Thursday, July 22, 2004

A new name for The New IraqTM: The Money Pit.
The U.S. military has spent most of the $65 billion that Congress approved for fighting the wars in Iraq and Afghanistan and is scrambling to find $12.3 billion more from within the Defense Department to finance the wars through the end of the fiscal year, federal investigators said yesterday. . . .

The Army, which is overspending its budget by $10.2 billion for operations and maintenance, is asking the Marines and the Air Force to help cover the escalating costs of its logistics contract with Halliburton Co. But the Air Force is also exceeding its budget by $1.4 billion, while the Marines are coming up $500 million short. The Army is even having trouble paying the contractors guarding its garrisons outside the war zones, the report said.

. . .The hard-hit Army faces a $5.3 billion shortfall in funds supporting deployed forces, a $2 billion budget deficit for the refurbishing of equipment used in Iraq and a $753 million deficit in its logistics contract. The Army also needs $800 million more to cover equipment maintenance costs and $650 million to pay contractors guarding garrisons.
You may recall that back in late 2002 Yale economist William Nordhaus estimated the costs of the Iraq war in the hundreds of billions of dollars. Occupation and peacekeeping costs alone were estimated to be in the range of a low of $7.5bn to a high of $50bn annually.

But the GAO tells us that in FY2004 alone the Congress allotted $51bn for "ongoing military operations in Iraq" and the military needs another $12.3bn to make it to the end of October. Thus the actual figures blow even Nordhaus' most pessimistic estimates away!

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