Monday, July 23, 2007

Forever Blowing Billions

Last week’s very shallow NIE Key Findings were reported-on for the most part in the now familiar cut and paste style; the Bush administration’s essential message that Al Qaeda is a present and growing threat was dutifully delivered just as the Democrats were trying to force the GOP to commit to a time frame to begin withdrawal from Iraq.

Absent from most of the coverage is the irony in that one of the purported justifications of the Iraq occupation was the “flypaper strategy” that would draw AQ to Iraq for US forces to then apprehend and destroy, thus making the world and the US a safer place, and yet after all the “leadership”, time, blood and treasure expended the situation is now apparently as bad (and rather, worse) than it was before.

Perhaps the MSM decided not to insult our intelligence by providing some damning critical context on account of it being too obvious, or perhaps they just forgot—for the millionth time.

But having put the same amount of effort into their reporting and analysis of the Key Findings as the Administration had in writing them the NIE received its two minutes of fame before the ADD kicked in once again,

You might be surprised to learn that another report came out last week, one just as important to national security and the pressing issue of Iraq, but which received even less attention than the NIE—that is to say practically none at all—despite it involving facts rather than conjecture, expenditure of huge amounts of money rather than broad opinions, and that this ignored report is considerably more substantial than the two-page Key Findings of the NIE and deserves some serious attention.

I am referring to the Congressional Research Services The Cost of Iraq, Afghanistan and Other GWOT Operations Since 9/11.

Now the good people at the CRS note that this report is not a formal audit of the DoD's financial records, but is instead a record and analysis based on whatever they could find and/or were provided-with by a variety of official sources (and they recommend a formal audit should be conducted).

The report provides quite an insight into some of the accounting practices of the DoD and the considerations that affect the management, measurement and reporting of their actions which are not particularly obvious to the lay person such as myself, so I’d recommend reading it yourself for its educational value and the informed perspective it provides.

But to whet your appetite here are some excerpts and observations:

“Of the $610 billion appropriated thus far [including the May 25 FY2007 Supplemental], CRS estimates that Iraq will receive about $450 billion (74%), OEF [Afghanistan and GWOT] about $127 billion (21%), and enhanced base security about $28 billion (5%), with about $5 billion that CRS cannot allocate (1%).
Of this total funding, 93% of the funds is for DOD, 7% for foreign aid programs and
embassy operations, and less than 1% for medical care for veterans."
[emphasis added]

By “cannot allocate” the CRS means that $5 billion is unaccounted-for or missing. Granted that’s chump-change compared to the overall expenditures—it may well be all stuck between the sofa cushionsin Rumsfeld's now vacated office---but that’s five times more than is being spent on veteran’s care which, it so happens, is apparently going to be reduced by $200 million next year (and, one could add that $5 billion to the $8 billion that Bremer of the CPA has still to account for).

“As of November 2006, DOD estimated that war-related obligations total $372 billion and average monthly obligations were about $10 billion including $8.6 billion for Iraq and $1.4 billion for Afghanistan. Although these figures capture DOD’s contractual obligations for pay, goods, and services, they do not give a complete picture because they do not capture all appropriated funds or all funds obligated. DOD acknowledges that these figures do not capture over $30 billion in classified activities.”

The budget of the clandestine services (CIA, NSA, SRO etc.) has, through some smart investigative work and the occasional slip-up by the government, been generally estimated at $30-40 billion a year coming out of the overall Defense budget for the past 25 years. But this paragraph suggests that the clandestine budget has been practically doubled, in a supplement under the cover of war-related obligations. Whilst I can appreciate that operational expenses would increase in this situation, it doesn’t seem like a doubling of the budget could be justified—especially given the non-existent results thus far.

“Based largely on DOD accounting reports, average monthly obligations grew from $6.2 billion to $8.8 billion, an increase of about 40% with the most rapid increase in Iraq. Monthly obligations for OEF have hovered around $1 billion a month while Iraq costs
increased from $4.4 billion to $7.4 billion in four years.”
“As of October and November 2006, obligations are running about $10 billion
a month with Iraq at $8.6 billion and Afghanistan at $1.4 billion”

Although the self-inflicted increase in oil-costs are obviously a factor, these figures also point in part to the attrition of expensive equipment which point to the fact that not only is the US making no headway, it is being bled to death—just as the Russians were in Afghanistan.
The report does note that the 2007 figure is now $12 billion a month for Iraq, which might be attributable to the “surge” though that would take the rough metric of the “cost per deployed soldier” of $390,000 per year for those already there to $685,704 per “surge” soldier (assuming $2 billion divided by 35,000 troops).
NOTE: I’d caution that my calculation here is simplistic and nothing to hang a really serious argument on, but as a generality based on a concomitant (and official) generality it makes the point of significant cost increases without any obvious return on investment.

“Although DOD has testified frequently and submitted various reports on Iraq
and the global war on terror, information and explanations of changes in the cost of
OIF and OEF have been limited, incomplete, and sometimes inconsistent.”
“CBO [Congressional Budget Office] pointed out that DOD’s justification materials have been sparse — for example, DOD provided five pages to justify $33 billion in operation and maintenance spending, about half of the FY2006 supplemental request.41”

Apparently the standards of justification for spending $33 billion federal dollars are less than those required to renew a driver’s license (5-6 pieces of documentation required).

Indeed the report provides numerous examples of the DoD’s inability to properly account for possibly up to $100 billion in funds, as well as its apparent utter lack of interest in even attempting to do so, since, it should be noted, September 11 2001.

“For FY2008, the Administration is requesting $141.7 billion for war
costs, somewhat less than in FY2007 but about 20% more than in FY2006.
Although the Administration classified both requests as emergency funds, much
of the funding would not seem to meet the traditional definition of emergency — as
an urgent and “unforeseen, unpredictable, and unanticipated” need — though defense
requests in the past have not been held to that standard.”57

But none of this apparently is of much interest to our MSM---the $400 haircuts of prospective presidential candidates grooming to look their best in front of television cameras are so much more interesting and relevant to the great unwashed than the largest government department’s atrocious accounting for multiple billions of taxpayer dollars being spent on causes they have no desire to support and from which they not only derive no benefit but by which they are impoverished and actually harmed.

I accept that some of the DoD's spending is bound to be discretionary and however well- intentioned some of it will lead to a dead-end. But it is pretty clear that that the DoD is taking as much advantage of the "state of war", and using the 'fog of war' to excuse itself when called to account by those who entrust their money to military management and national security.

This report, though mild in its criticism. illustrates how appaliingly badly run the US military really is in its finances and does nothing to promote the idea that despite its faults it is in any way the "finest in the world", let alone a servant of the public need and the public purse. It is above and beyond such rational and prosaic concerns. Nothing justifies a department of Defense so much as war, and nothing justifies its continuity and profligacy so much as the continuitin of war, regardless of the public's opposition.