What Are the Facts About the War on Terror Costs?

Question: What Are the Facts About the War on Terror Costs?

Answer: The War on Terror (WoT) was a phrase coined by the Bush Administration. It described the national security response to the 9/11 terrorist attacks. The War on Terror included military action in Afghanistan and Iraq, and created the Department of Homeland Security. Here's a summary of the true costs of the War on Terror, taken from a Congressional report and the actual budget requests.

War on Terror Spending During Bush Administration

• FY 2001 & 2002 - Bush asked for $20.8 billion to launch the Afghanistan War, and $13 billion for additional Security measures.
• FY 2003 - The "Shock and Awe" start to the War in Iraq cost $53 billion.
• FY 2004 - Total WoT costs were $94.1 billion.
• FY 2005 - The budget request increased to $107.6 billion.
• FY 2006 - Defense spending was $594.6 billion, including $120.4 billion added by a Supplementary budget for the War on Terror.
• FY 2007 - Military spending was $671.6 billion, which appropriated $173.6 billion specifically for the War on Terror.
• FY 2008 - Military spending was $686 billion, including $197.5 billion in supplemental spending for the War on Terror.
• FY 2009 - Security spending was $782 billion, including $70 billion in supplemental spending for the War on Terror.

Between FY 2001 - FY2009, $850 billion was spent on the War on Terror. This was in addition to the Department of Defense base budget. However, this estimate is low because the Bush Administration did not include Veterans Administration costs to care for returning servicemen or expanded Homeland Security expenses.

War on Terror Spending During the Obama Administration

The phrase, War on Terror, was dropped by the Obama Administration. However, total military-related costs appeared to escalate in his first term because they included the VA and Homeland Security.

• FY 2010 - Obama spent $850 billion on defense in his first year. This included $530.1 billion for the DoD base budget, and $152.7 billion to fund other departments, such as Homeland Security and the Veterans Administration. He doubled the amount for the Overseas Contingency Operations, to $167.3 billion, to fund an orderly wind-down to end the War in Iraq.
• FY 2011 - Obama increased spending to $838 billion. It included $159.4 billion in contingency funds to beef up initiatives in Afghanistan and Pakistan.
• FY 2012 - Obama further increased security spending to $909 billion. This included $530.4 billion for the DoD base and $126.5 billion in OCO for the War in Afghanistan. Spending by other departments to support defense added $153.6 billion. Homeland Security was $39.9 billion and the Veterans Administration was $58.7 billion.
• FY 2013 - Defense spending dropped to $780.7 billion. This includes the DoD base at $525.4 billion and OCO at $96.7 billion. The costs from other departments that support defense totals $158.6 billion, plus Homeland Security ($39.5 billion) and Veterans Affairs ($61 billion).
• FY 2014 - The true cost is $745.2 billion. The DoD base budget was $525.6 billion. The OCO was budgeted at $92.3 billion, although that might change once the President announces when the U.S. will pull out of Afghanistan sometime during the year. Since the War is ending, the costs of other departments' defense programs dropped to $25.4 billion. Homeland Security costs will stay the same, at $37.4 billion, while Veterans Administration ($63.5 billion) will rise.

Contingency funds for operations in Afghanistan and Iraq from FY 2010 - FY 2014 was $642.2 billion -- three-fourths as much as Bush spent on the "War on Terror" initiative in eight years. President Obama campaigned on defense reduction, and was awarded the Nobel Peace Prize for pulling troops out of Iraq. However, his military-related spending made him look like a hawk.

The FY 2011 security budget request of $895 billion was the highest in U.S. history. (In FY 2012, the government spent more at $909 billion, but the request was lower.) Why didn't the Nobel Committee, or anyone else, pick up on this? Mainly because the budget was so complicated, you really had to dig to find the information, and to understand it. The $895 billion security budget request was in Table S-4. It included spending across several departments (Table S-11):

• DoD - $548.9 billion
• Dept. of Energy, Nuclear Security - $11.2 billion
• Homeland Security - $43.6 billion
• Veterans Administration - $57 billion
• State and other International Programs - $58.5 billion.

This only added up to $719.2 billion. Where's the rest? In the Overseas Contingency Operations - $159.3 billion for DoD and Homeland Security Overseas Operations.

Obama requested more for security spending than Bush ever did with the War on Terror. To be fair, Obama's security budget is a more realistic assessment of America's true defense costs. It includes Veterans Affairs, Homeland Security, the Nuclear Safety Administration and the State Department. Bush's budget didn't.

War on Terror Spending to Date

From FY 2001 - FY 2014, spending on the Overseas Contingency Operations to fund the wars in Iraq and Afghanistan was $1.492 trillion. This was a significant addition to the U.S. debt. This does not include the DoD base budget, the expenses incurred by other departments, such as the FBI or State Department, or the cost to run Homeland Security and the VA -- all of which contributed to the nation's security.

The true cost of the War on Terror is not just what it has added to the debt, but also the lost jobs that could have been created with those funds. Every $1 billion spent on defense creates 8,555 jobs and adds $565 million to the economy. However, that same $1 billion given to you as a tax cut would have stimulated enough demand to create 10,779 jobs and put $505 million into the economy as retail spending. And $1 billion in education spending adds $1.3 billion to the economy and creates 17,687 jobs. Perhaps for the health of the U.S. economy, the best defense is a good offense. Article updated April 17, 2013