War Costs Exceed Budget by 12.3 billion

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Registered: 03-18-2000
War Costs Exceed Budget by 12.3 billion
3
Thu, 07-22-2004 - 9:48am

Poor planning.


http://www.nytimes.com/2004/07/22/politics/22cost.html


Military operations in Iraq and Afghanistan are running $12.3 billion over budget this year, and Pentagon officials are trying to make up for the shortfall by transferring money from other accounts and delaying refurbishment of worn-out equipment in Iraq, the General Accountability Office said Wednesday.


The office, a nonpartisan Congressional agency, estimated that the Army was running about $9.4 billion short of what had been budgeted. By putting off other kinds of spending until next year, the military is likely to run up higher costs in future, said the agency, which was formerly the General Accounting Office.


Administration officials have acknowledged that costs in Iraq are running higher than the $65 billion that Congress approved for military operations in Iraq and Afghanistan. At the administration's urging, Congress is expected to pass an appropriations bill this week that contains $25 billion in funds for Iraq that can be used immediately.


But the new report suggests that the military could use up nearly half of that money by Sept. 30, the end of the current fiscal year.


Democrats seized on the report, attacking the administration for consistently underestimating war costs.


"The administration underestimated troop levels, underestimated the tempo and cost of operations, and underestimated the cost of logistics, maintenance, spare parts and services by contractors,'' said Representative John M. Spratt Jr., Democrat of South Carolina and chairman of the House Budget Committee.


In March, the administration estimating the cost of keeping soldiers in Iraq at $4 billion a month. But the costs have risen to about $5.5 billion a month, according to Congressional budget analysts, largely because attacks against American forces and the new Iraqi government show no sign yet of abating.


The G.A.O. estimate on military spending in Iraq is almost the exact opposite of the budget outlook for reconstruction. Congress approved $18.7 billion for reconstruction in Iraq and Afghanistan, most of that for Iraq, but only a few billion have actually been spent.


Much of the delay stems from the insecurity confronting foreign contractors in Iraq, the same factor that has caused American commanders to keep troop levels at much higher levels than expected.


Pentagon officials refused to comment on the accuracy of the General Accounting Office's estimate, but they acknowledged that costs were running well above the original budget and that they needed to divert money from other parts of the military budget.


If Congress passes a Pentagon authorization bill this week, as House and Senate leaders hope, Pentagon officials would be able to dip into the $25 billion in emergency financing immediately. But Pentagon officials said they did not want to use that money until the beginning of the new fiscal year on Oct. 1.

cl-Libraone~

 


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iVillage Member
Registered: 04-16-2003
Thu, 07-22-2004 - 10:00am
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Still fighting the war on the cheap--which is a very expensive way to do things. I have just concluded that we are only making matters worse in Iraq and that we should find a way to get out before it is too late.

iVillage Member
Registered: 04-16-2003
Thu, 07-22-2004 - 3:08pm
The first few paragraphs of this article are the same as the NYT, but here's the rest of the story. This is a liberal organization, but I have seen the problems elsewhere.

http://www.americanprogressaction.org/site/pp.asp?c=klLWJcP7H&b=100480#3

See also: Running Low on Ammo Military Turns to Overseas Suppliers to Cover Shortages

http://www.washingtonpost.com/wp-dyn/articles/A4044-2004Jul21.html

ROSY-SCENARIO PLANNING A FAILURE: One reason for the perilous shortfall: in going to war in Iraq, Bush and his administration dangerously assumed best-case scenarios. When Bush requested war money, he assumed that troop levels would drop by Sept. 30, and "a more peaceful Iraq would allow the use of more cost-effective but slower sea lifts to transport troops and equipment, and that troops rotating in would need fewer armored vehicles than the service members they replace." That didn't happen. An exploding insurgency and increased violence means "troop levels will remain at 138,000 for the foreseeable future, the military is heavily dependent on costly airlifts and the Army's force has actually become more dependent on heavily armored vehicles."

STATE DEPARTMENT: The State Department this week criticized the Department of Defense for taking the wrong focus in reconstructing Iraq. Specifically, State Department officials who have taken over the $18.4-billion Iraq reconstruction plan from the Pentagon concluded DoD had been putting "too much emphasis on big-ticket construction projects and not enough on creating jobs for Iraqis."

INCREASED CASUALTIES: The U.S. military death toll in Iraq reached 900 this week; the number of American service members injured is approaching 6,000. Since the transfer of power on June 28, "American troops in Iraq have been dying at a rate of two a day." Secretary of Defense Donald Rumsfeld admitted it's impossible to predict when the casualty count will begin to drop, but he thought the risk will be lighter once Iraq's own security forces become better trained and equipped to fight the insurgency. That can't happen if Iraqi forces lack the basic necessities to do their jobs. Pentagon figures show both the new police force and the reconstituted military are lacking basic weapons, vehicles, communications gear and body armor they need to take over security duties. Anthony Cordesman, an Iraq expert with the Center for Strategic and International Studies, blames the problem on a lack of planning: ''The U.S. wasted precious time waiting for its own forces to defeat a threat that it treated as the product of a small number of former regime loyalists and foreign volunteers, and felt it could solve without creating effective Iraqi forces."

RECRUITS NEEDED IMMEDIATELY: The New York Times reports, "In what critics say is another sign of increasing stress on the military, the Army has been forced to bring more new recruits immediately into the ranks to meet recruiting goals for 2004, instead of allowing them to defer entry until the next accounting year, which starts in October." This means "recruiters will enter the new year without the usual cushion of incoming soldiers, making it that much harder to make their quotas for 2005." Lt. Gen. Franklin L. Hagenbeck, the Army's top personnel officer, admitted the strain the war has put on the armed forces, "I worry about this every single day - recruiting and retention."

NO BLUE HATS: The Los Angeles Times reports, "In another setback for U.S. efforts in Iraq, the United Nations has been unable to secure enough troops to protect a U.N. contingent headed to the country to help with elections and rebuilding." Due to ongoing danger and costs "as well as the continuing unpopularity of the U.S. invasion," countries did not come forward with troops. "If other countries are unable to provide the troops, the job will fall to the U.S.-led coalition now patrolling the country. That outcome would be embarrassing for the Bush administration, which has been struggling all year to show it has international support for rebuilding Iraq."

BULLETS OVER BAGHDAD: The Washington Post reports this morning that the U.S. military is running short on one crucial wartime need: bullets. The Pentagon underestimated both production need and the level of resistance soldiers would face in Iraq. Until U.S. production can be brought up to speed, however, "the Army is taking unusual stopgap measures" such as buying ammunition from foreign governments like Britain and Israel. This isn't the first time the Pentagon has been caught unprepared in this war and had to scramble at the last minute: shortages in the production of Interceptor body armor meant soldiers weren't fully protected until 15 months after the beginning of the war. And last September, the Army's vice chief of staff admitted the military miscalculated the number of armored Humvees troops would need, leaving many soldiers unprotected.

WASTING MONEY ON UNSCRUPULOUS HALIBURTON: Money that could have been spent on soldiers or equipment to fight the war was instead shamefully squandered on Halliburton, which "overcharged the government for gasoline imports in Iraq and fell behind on tasks such as producing water for troops." A new report by the GAO shows Halliburton "overcharged the government by more than $165 million." For example, "assigning Halliburton Co. rather than the military to truck fuel into Iraq pushed up costs by $167 million, or 90 percent."

NO MONEY FOR TROOP FAMILIES: Republicans in the House of Representatives voted to block spending for military housing. In a near party-line vote (212-211), GOP lawmakers killed $500 million meant for constructing houses for troops' families. "Without the expansion, the program is expected to exhaust its current $850 million spending limit by November. Supporters said that would delay new housing for 50,000 military families over the next two years."

iVillage Member
Registered: 04-16-2003
Thu, 07-22-2004 - 3:32pm
So where has all the money gone and should we be concerned?

MOUNTAIN VIEWS: BUSH CRONIES PROFIT FROM IRAQ WAR WHILE OUR SOLDIERS DIE EVERY DAY

By John Hanchette

OLEAN -- More disturbing news from Iraq: Now United Nations auditors are complaining the Bush administration is holding back information concerning more than $1 billion in reconstruction contracts awarded to several well-connected American firms without competitive bidding.

The complaints come from the International Advisory and Monitoring Board -- a bookkeeping creation of the UN Security Council that includes members from the International Monetary Fund and the World Bank. The board was set up to make sure Iraq's oil revenue would be handled in proper fashion throughout the American occupation.

The audit in question only covers the start of the war to the end of last year, and is being conducted by one of the global accounting giants, the firm KPMG, whose auditors bitched just before last weekend that repeated routine requests for internal files relating to more than $10 billion in Iraq's oil proceeds since the war began have been stiff-armed by the Pentagon and White House. One of these internal audits includes three no-bid contracts worth a total $1.4 billion awarded to the Texas oil services behemoth Halliburton, the company Vice President Dick Cheney ran before stepping down to join Bush the Younger's year 2000 presidential campaign ticket. (Cheney still receives almost $1 million annually as part of his severance contract.)

One of the Halliburton contracts provided for importing and distributing fuels to keep Iraq going during the occupation and rebuilding -- and is the subject of other fiscal probes after complaints the huge firm was gouging by over-pricing the gas and oil. That contract was paid for out of Iraqi oil revenues.

KPMG says the initial $10 billion in Iraqi oil proceeds seems to have been properly deposited in the American-run Development Fund for Iraq, but it can't tell how the money is being spent. No evidence of fraud is reported, but KPMG beefed about lax bookkeeping, little financial control over key Iraqi ministries, duplicate salary payments to some Iraqi government employees, the bartering of Iraqi crude oil for Syrian electricity, and the continued lack of oil-pumping meters on Iraqi export shipping platforms despite repeated UN requests for such devices -- a failure that may have led to "an unknown quantity of oil smuggled out of Iraq following the war."

The Pentagon refused to say much about all this except to insist the American-run Coalition Provisional Authority (CPA) was doing the best it could in a "very challenging environment." Pentagon spokesman Lt. Commander Flex Plexico (one of my all-time favorite government names) said the CPA had made "every effort to bring sound management transparency and oversight to the Development Fund for Iraq while at the same time improving the quality of life for the Iraqi people."

Another KPMG audit covering the start of this year up until June 28, when the CPA relinquished power to an interim and hand-picked Iraqi government, is being conducted. The interim government, in order to keep track of the spending of oil revenues in the future, has created a Board of Supreme Audit, but the head of it -- a man said to have ample fiscal skills -- was assassinated in recent weeks. The auditors said they will continue to ask for all the Bush administration's no-bid contracts paid for with Iraqi oil income.

While the KPMG auditors also complained about lack of access to other no-bid contracts for rebuilding Iraq, and while the American public seems only dimly aware such goodies were handed out, the identities of some of the favored firms are well-known.

Even some of the rebuild-Iraq contracts handed out by the Bush administration after competitive bidding are controversial.

Bechtel Corp. is a San Francisco-based company with solid connections to the Bush White House. President Ronald Reagan's former Secretary of State George Shultz is on the board and senior vice president Jack Sheehan is a member of the Defense Policy Board, which advises Defense Secretary Donald Rumsfeld. Bechtel was awarded a $680 million contract from the United States Agency for International Development to rehabilitate Iraq's power, water and sewage systems and rebuild its only port. The bidding process was somewhat secretive and open only to a select group of American corporations.

The Center for Responsive Politics in Washington reports that the six firms allowed to bid on the contract contributed $3.6 million to American politicians in the three previous years -- two-thirds of it to Republicans, and that Bechtel contributed $1.3 million of the total. Bechtel has been criticized by some Iraqis for failing to provide drinkable water that meets even the questionable potability standards of Saddam Hussein's regime.

All of which is to note there is now an iron-clad, unbreakable and ultimately unhealthy bond between the American military and private industry.

Even before the Iraqi war, the Pentagon was spending about 8 percent of its overall budget -- at least $30 billion -- on private military companies. Gone is the familiar World War II template of our self-sufficient Armed Forces defending our shores and beleaguered friends in distant lands without much outside help. With the downsizing of the American military came a quiet Pentagon reaction: outsourcing every thinkable job to the private sector.

KP duty and laundry detail in Afghanistan and Iraq? Private contractors.

Uniformed, ramrod-tall recruiter in full dress? Replaced in at least 60 American cities by casually clothed private sector headhunters.

Beetle Bailey mowing the lawn and throwing garbage bags on an Army base? Inaccurate portrayal. Now it's a private "landscaper" and civilian "sanitation engineer."

The Pentagon pays private companies as much as $4 billion a year for war fighting exercises. A publicly-traded firm called Cubic recently brought in Bosnian refugees from around the United States to Fort Polk so they could recreate their gruesome experiences for American soldiers participating in war games.

At the end of last year, there were about 10,000 private contractor workers on the ground in Iraq -- outnumbering the second-largest contingent of Coalition troops, the British with 9,900.

Even the Pentagon manual on dealing with private contractors was written by a private contractor.

The Pentagon (and Bush administration) excuses all this by contending the downsized military, already stretched unbelievably thin, has to be left to do the actual fighting -- so these ancillary jobs and programs are better handled by civilians. The numbers are surprising. Thirteen years ago in the Gulf War, when Bush the Elder sent Saddam scurrying back to Baghdad, active duty troops in the Army numbered 711,000. Today that number is about 485,000 -- a reduction of almost a third.

None of this civilian element in the military is new in concept. Private contractors hauled food wagons in the Civil War. In Vietnam, more than 3,000 DynCorps workers serviced Huey helicopters. As recently as five years ago, a Halliburton subsidiary was making almost $3 billion by providing water, meals, mail and laundry for 20,000 American troops in the Balkans.

Private companies pursuing military goals goes back at least four centuries. In the early 1600s, Holland established the Dutch East India Company to free up trade routes, fight the British fleet, and prosecute a protracted war of independence against powerful Spain and Portugal. It fought several wars on its own. At its peak, it boasted 40 ships of war and 10,000 professional soldiers.

Same for the famed British East India Company. The original Queen Elizabeth chartered it on the last day of 1600. Its focus was mainly on India, where the firm quickly acquired almost all auxiliary governmental and military functions. It established huge trade monopolies, once employed the pirate Captain Kidd, put Napoleon into exile, and its flag inspired our Stars and Stripes.

So while history may yawn at civilian help in military pursuits, what is currently astounding in the American experience is the scale of this privatization. Perhaps this is what President Dwight D. Eisenhower had in mind way back when I was a college freshman, watching his farewell address on TV in January of 1961. Although the speech drew little attention at the time, it was pretty surprising.

Here was Ike, a president who quadrupled defense spending, the World War II commander in the European theater and a military leader all his life -- sometimes lumped in accolade with Winston Churchill as a savior of the western world from Hitler -- warning sternly against the dangers of a vast military-industrial complex he could see in our near future.

It showed amazing prescience, but the address totally confused the American media, so they generally ignored the speech. In it, Eisenhower warned of "grave implications" to the "very structure of our society" if our military meshes inextricably with the private sector. "In the councils of government," Ike intoned, "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

Somewhere, Ike is ruefully shaking his head. These concerns are drawing new voice.

Dan Briody is author of the book "The Iron Triangle: Inside the Secret World of the Carlyle Group" -- an investment entity that he calls "the model example of the nearly seamless connection between the Bush administration, self-enrichment and companies who receive big government defense contracts."

Bush the Elder, his former Secretary of State James Baker, and former Defense Secretary Frank Carlucci are longtime "consultants" to the Carlyle firm. The book, published last year, opens with a reference to the Eisenhower farewell speech. Briody, in a recent Internet interview on www.buzzflash.com, termed Ike's warning "exactly what we're seeing today."

He claimed, "We're seeing a very tight-knit group of companies and private military contractors that are virtually indistinguishable from various administrations and the political infrastructure of Washington, D.C. -- so much so that it's not clear whose interests we're acting on when we go to war."

If the White House of Bush the Younger disagrees, it could do a lot to diminish such doubt by complying with the requests of UN auditors.



--------------------------------------------------------------------------------

John Hanchette, a professor of journalism at St. Bonaventure University, is a former editor of the Niagara Gazette and a Pulitzer Prize-winning national correspondent. He was a founding editor of USA Today and was recently named by Gannett as one of the Top 10 reporters of the past 25 years.