Government Spending

Let Loose the Costs of War

They can be higher than expected.

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"Surprise, surprise, surprise" as Gomer Pyle might put it: Cost estimates for the military's foreign adventures can be wildly understated.

The General Accounting Office has come out with a series of reports on the various "contingency operations" that take U.S. troops to foreign shores. Since these operations come up suddenly, they aren't handled in the normal budget process. Instead, the Pentagon requests supplemental funds, guessing how much the operations will cost.

Unfortunately, in the former Yugoslavia, the military grossly underestimated the number of camps needed and the cost of preparing them. Contractor costs, which the Defense Department told Congress would be $192 million, ran to $247 million just through February. Those final costs will probably come in at more than twice the original DoD projection, as did deployment transportation costs.

Fiscal 1995 was a busy year for these outside-the-normal-appropriations-process operations. U.S. troops zipped off to emergencies in Cuba, Haiti, Rwanda, Somalia, Iraq, and Korea as well as the former Yugoslavia. The U.S. military spent over $2 billion in these unbudgeted funds "over there" last year.

Interestingly, spending on contingency operations spiked in the last month of the fiscal year. Had it been equivalent to the average monthly spending for the rest of the year, the final total would have been $254 million less than it turned out to be. The GAO says it can't find any "surge of operations…of sufficient magnitude to account for the surge in reported costs" in the last month. Perhaps the military is proving a special bureaucratic twist on the principle, "You gotta spend money to make money."