Iraq, Afghan war costs put at $1.5 trillion

WASHINGTON - The economic costs to the United States of the wars in Iraq and Afghanistan total about $1.5 trillion so far, according to a new congressional study that estimates the conflicts' "hidden costs" - including higher oil prices, the expense of treating wounded veterans, and interest payments on the money borrowed to pay for the conflicts.

That amount is nearly double the $804 billion the White House has spent or requested to wage these wars through 2008, according to the majority staff of Congress' Joint Economic Committee. Its report, titled "The Hidden Costs of the Iraq War," estimates that to date the wars in Iraq and Afghanistan have cost the average U.S. family of four more than $20,000.

"The full economic costs of the war to the American taxpayers and the overall U.S. economy go well beyond even the immense federal budget costs already reported," said the 21-page draft report, obtained yesterday by the Washington Post.

The report argues that war funding is diverting billions of dollars away from "productive investment" at home by U.S. businesses. It also says the conflicts are pulling reservists and National Guardsmen away from their jobs, resulting in economic disruptions for U.S. employers that the report estimates at $1 billion to $2 billion.

The study estimates that the cost to the average family could more than double, to $46,300, over the next 10 years, with estimated economic costs reaching $3.5 trillion if the wars continue apace.

The committee, which includes House and Senate members from both parties and is chaired by Sen. Charles E. Schumer (D., N.Y.), is expected to present the report this morning on Capitol Hill. Democratic leaders plan to use it as evidence that the wars are far costlier than most realize and that a change of course could save taxpayers billions of dollars in the next decade.

"What this report makes crystal clear is that the cost to our country in lives lost and dollars spent is tragically unacceptable," Schumer said in a statement last night.

Members of the committee's minority staff could not be reached for comment.

War-funding experts said that the committee had raised viable arguments but that some of the numbers should be met with skepticism. For example, it is difficult to calculate the precise effect of the Iraq war on global oil prices, and it is speculative to estimate how much the conflict will cost over time, as situations change daily on the battlefield.

Robert Hormats, vice chairman of Goldman Sachs (International) and a member of the National Security Council staff under Presidents Richard M. Nixon, Gerald R. Ford and Jimmy Carter, said that he agreed the war was far costlier than the publicly stated price tag, but that some of the report's calculations were problematic. He said he thought it would be difficult to show that the Iraq war had caused oil prices to skyrocket, and did not think there had been a closing-off of U.S. investment because of the war.

Oil prices have more than tripled since the U.S.-led invasion of Iraq in March 2003, the report notes, to a peak of more than $90 per barrel.

"The war in Iraq is certainly not responsible for all of this increase," it states, but it estimates that declining Iraqi production "has likely raised oil prices in the U.S. by between $4 and $5 a barrel."

Hormats, author of The Price of Liberty: Paying for America's Wars, said he agreed with the report's findings that the United States was dangerously increasing its reliance on foreign debt and that Americans would be paying the price for generations.

The committee said injuries attributed to the wars could add more than $30 billion in future disability and medical costs, including billions in lost earnings for veterans unable to work because of post-traumatic stress disorder.

World War II is estimated to have cost $4.9 trillion in today's dollars. According to Congressional Research Service reports, the Vietnam War cost $600 billion in today's dollars and the 1991 Persian Gulf war cost $80 billion.