The Iraq War, the U.S. Budget and History

With military operations dragging on in Iraq and a recent flare-up of hostile activity in Afghanistan, U.S. President George W. Bush has asked Congress for $87 billion in emergency spending. How is the money to be spent? And how does this spending compare to the costs of past wars? Our Globalist Factsheet examines the expenses involved.

What is the total amount of funding the Bush Administration has asked for to date?

The proposed $87 billion for the reconstruction and occupation of Afghanistan and Iraq — combined with the previous $79 billion for the invasion — means that $166 billion would be spent by the fall of 2004.

(Boston Globe)

How does that compare to the costs of the first Gulf War?

The $166 billion earmarked for invasion and occupation of Iraq is more than 25 times the bill of $6.4 billion (in 2003 dollars) which U.S. taxpayers spent on the 1991 Gulf War to expel Iraq from Kuwait.

(New York Times)

Why is this amount historically significant?

This request is the largest since the beginning months of World War II.

(Washington Post)

How does President Bush's war spending compare to earlier wars?

The $166 billion spent and requested for Iraq exceeds the cost of the U.S. Revolutionary War, the War of 1812, the U.S.-Mexican War, the Spanish-American War, the U.S. Civil War and the Persian Gulf War combined, when adjusted for inflation.

(Yale University)

What about World War I?

The cost of the war in Iraq is close to reaching the inflation-adjusted $191 billion cost of World War I.

(Washington Post)

How does money spent on rebuilding Iraq compare to Europe’s reconstruction after 1945?

Between 1948 and 1952, the United States spent just under $13 billion on the Marshall Plan to rebuild Europe — an amount equivalent to about $100 billion in 2003 dollars.

(New York Times)

By how much will this proposed emergency funding raise spending?

Though he pledged to only increase spending by 4%, the $87 billion U.S. President Bush is asking for from Congress — if approved — would boost discretionary spending in fiscal year 2004 by 10%.

(Wall Street Journal)

How does that stack up against the entire U.S. economy?

U.S. President George W. Bush has committed 0.6% of U.S. GDP to Iraq in the 2002-2003 fiscal year. He is committing another 0.7% of the U.S. GDP for the 2003-2004 fiscal year.

(New York Times)

How has government spending in general changed under the Bush Administration?

At the end of the Clinton Administration, government spending was just over 18% of the U.S. economy. Under George W. Bush, government spending now amounts to more than 20% of the economy. Only half of this increase is going to defense and homeland security.

(Heritage Foundation)

What effect will this have on the U.S. budget deficit?

The proposed spending on operations in Iraq and Afghanistan would cause the U.S. budget deficit to rise to between $525 billion and $535 billion for the 2004 fiscal year. This deficit would be roughly 4.7% of the projected $11.4 trillion economy. Previously, the expected budget deficit was at $475 billion.

(Wall Street Journal)

How is this $87 billion going to be spent?

It is divided first into military and intelligence activities, worth $65.5 billion. The remaining $21.4 billion will go to the reconstruction of Iraq and Afghanistan.

(Wall Street Journal)

How will the money for reconstruction be spent?

Iraq will receive $20.3 billion of the $21.4 billion set aside for reconstruction. Afghanistan will receive the remaining $1.2 billion.

(Wall Street Journal)

What is going to be funded?

Within Iraq, $15 billion would go to major rebuilding priorities such as electric power and infrastructure. An additional $3.7 billion would go to improve water and sewage facilities, $2.1 billion would go to sure up the oil industry equipment — and $900 million for reconstructing hospitals and medical clinics.

(Wall Street Journal)

How does the spending request compare to the outlays of other U.S. government departments?

The $87 billion request is larger than the $74 billion that the U.S. Defense Department had planned to spend on all new weapons purchases in 2004. And this figure is three times higher than the $29.5 billion the U.S. Department of Education was going to spend on elementary and secondary schools.

(Washington Post)