramsAndDeptmentalAdministration.pdf.45DepartmentofVeteransAffairs.VolumeIII,BenefitsandBurialProgramsandDepartmentAdministration,2020CongressionalSubmission,p.VBA-57.VAServiceConnectedDisabilityratesaretiedtoSocialSecurityAdministrationCostsofLivingAdjustments.46TheGulfWarEraisthustwoperiods:thefirstperiodisPre-9/11with763,337servicemembersdeployedandparticipatingintheGulfWarfrom2August1990to10September2001.SeeDepartmentofVeteransAffairs.(February2011).GulfWarEraVeteransReport:Pre-9/11:August2,1990toSeptember10,2001,p.5.https://www.va.gov/vetdata/docs/SpecialReports/GW_Pre911_report.pdf.47“Benefitsinthecompensationprogramareestimatedtobedispersedto5,033,113Veteransand443,407Survivorsin2020and5,192,776Veteransand456,294Survivorsin2021.The2020VeteranandSurvivorcaseloadestimateisdistributedamongWorldWarIIandPrior(76,823),KoreanConflict(126,947),VietnamEra(1,717,752),GulfWar(2,702,897),andPeacetime(852,101)periodsofservice.”DepartmentofVeteransAffairs.VolumeIII,BenefitsandBurialProgramsandDepartmentAdministration,2020CongressionalSubmission,p.VBA-56.

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veteranswithdisabilityandcompensation.Thetopline,forGulfWarEraveteransandsurvivorsisgrowing,projectedtonearlydoublebetween2014and2021.

Figure4.DistributionofDisabilityCompensationCaseloadsbyPeriodofService,FY2014toFY202148

ConclusionsThemajortrendsinthebudgetarycostsofthepost-9/11warsinclude:lesstransparency

inreportingcostsamongmostmajoragencies;greaterinstitutionalizationofthecostsofwarintheDODbasebudget,StateDepartment,andDHS;andthegrowingbudgetaryburdenofveterans’medicalcareanddisabilitycare.

Opportunitiesexistforincreasingtransparencyaroundwar-relatedbudgeting.TheDOD

could,forexample,bemoretransparentabouttheuseofOCOappropriationsforallnamedand unnamed OCO operations. The Department of Homeland Security could clarify thespending for preventing and responding to terrorist attacks and other post-9/11 warmissions.TheDepartmentofVeteran’sAffairscouldconsistentlybreakoutthespendingonveteransofthepost-9/11warsfromthespendingonveteransofthe1991GulfWaranditsassociatedoperations.

Finally, there are opportunities to reduce the long term costsof intereston the debt

associatedwithmilitaryspendingforwars,forinstance,bysellingwarbondsorinstitutingapost-9/11wartax.

48Source:DepartmentofVeteransAffairs,VolumeIII,BenefitsandBurialProgramsandDepartmentAdministration,FY2020CongressionalSubmission,p.VBA-57.