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What Are the Facts About the War on Terror Costs?


Air Force Jet

The War on Terror funded simultaneous conflicts in Iran and Afghanistan, as well as Homeland Security.

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WWII ships

The War on Terror cost 3x more than WWII, which was $4 billion in today's dollars.

The U.S. National Archives and Records Administration

The War on Terror was a reaction to the 9/11 attacks.

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

Answer: The War on Terror (WoT) was waged by the Bush Administration in response to the 9/11 terrorist attacks from al Qaida. The first strike was military action in Afghanistan to eliminate the threat from al Qaida's leader, Osama bin Laden. The Department of Homeland Security was also launched to consolidate and expand defense at home. The second strike was the War in Iraq, which had no connection to the 9/11 attacks. Here's the War on Terror costs by year, taken from the 2011 Congressional Budget Report and Federal government spending reports for each fiscal year since 2006.

War on Terror Spending During Bush Administration

This year by year spending only includes extra costs for the WoT, unless otherwise noted. For the years until 2006, the regular defense department budget and spending by other departments to support defense (such as the VA) aren't included in the totals. Even so, spending more than doubled from 2003 to 2008.

  • FY 2001 & 2002 - The Office of Homeland Security was opened to coordinate terrorism intelligence. Bush asked for $20.8 billion to launch the Afghanistan War in 2001, and $13 billion for enhanced security for military bases. The Taliban government was replaced with Hamid Karzai.   In October 2002, he received Congressional approval for the Iraq War. In November 2002, Congress passed the Homeland Security Act establishing a stand-alone, Cabinet-level department to unify 22 agencies that handled domestic security. Total = $33.8 billion.
  • FY 2003 - The U.S. launched the War in Iraq on March 19 with "Shock and Awe," costing $53 billion. The Hussein regime toppled in April. The U.S. spent $14.7 billion, even while it announced the War in Afghanistan was over, and NATO took over as a peacekeeping mission. Additional defense security spending was $13.5 billion. Homeland Security officially opened its doors in March. Total = $81.2 billion.
  • FY 2004 - The War in Iraq escalated to control insurgents, costing $75.9 billion. Photos revealed torture at the Abu Ghraib prison, further inciting insurgents. Afghanistan created a Constitution, while Bin Laden threatened another terrorist attack. The U.S. spent $14.5 billion on Afghanistan and $3.7 billion on enhanced security. Total = $94.1 billion.
  • FY 2005 - The Afghan War costs increased to $20.1 billion to protect Afghans from Taliban attacks for their first free election. Spending in Iraq increased to $85.5 billion, while extra security spending dropped to $2.1 billion. Total = $107.6 billion. 
  • FY 2006 - The War in Iraq escalated to $101.6 billion, Afghanistan dropped slightly to $19 billion, and security measures to $800 million. Total = $120.4 billion. That's on top of $474.2 billion for the Department of Defense
  • FY 2007 - Bush announced a "surge" of 20,000 additional U.S. troops to help transition power to Iraq leaders, boosting Iraq spending to a record $131.2 billion. The Afghan War spending nearly doubled, to $39.2 billion. Total = $170.9 billion PLUS $671.6 billion for the DoD base budget.
  • FY 2008 - Violence escalates in Afghanistan, boosting costs to $43.5 billion. Iraq costs rose to a new record, $142.1 billion. Total = $185.7 billion PLUS $549.6 billion for DoD.
  • FY 2009 - Obama sends 17,000 more troops to Afghanistan in April, promising to send another 30,000 in December. This boosts spending to $59.5 billion, while costs for fell for the first time to $95.5 billion. Total = $155.1 billion. That's in addition to $513 billion for the DoD base budget.

Between FY 2001 - FY2009, $850 billion was spent on the War on Terror alone. At the same time, the DoD base budget also grew. The Bush Administration did not separate out addition spending to support defense, such as 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 - The War in Iraq ended. Obama increased spending to $838 billion. It included $159.4 billion in contingency funds to beef up initiatives in Afghanistan and Pakistan. He announces he will withdraw 10,000 troops at the end of the calendar year (FY 2012).
  • 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.  He announced the withdrawal of another 20,000 troops in the summer, leaving left 70,000 troops remaining.  (Source: NYT, Afghanistan War Timeline, June 22, 2011) 
  • 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 War in Iraq lasted longer than the Vietnam War. More important,  4,488 U.S. soldiers were killed and 32,226 were wounded. More than $700 billion was spent on the Iraq War alone. (Source: ABC News, Final U.S. Troops Leave Iraq, March 19, 2013)

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 December 18, 2013

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