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Siphoning of U.S. dollars to fund a war abroad looks at how funding the war in Iraq in hurting vital programs in the U.S.
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When Virginia Congressman Bobby Scott (D) thinks of all the money that's being poured into the Iraq war, it's enough to make him sick.

"We're making cuts that affect people who are most in need," says Scott, who in 1992 was elected as the first Black representative from Virginia since Reconstruction. "The [Iraq] war only makes matters worse."

As he vents about sky-rocketing war expenditures that will reach a whopping $400 billion this year, he points to the Bush administration's promise - which never materialized - that oil revenues from an occupied Iraq would cover the costs of battle.

Expensive Tradeoff

Specifically, Scott says, "we could have paid for 11 million 4-year scholarships... and provide insurance for more children." In fact, according to the National Priorities Project, which tries to shape federal budget and policy priorities that promote social and economic justice, the $244 billion already spent could have paid to insure another 146 million children. It also could have paid the salaries of 4 million new public school teachers or for 2.2 million new affordable houses.

Rep. William Jefferson (D-La.) looks at the cost of the war from a different perspective. He sees the war robbing America of vital human resources needed at home.

And he speaks from experience, having witnessed how stretched and strained resources were when the levees succumbed to Hurricane Katrina, and his New Orleans district was swallowed up by the flood.

"The state government would have had almost twice as many resources to get involved in the rescue and recovery operations had our troops not been deployed to Iraq," he says.

Exceeding Expectations

"We would have had greater manpower and better ability to coordinate on assigned missions with the Army. Our most seasoned troops were fighting the war. It wasn't just an issue of quantity, but we also could have used our best trained guardsmen and women here on the ground during those rescue missions."

By and large, the cost of the Iraq war will far exceed anyone's initial estimate. Columbia University economist Joseph E. Stiglitz and Harvard lecturer Linda Bilmes surmised earlier this year that it could top $2 trillion after factoring in long-term healthcare for wounded U.S. veterans, rebuilding a worn-down military, and accounting for other unforeseen bills and economic losses.

Margaret Simms, an analyst for the Joint Center for Economic and Political Studies, says there are also indirect costs of war, "which include our inability to take action on public issues of concern such as redressing poverty. There's very little room between the tax cuts and the growth in Medicaid and Medicare programs."

Rebuilding Suffers

The president talked about improving employment opportunities, reducing health care costs and restoring housing, Simms noted. But those improvements "will not be able to get done given the money available," she said. "The broader issue of poverty that extends beyond New Orleans we cannot address in the current budget environment."

Ironically, there are also fewer dollars at home for rebuilding levees, roads and bridges; for improving water quality in impoverished and flood-devastated areas; and for ensuring that the environment is cleaned up - the very things the president promised the citizens of Iraq as a benefit of American intervention.

In a recent BET News/CBS News poll, an overwhelming number of African Americans felt that money should be diverted from war to take care of problems here in the United States.

In his 2007 budget, President Bush proposed cuts of $456 million from the $4.3 billion budget of the U.S. Army Corps of Engineers, which is involved in public research, engineering and construction projects; disaster response; and environmental matters. He also proposed a $641 million cut in funding to the Environmental Protection Agency, which directly affects grants that go to states to improve the quality of water and air. 

While the Iraq War is not the only thing driving Congress to curtail spending for major infrastructure needs and essential programs such as Medicare, Medicaid, childcare and education, it is sucking money out of the economy, thus swelling an already humongous deficit and leaving fewer dollars available for those programs over the long haul.

The budget that Bush presented to Congress contains $40 billion in cuts to entitlement programs, which is achieved for the most part by reducing spending for Medicare, Medicaid, student loans and child care. It also includes a $30 billion tax cut that many analysts say unfairly benefits the wealthy.

Debt Contributors

Bush has also requested $72.4 billion to fight in Iraq and Afghanistan. That money, coupled with what he says he wants to spend to counter the devastation of Hurricane Katrina, are contributing to the record budget deficit, which will hit $423 billion this year.

But with a war on, and federal revenues unable to cover the rising costs of entitlement programs, let alone Bush's tax cuts, the government is faced with the classic economical 'guns or butter" dilemma: Does it pay more for national defense or social programs?

Right now, guns are winning out.  But analysts say the choice will have detrimental effects years after the last soldier leaves Iraq.

"Other issues ... that are becoming clear are some of the hidden costs," Simms says. "There's the strain caused not just by regular troops serving indefinitely, but by the calling up of the National Guard, people taken out of the home ... to participate in the war. The cost to society will also be the health consequences for those who are wounded but survive."

Howard University economist William Spriggs says the "working poor" can no longer afford to carry their children's insurance because they are on Medicare. "They're the ones who end up needing more, but the administration has not posed a real solution," he says. "The war, in and of itself, does not create the problem. The tax cut does. The war exacerbates it. You'd still need the reduction because tax cuts are so big."

But not all analysts agree that the government is shortchanging federal programs to pay for the war. Economist Walter Williams, of George Mason University, says the government does not have a constitutional mandate to fix societal problems, such as the healthcare crisis.  The cost of the Iraq War poses a broader question about national security, he says. 

"You could assume Saddam didn't have nuclear weapons and do nothing, and it turns out he did, or you could assume he did have weapons [and go to war] and it turns out he didn't. I think the error is more costly if he does have weapon and we assume he doesn't and we don't do anything. It's a tradeoff," Williams says.

Economic Benefits of Iraq War?

The Iraq war hasn't been an entire drag on the economy, some researchers point out. As the war machine geared up, weapons plants, like those in St. Louis, added more shifts. Reconstruction firms, such as Houston-based Halliburton, reported record profits, and defense contractors, such as Denver-based Lockheed Martin, reported an 18-percent increase in revenues.

But there's a down side to government military spending, others say.

"Every dollar of defense spending on Iraq is a dollar sucked out of the economy," says Chris Edwards, tax policy director for the Cato Institute.

"It creates jobs in the defense industry when we buy fighters from Lockheed for Iraq. But it destroys jobs somewhere else. When the federal government needs money, it raises taxes. Locked Martin hires more people [to build fighter jets], but because General Motors pays higher taxes, that means it has to lay off people. On that we lose"