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War Estimate Approaching $100b, for Starters

Edward Epstein | San Francisco Chronicle | March 14, 2003

"Leaks this week indicated Congress can expect a special spending request of $60 billion to $95 billion to pay for the first six months to a year of war and its aftermath."

WASHINGTON — The estimated cost of a war with Iraq and its aftermath is mounting, posing further difficulties for President Bush as he tries to win Congress' approval of his big tax cut and shore up international support for his stance on Iraq.

Citing uncertainties over the duration of a war and subsequent plans to occupy and rebuild Iraq, the White House won't formally guess at the costs, much of which may have to be borne by American taxpayers.

But administration leaks this week indicated Congress can expect a special spending request of $60 billion to $95 billion to pay for the first six months to a year of war and its aftermath.

Estimates of these costs vary widely. Before he was forced out late last year, Bush's economic adviser Lawrence Lindsey publicly put the cost at $100 billion to $200 billion, a figure initially disputed by other administration officials.

Some estimates outside the administration set the bill even higher. They factor in bringing democracy to Iraq, which would mean a long-term commitment of manpower and tens of billions of dollars a year.

Yale University economist William Nordhaus said the cost of war and rebuilding could range from $100 billion to $600 billion over a decade.

Such estimates have given some Bush loyalists sticker shock, especially because the federal budget deficit is expected to top $300 billion in the current fiscal year. In view of that, some Republican senators have suggested paring the president's plan for a $726 billion tax cut package.

At least two GOP senators, John McCain of Arizona and Lincoln Chafee of Rhode Island, said that because of the looming war, they haven't decided yet to support any tax package.

Others, such as Sen. Chuck Hagel, R-Neb., want answers before moving ahead.

"I think the best that they have come up with is, 'Well, you'll know about it when we bring up the supplemental.' I don't think that's a good way to do this," Hagel said at a Senate Foreign Relations Committee hearing Tuesday.

That session heard what may have been the most detailed estimate yet of a war and occupation. Coupled with a recent report from the nonpartisan Congressional Budget Office, the picture that emerges is one of huge costs, especially in rebuilding Iraq's oil fields, providing civilian infrastructure such as water, sanitation and electricity, and helping create a new Iraqi government.

The budget office told Congress last week that the U.S. military buildup around Iraq already has cost $14 billion. It will cost another $9 billion to bring home those forces, which total about 250,000 people.

The first month of a war, which most experts expect to be over quickly, would cost $10 billion. Each additional month would cost $8 billion.

The occupation of Iraq would cost $1 billion to $4 billion — per month, the Congressional Budget Office said.

Gordon Adams, a professor of international affairs at George Washington University, said that's just the start. Humanitarian aid would cost $3.5 billion in the first year alone, he said, building on research by Yale's Nordhaus.

Governing Iraq, paying civil servants and establishing a new, more democratic system would cost $12 billion over five years. About $5 billion would be needed at the outset.

Physical reconstruction of everything from oil fields to water and communications would cost $30 billion to $100 billion over a decade, Adams said.

The idea that Iraq's oil wealth will pay for all of this is an illusion, Anthony Cordesman, an analyst at the Center for Strategic and International Studies, said Thursday.

A successful war to oust Iraqi leader Saddam Hussein won't erase the country's foreign debt of $62 billion, overseas claims against it of $172 billion, possible reparations and the big contracts that Hussein's regime signed for oil field development with Russian, French and Chinese companies.

Iraq's oil production, which reached 3.5 million barrels a day before Hussein took power in 1979, now is put at 2.5 million to 3.8 million barrels.

"Even if they go up to 3.5 million barrels or even 6 million over 10 years, this is not going to solve Iraq's problem," Cordesman said.

Cordesman also pointed out that Iraq's population has exploded, from about 7 million in 1970 to 24 million today. Per capita oil income has plunged in that same period to $700 from more than $4,000.

Adams estimated that other countries might pay just $15 billion of the total war costs, leaving the United States with a huge tab. In the 1991 Persian Gulf War, which was fought with approval of the United Nations and a big international coalition, allies paid $53.7 billion of the estimated $61.1 billion cost.

To Adams, the ill will from the U.N. showdown could make it hard to get international checkbooks open for rebuilding Iraq.

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