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Center for American Progress

The WMD Sequel: Iraq, Afghanistan and Deficit Reduction

President Bush talks a lot about fiscal discipline. He says he can cut the deficit in half within five years. But it's only when you look at what's not in the budget – especially resources for reconstruction and our military presence in Iraq and Afghanistan – the sheer audacity of his claim really becomes clear.

Even if you believe that the administration is serious, virtually all of the money saved by cutting so-called discretionary programs – important domestic priorities such as health care, job retraining and education – will actually be consumed by supplemental spending for Iraq and Afghanistan over the next five years, monies that are not in current budget projections.

The president's budget for the current fiscal year projects a deficit of $521 billion, or roughly 4.5 percent of GDP, according to the Office of Management and Budget. A Congressional Budget Office deficit calculation is slightly lower at $478 billion. By 2009, the administration assumes that economic growth and a reduced growth in government spending will drop the deficit to $237 billion in current dollars, or about 1.8 percent of GDP. That represents as much as $284 billion in promised deficit reduction.

Even before we wade into the strange world of supplemental requests, there are good reasons to doubt the administration's budget reduction math: Mr. Bush has yet to submit a balanced budget or veto a spending bill; the president's plan to make his tax cuts permanent is not yet reflected in any budget; and the sudden recalculation of the cost of the new Medicare prescription bill – which went from $400 billion to $530 billion from its announcement until the budget appeared.

What will be required to finish the job in Iraq and Afghanistan? We estimate no less than $219 billion – the minimum the administration will request over the next five years to sustain military and reconstruction efforts in those two nations.

Roughly $180 billion of the $219 billion – based on current spending of $4.7 billion per month – are funds needed just to keep adequate military forces in Iraq and Afghanistan. In its FY 2005 supplemental request alone – which the White House (surprise) is not planning on making until after November 2 – the administration will be asking for a minimum defense supplemental of $48 billion for military operations. And U.S. officials are already projecting that substantial military forces will remain at least into 2007.

Reconstruction assistance makes up the remaining $39 billion. The World Bank and Coalitional Provisional Authority say that Iraq alone will require $55 billion over the next four years. If the October 2003 donors' conference in Madrid is any indication – when most of the international community's pledges were made in the form of loans – the
United States will bear most of the burden in Iraq for the foreseeable future.

It is tempting to believe that the international community will increase its assistance, particularly if the United Nations is given a prominent role. The president has spoken of a "vital" but undefined role for the United Nations, though the administration's encouragement of the recent U.N. election mission is born out of desperation, not admiration.

We do not expect an international rush into Iraq after June 30, particularly if the insurgency intensifies. The administration has yet to put forward a plan that encourages broader international support, while the threat of civil war among the country's Shia, Sunni and Kurdish populations is all too real.

It is also tempting to hope that Iraq will be able to contribute heavily to its own reconstruction. But for the time being, Iraqi oil revenue must be plowed back into expanded production, crucial to Iraq's long-term fiscal stability, leaving the United States responsible for most of Iraq's tattered infrastructure and on-going military and security force training.

Our $219 billion "best case" scenario assumes, in fact, that things will go pretty well in Iraq and Afghanistan over the next five years – hardly a given.

We assume that the administration will continue its stated commitment to build democratic regimes and – realizing that success costs money – not try nation-building on the cheap. We assume, too, that international support will grow; that Iraq's transformation will in large part succeed; and that United States and international forces can be reduced as the Iraqis assume greater responsibility for their own security.

With apologies to Churchill, the Bush deficit reduction plan is an exaggeration wrapped in a gimmick, but there is no mystery. No one should think that presumed cuts in important domestic discretionary programs will actually cut the deficit. And our military and reconstruction commitments in Iraq and Afghanistan – obligations that any President should keep – may be off the Bush accounting books. But unlike the nuclear bombs Iraq never had, this economic weapon of mass destruction actually exists – hidden away in a budgetary spider hole.

P.J. Crowley is a senior fellow and director for national defense and homeland security and Sonal Shah is associate director for Economic and International Policy at the Center for American Progress.

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