Defense: Bush's $401.7 Billion Budget Omits War Expenses

For Immediate Release:

February 2, 2004

Contact:Niels C. Sorrells

CQ Staff

President Bush's $401.7 billion defense budget for fiscal 2005 is long on proposals to boost warfighting techniques, but nearly mute about the cost of the ongoing war in Iraq and Afghanistan.

The Pentagon's decision not to request any fiscal 2005 funding for those war operations makes it hard to get a handle on total Defense Department spending. Pentagon officials now say fiscal 2004 spending will total about $375.3 billion, a $6.1 billion reduction from earlier estimates because of the Pentagon's decision to forgo some funding from previous years.

But the revised fiscal 2004 total does not include $65.1 billion appropriated for wartime costs in the fiscal 2004 supplemental appropriations bill (PL 108-106). Once that money is factored in, the fiscal 2004 total reaches $440.4 billion.

Steven Kosiak of the Center for Strategic and Budgetary Assessments said that for comparison's sake, analysts need to assume the Pentagon will request between $30 billion and $50 billion for Iraq and Afghanistan operations, which could push the fiscal 2005 total to as high as $451.7 billion.

A senior Pentagon official said while such a request is likely, it probably will not come before early calendar 2005 because the Defense Department is unwilling to anticipate occupation costs far into the future when so much is now uncertain in those two countries. A delay would also push any further war funding requests beyond the November elections.

That uncertainty also calls into question whether the Pentagon will stay true to its long-term goals, which call for a budget request of $487.7 billion in fiscal 2009. As part of its proposal, the Pentagon seeks to expand a plan to outline its budget two years at a time in an effort to inject clarity into the budget process.

Renewed Quest for Flexibility

The Pentagon again is asking Congress for greater flexibility in spending. One likely legislative proposal would nearly double the amount of money the Pentagon can shift around without congressional oversight. For the last 10 years that figure has hovered at around $2 billion, but the new request would give the Defense Department flexibility over $4 billion.

Other proposals would provide Iraqi occupation forces with $300 million to disburse to local communities to kick start public works projects, a vital tool for building better relations. The Pentagon is expected to spend $340 million for such purposes this year, $160 million of which was seized from ousted Iraqi President Saddam Hussein and other Iraqi officials.

"This is the single most successful program we have in Iraq right now," a Pentagon official said. "This is the best way we tell the Iraqi people that we're not here to occupy them."

The proposals are scaled back from two years ago, when the Pentagon asked that Congress authorize and appropriate a $10 billion emergency fund with no strings attached — a request Congress rejected. Pentagon officials say that figure was based on their best guesses and ultimately proved to be about the right amount of money needed for operations in Afghanistan in fiscal 2003.

"When we laid down a marker, Congress did not give it to us," the Pentagon official said.

Troop Levels

Much of the new budget focuses on sustaining troop levels for ongoing operations. The proposal projects 1.38 million active-duty troops but makes no mention of maintaining the emergency deployments necessitated by the war operations. Pentagon officials have already stated that 30,000 additional troops are being deployed for the time being. Some of those are being held beyond their normal enlistment terms.

Pentagon officials have said they are worried about deteriorating morale if troops remain overextended. Part of the fiscal 2005 proposal calls for programs designed to reduce strains on the services by limiting how often reservists can be called to active duty. For example, the Pentagon will seek authority to make more use of reservists with needed skills, hopefully sparing those with less essential skills from regular call-ups.

Another plan would seek to hire more civilian workers for jobs currently performed by uniformed troops, theoretically freeing up as many as 10,000 soldiers for combat assignments.

The budget anticipates $104.8 billion for personnel costs.

Weapons Systems

No major weapons programs are scheduled for cancellation or cuts. The procurement budget would shrink from $81.1 billion to $74.9 billion, but much of that loss would be made up by a $4.6 billion jump to $68.9 billion in the research budget, which will absorb development of some shipbuilding programs.

Funding for missile defense programs would increase $1.2 billion to $10.2 billion, in anticipation of erecting 10 ground-based and five sea-based interceptors by the beginning of 2005.

The proposal would also add $632.9 million to unmanned aerial vehicle research and production, for a total of nearly $2 billion.

And the Future Combat System, a family of 20-ton fighting vehicles intended to replace the canceled Crusader howitzer system, would receive nearly $3.2 billion, a significant jump from the $370 million it received in fiscal 2003 and the $1.7 billion slated in fiscal 2004.

Anticipated expenditures for the Joint Strike Fighter are expected to rise $320.2 million, partially because a problem has necessitated building a heavier plane, which costs more money to construct.

The oft-disparaged Osprey aircraft, which faced strong criticism three years ago because of crashes that killed two dozen Marines, would be funded at $1.8 billion, with 11 of the planes scheduled to roll off the assembly line.

The shipbuilding budget would shrink $1 billion to $11.1 billion for nine new ships. But that is expected to grow to $21 billion and 17 ships by fiscal 2009, when production of a littoral combat ship (LCS) goes into high gear. The ship is designed to patrol coastal waters.

As an added bonus, the ship is only expected to cost about half a billion dollars per vessel, significantly cheaper than a destroyer or an aircraft carrier. That should allow the Navy to reach production goals. Lawmakers from shipbuilding states have expressed concerns that ships are not being built at a rapid enough rate, endangering the Navy's goal of maintaining a 300-ship fleet.

Base Construction, Closures

Other requests include $140.6 billion for operations and maintenance, $5.3 billion for military construction and $4.2 billion for family housing construction.

The budget also requests $500 million to allow the Pentagon to provide military and security force training in Iraq and Afghanistan. Another proposal would allow the Pentagon to transfer up to $200 million worth of weapons programs to Afghanistan.

At least two controversial programs are not expected to affect the fiscal 2005 budget. Although a round of base closings is slated for 2005, no costs are expected to be incurred until fiscal 2006. Lawmakers who fear losing bases in their districts will probably wage a last ditch effort this year to derail the planned closures.

Additionally, a proposal inserted into the fiscal 2004 defense authorization bill (PL 108-136) that would allow disabled military retirees to draw both their retirement benefits and Department of Veterans Affairs disability payments would draw money from mandatory accounts, not the Pentagon budget, which consists almost entirely of discretionary spending.

The Pentagon budget does not include an additional $20 billion in nuclear weapons programs managed by the Energy Department in a different account.