Total Cost Of Iraq War Could Exceed $3.5 Trillion: Maloney
BY JOHN TOSCANO

"Democrats in Congress are committed to bringing our troops home and charting a new, more responsible direction in Iraq."

A new report which established the high hidden economic costs of the Iraq war at $3.5 trillion was released last week by Congressmember Carolyn Maloney and United States Senator Charles Schumer.

The report was compiled by the Joint Economic Committee of Congress, headed by Schumer as chairman and Maloney as vice chairman.

Maloney (D- Queens/Manhattan) said she asked for the study in order to examine the broader impact of the war on the American economy.

"So far," she said, "the full economic costs of the Iraq war are about double the immense federal budget costs that have been reported to the American people."

Continuing, Maloney stated, "The cost of this war has been too great and the human toll too high. We know that a rapid deployment will save countless American lives. The Joint Economic Committee (JEC) estimates that a sharp drawdown in U.S. forces, much like the plan the House is advancing, could also save the American economy up to $2 trillion over the next 10 years.

"Democrats in Congress are committed to bringing our troops home and charting a new, more responsible direction in Iraq."

Schumer (D- New York) stated, "What this report makes crystal clear is that the cost to our country in lives lost and dollars spent is tragically unacceptable."

The JEC report includes among the high hidden economic costs interest on money borrowed to conduct the war; lost investments and the income from them; longterm veterans' health care, and oil market disruptions.

In addition to the monumental costs, the U.S. and its economy have also been negatively impacted by sharp reductions in other spending priorities, such as health care and college aid, Maloney pointed out.

The JEC economic loss figure for the Iraq and Afghanistan wars (with the far greater amount incurred in Iraq) covers the period from 2003 to 2017. Maloney noted that the $3.5 trillion JEC estimate is $1 trillion higher than the recent Congressional Budget Office federal cost forecast for the same scenario, which counted only direct spending and interest paid on war-related debt.

The total economic cost of the two wars on an American family of four from 2002 to 2008 is $20,900, and from 2002 to 2017 it skyrockets to $46,400, Maloney said.

Maloney detailed the key costs beyond the direct fiscal spending.

•The war has been and continues to be funded with borrowed money and the increase in government borrowing has displaced substantial amounts of productive investments by U.S. businesses, thus reducing productivity in the economy over many future years.

•Substantial amounts of Iraq war-related borrowing has come from foreign sources and interest payments on this debt flow from Americans to foreigners.

•Both the direct effect of the war in reducing Iraqi oil production and the indirect effect of creating greater instability in the Middle East can act to increase oil prices.

•Military costs attributed to the war include costs of treating the wounded and disabled, lost productivity from the wounded, potential future expansion of military forces, increases in recruitment and economic disruptions caused by deployment of the Reserves.

Maloney pointed out that the JEC study shows that, to date, President George W. Bush has requested $607 billion for the Iraq war since 2003 and another $197 billion for Afghanistan. This total of $804 billion, Maloney said, is more than 10 times higher than the $50 to $60 billion estimated by the administration prior to the start of the war.

The possibility that the cost of the wars from 2002 through 2017 could balloon to $3.5 trillion or more, Maloney said, is based on the JEC report forecasting a scenario using the same Congressional budget 10- year window used by Secretary of Defense Robert Gates recently.

Gates said that a Korea-like presence would be required in Iraq and assumes a troop reduction of 66 percent in Iraq by 2013 and 33 percent in Afghanistan during the same period. It's also assumed that there will be some active conflict with insurgents over the same period, Maloney said.

The CBO estimates the cost at $2.4 trillion under this scenario, Maloney said, and more than $1 trillion in Afghanistan, for a total of $3.5 trillion.

But Maloney says costs could far exceed these projections if the assumed troop reductions do not materialize.

Also, maintaining post-surge troop levels in Iraq over the next 10 years would result in costs of $4.5 trillion, but if a rapid withdrawal takes place, future war costs to the U.S. economy over the next decade could be reduced by almost $2 trillion.