Image: Iraq
A U.S. soldier from the 4th Brigade of 11th Cavalry shouts an order to stop two Iraqi men on a motorcycle at a checkpoint on the edge of Baghdad Monday. About $66 billion of the $87 billion President Bush has requested will be to support military operations in Iraq.
By
CNBC
updated 10/16/2003 3:53:25 PM ET 2003-10-16T19:53:25

President Bush’s $87 billion request for additional funds to help fight the war in Iraq caught a lot of people on Capitol Hill off guard. It is nearly triple the amount Congress had expected — as is the military commitment of 130,000 troops on the ground. And that sparked a sharp debate Monday on whether the U.S. taxpayer should be asked to write that big a check.

Congress had already allocated $79 billion, so another $87 billion for Iraq and Afghanistan brings the total to $155 billion — so far. That’s equal to about 1.5 per cent of the nation’s Gross Domestic Product.

So how does that compare to previous wars? World War I cost $190 billion in 2002 dollars — or about 24 percent of the nation’s GDP. World War II cost $2.8 trillion — 130 percent of U.S. GDP over 4 years.

Korea cost 15 percent of GDP; Vietnam, 12 percent. And Gulf War I — about 1 percent — when the U.S. economy was smaller. And that war was authorized by the United Nations. So while the U.S. had a massive force on the ground, the rest of the world paid most of the bill. This time, however, the U.S. is going it alone.

So what will this war do to the nation’s projected deficit? According to the director of the Congressional Budget Office — not much, at least for now.

“Actually we caught a break,” said CBO director Douglas Holtz-Eakin. “The rules of constructing our budget forecast require us to put everything that’s on the books into the future as well. So last year we had $79 billion for Iraq, the president asked for $87 billion. We’re basically on the mark when we projected (a budget deficit of) $480 billion for 2004.”

That number is getting very close to half-a-billion dollars. And politically, that could be a problem for the Bush administration, which at the moment is promising both guns and butter with its tax cuts.

The Pentagon’s initial projections for the cost and troop needs in Iraq were so far off the mark, a 34-year veteran of Congress is now calling on President Bush to fire Defense Secretary Donald Rumsfeld and his deputy, Paul Wolfowitz.

“We need new faces and a new approach,” said Rep. David Obey, (D-Wisc.) “Otherwise I think it is going to be very difficult for the American people to swallow what the president is going to ask them to pay for — both in terms of treasure and blood over the next few years. Secondly, if we’re going to internationalize this situation so we can get other people to help pay the bills, we’re going to have someone dealing with them who hasn’t as recently as a few months ago said to either buy it our way or get out of the way because we didn’t need them. We’re in big trouble, and we have to find a way to pull this country together on this because we’re going to be in it for a long time.”

But Republican members of Congress say the country has little choice but to bear the cost of a war that they argue makes America safer.

“We’ve never faced a situation with the dimensions of this one ever in the history of our country,” said Rep. James Saxton (R-N.J.), a member of the House Armed Services Committee. “So as we move through this situation we’ll have to fashion our plan and our spending to meet the goals that exist and any given time.”

Of the $87 billion Bush is asking for, $66 billion will be used to support the military. Another $21 billion will be used to rebuild Iraq.

The administration would love to have other nations contribute money to the effort. But so far, no one has signed up.

© 2012 CNBC, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com