CONGRESSIONAL BUDGET OFFICE
Douglas Holtz-Eakin, Director
Washington, DC 20515
June 25, 2004
Honorable Kent Conrad
Committee on the Budget
United States Senate
Washington, DC 20510
At your request, the Congressional Budget Office (CBO) has estimated the cost of the occupation
of Iraq and other operations associated with the global war on terrorism (GWOT) for fiscal year
2005. CBO has also projected the potential 10-year costs of such operations under three scenarios
that you specified.
Assuming that the force level and pace of operations associated with the occupation of Iraq and other
GWOT operations will remain at current levels throughout fiscal year 2005, CBO estimates that the
Department of Defense (DoD) will likely require $55 billion to $60 billion in new budget authority
to carry out those operations. If the disposition of forces or pace of operations were to differ from
the assumed levels, the cost of operations would, of course, change accordingly. The estimate
includes only the costs that DoD would incur above amounts budgeted for routine military
operations, and does not include the costs for reconstruction activities carried out by DoD or other
U.S. government agencies.
CBO’s estimate of such costs is uncertain for a number of reasons. DoD has provided little detail
on actual costs to date. Standard models and cost factors used by CBO in preparing its estimate,
though widely accepted, may not fully reflect the unique circumstances of each particular operation,
and those circumstances change over time. It is also difficult to estimate the costs that DoD will
attribute to those operations for support activities in the United States.
CBO’s past estimates of the cost of occupying Iraq and carrying out other GWOT operations have
generally been lower than the amounts requested and obligated by DoD for those activities. For
fiscal year 2004, DoD’s obligations are likely to exceed CBO’s estimate by more than 10 percent.
If a similar difference occurred i