1 See Congressional Budget Office, The Budget and Economic Outlook: An Update (August 2006) , Table 1-8, p. 18.
Additional Information About the Alternative Spending
Path for Military Operations in Iraq and Afghanistan and
for the War on Terrorism
September 22, 2006
The Congressional Budget Office’s (CBO’s) August 2006 baseline includes
spending of appropriations provided in fiscal year 2006 for U.S. military
operations in Iraq and Afghanistan and for other efforts in the war on terrorism.
As specified in the Balanced Budget and Emergency Deficit Control Act of 1985,
those 10-year baseline projections are based on the assumption that the current
year’s discretionary budget authority would be provided in each future year
through 2016, with adjustments to reflect projected inflation. Less funding would
be needed if the Department of Defense (DoD) was able to reduce the number of
In its recent report, The Budget and Economic Outlook: An Update (August
2006), CBO illustrated the potential effect that decreased spending for those
military activities could have on the deficit by presenting one possible alternative
scenario for future military operations in Iraq and Afghanistan and the war on
terrorism.1 The scenario, described in more detail here, is one of many possible
outcomes and should not be regarded as an estimate of actual war costs or a
prediction of how much budget authority DoD will need or request for those
activities in the future.
This alternative spending path assumes that military operations in Iraq and
Afghanistan and other activities related to the war on terrorism decline gradually
from their current levels, reaching a steady state after 2010. Under such
assumptions, discretionary outlays over the 2007-2016 period would be $716
billion less than the comparable baseline figures. If the baseline was otherwise
unchanged, projected interest on debt would be $129 billion less than the amount
in the current baseline.
In estimating the spending for this scenario, CBO assumed that the number