Shown in Table 1-3 of CBO’s Budget and Economic Outlook, January 2005.
An Alterative Budget Path Assuming Continued Spending for Military Operations in
Iraq and Afghanistan and in Support of the Global War on Terrorism1
CBO’s current baseline omits a significant amount of spending that will occur this year—and
conceivably for some time in the future—for U.S. military operations in Iraq and Afghanistan
and for other efforts in the war on terrorism. The statutory rules that govern such baseline
projections direct that discretionary spending should be projected by assuming that the most
recent year's discretionary budget authority is provided in each future year, with adjustments
to reflect projected inflation—using specified indexes—and other factors (such as the cost
of annualizing adjustments to federal pay). Because the discretionary budget authority for
fiscal year 2005 does not include funds for operations in Iraq and Afghanistan and the global
war on terrorism, only spending from funds already appropriated for those purposes is
included in the baseline projections.
To illustrate the potential effect on the deficit from continued spending for those military
activities, CBO estimated the budgetary impact of one possible scenario for future military
operations in Iraq and Afghanistan and the global war on terrorism. This scenario is one of
many possible scenarios regarding future spending for these activities and should not be
regarded as an estimate of actual war costs or a prediction of how much budget authority the
Department of Defense (DoD) will need or request for those activities in the future.
This scenario assumes that military operations in Iraq and Afghanistan and other activities
related to the global war on terrorism continue at their current levels during 2005 and 2006,
but decline after that. Under such assumptions, discretionary outlays over the 2005-2015
period would total $448 billion more than the baseline figures presented in CBO’s January
2005 Budget and Economic Outlook. (See table