October 28, 2003

Honorable John M. Spratt Jr.

Ranking Member

Committee on the Budget

U.S. House of Representatives

Washington, DC 20515

Dear Congressman:

In response to your request of October 9, 2003, the Congressional Budget

Office (CBO) has estimated the costs of four illustrative scenarios for the

occupation of Iraq. The scenarios are based on the specifications in your

request, as well as CBO’s current understanding of planned force-rotation

schedules. For the scenarios you outlined, CBO estimates the cost of

occupying Iraq could range from $85 billion to $200 billion over the 2004-

2013 period, depending on the size and length of the occupation. All estimates

assume the $52 billion requested by the Administration for the occupation of

Iraq in fiscal year 2004 will be provided without significant changes, as per the

instructions in your request. The estimates exclude costs associated with

reconstruction or classified intelligence activities, since we do not possess

enough data to appropriately quantify these costs. As requested by your staff,

the estimates also do not include costs associated with Operation Enduring

Freedom, Operation Noble Eagle, and other activities associated with the war

on terrorism. Details regarding CBO’s estimates are discussed below.

Estimates of Occupation Scenarios

CBO has estimated the cost of four illustrative scenarios for the occupation of

Iraq. The length of the occupation and force levels associated with each

scenario are based on the guidelines prescribed in your request letter.

Assumptions about air operations, force rotations, and the number of

mobilized reservists are based on the most recent data provided by the

Department of Defense (DoD), as well as CBO’s analysis of past contingency

operations.
Honorable John M. Spratt Jr.

Page 2

1. Congressional Budget Office, Letter to the Honorable Robert Byrd Regarding the U.S. Military’s Ability

to Sustain an Occupation of Iraq (September 3, 2003).

Scenario 1. Under this scenario, the size of the occupation force would

decline in a linear fashion from about 102,000 personnel in 2005 to about

50,000 personnel in fiscal year 2008 and then remain at that level through

2013. After accounting for the personnel involved in air operations, the

requirement to train reserve units before they deploy, and the need to use

reservists to fill administrative positions vacated by deployed active-duty

personnel (commonly called “backfill” within DoD), CBO estimates that the

actual number of personnel associated with the occupation of Iraq would total

about 138,000 in fiscal year 2005 and decrease to about 74,000 by fiscal year

2008. 

CBO estimates this option would require about $22 billion in budget authority

in 2005, declining to about $14 billion by 2008, after which the annual costs

would increase with inflation. Assuming enactment of the President’s request

for supplemental appropriations, the total budget requirement associated with

the occupation of Iraq under scenario 1 would be about $200 billion over the

2004-2013 period. (See Table 1 for year-by-year personnel levels and

estimated costs for each scenario.)

Scenario 2. Under this scenario, the size of the occupation force would

remain at about 106,000 personnel in fiscal years 2005 and 2006, and then

decline to about 64,000 by 2008. These levels are similar to those estimated

by CBO in a recent report on the ability of the military to sustain an occupation

in Iraq.1

 After 2008, forces would begin leaving Iraq so that all U.S. forces

would be withdrawn by the start of fiscal year 2011. After accounting for the

personnel involved in air operations, the requirement to train reserve units

before they deploy, and the need for reserve “backfill,” CBO estimates the

number of personnel associated with the occupation of Iraq would total about

145,000 in 2005, and decline to about 31,000 in fiscal year 2010. 

CBO estimates this option would require about $23 billion in budget authority

in 2005, decreasing to about $7 billion in 2010. Assuming enactment of the

supplemental appropriation request, the total budget requirement associated

with the occupation of Iraq under scenario 2 would be about $155 billion over

the 2004-2013 period.
Honorable John M. Spratt Jr.

Page 3

Scenario 3. Under this scenario, the size of the occupation force would

decline to about 76,000 personnel in fiscal year 2005, and then decline to about

64,000 in 2006. After 2006, forces would begin leaving Iraq so that all U.S.

forces would be withdrawn by the start of fiscal year 2009. After accounting

for the personnel involved in air operations, the requirement to train reserve

units before they deploy, and the need for reserve “backfill,” CBO estimates

the number of personnel associated with the occupation of Iraq would total

about 101,000 in 2005, and then decline to about 31,000 in fiscal year 2008.

CBO estimates this option would require about $16 billion in budget authority

in 2005, decreasing to about $7 billion in 2008. Assuming enactment of the

supplemental appropriation request, the total budget requirement associated

with the occupation of Iraq under this scenario would be about $100 billion

over the 2004-2013 period.

Scenario 4. Under this scenario, the size of the occupation force would

decline to about 76,000 personnel in fiscal year 2005, after which troops would

begin leaving Iraq so that all U.S. forces would be withdrawn by the start of

fiscal year 2008. After accounting for the personnel involved in air operations,

the requirement to train reserve units before they deploy, and the need for

reserve “backfill,” CBO estimates the number of personnel associated with the

occupation of Iraq under this scenario would be about 101,000 in 2005, and

decline to about 31,000 in fiscal year 2007. 

CBO estimates this option would require about $16 billion in budget authority

in 2005, decreasing to about $7 billion in 2007. Assuming enactment of the

supplemental appropriation request, the total budget requirement associated

with the occupation of Iraq under this scenario would be about $85 billion over

the 2004-2013 period.

Effect of Shortening the Phaseout Period

As requested, CBO also analyzed variations of scenarios 2, 3, and 4 in which

the phaseout of U.S. troops would be accomplished one year earlier. In each

of these variations, the number of personnel in Iraq would be 38,000 in 2009,

2007, and 2006 respectively for each of the scenarios, and then drop to zero by

the start of the next fiscal year (see Table 2). Shortening the phaseout period
Honorable John M. Spratt Jr.

Page 4

by a year in each of these scenarios would decrease the total budget

requirement over the 2004-2013 period by about $7 billion, so that the total

costs of scenarios 2, 3, and 4 would be $145 billion, $95 billion, and

$80 billion, respectively.

Your letter also requested that CBO reconcile the estimates of potential

occupation costs that it has made over the past year with DoD’s supplemental

request for 2004. As I stated in my testimony before the House Budget

Committee on October 16, 2003, CBO currently lacks sufficient information

to perform the reconciliation that you request. As promised at the hearing, I

have provided your staff a list of questions to which DoD would need to

provide answers in order for CBO to attempt to make an independent estimate

of potential occupation costs in fiscal year 2004.

If you would like further details on the information provided in this letter, we

would be pleased to provide them. The staff contacts are Matthew Schmit of

CBO’s Budget Analysis Division and Adam Talaber of CBO’s National

Security Division.

Sincerely,

Douglas Holtz-Eakin

Director

Enclosures

cc: Honorable Jim Nussle

Chairman
TABLE 1. PERSONNEL ASSUMPTIONS AND ESTIMATED COSTS OF IRAQ OCCUPATION SCENARIOS

(By fiscal year, personnel levels in thousands, estimated budget authority in billions of dollars)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

SCENARIO 1

Number of Personnel in Occupation Force a 102 84 67 50 50 50 50 50 50

Air Force and Additional Reserve Personnel b a 37 40 32 24 24 24 24 24 24

Total Personnel Requirement a 138 125 99 74 74 74 74 74 74

Estimated Budget Authority c 51.5 21.6 21.1 17.6 13.9 14.3 14.7 15.2 15.7 16.1

SCENARIO 2

Number of Personnel in Occupation Force a 106 106 76 64 38 19 0 0 0

Air Force and Additional Reserve Personnel a 39 46 32 28 19 12 0 0 0

Total Personnel Requirement a 145 152 108 92 57 31 0 0 0

Estimated Budget Authority 51.5 22.7 25.4 18.6 16.7 11.5 7.4 0 0 0

SCENARIO 3

Number of Personnel in Occupation Force a 76 64 38 19 0 0 0 0 0

Air Force and Additional Reserve Personnel a 25 28 19 12 0 0 0 0 0

Total Personnel Requirement a 101 92 57 31 0 0 0 0 0

Estimated Budget Authority 51.5 15.6 15.8 10.8 7.0 0 0 0 0 0

SCENARIO 4

Number of Personnel in Occupation Force a 76 38 19 0 0 0 0 0 0

Air Force and Additional Reserve Personnel a 25 19 12 0 0 0 0 0 0

Total Personnel Requirement a 101 57 31 0 0 0 0 0 0

Estimated Budget Authority 51.5 15.6 10.5 6.8 0 0 0 0 0 0

a. CBO does not have sufficient information to determine the occupation levels assumed in formulating the supplemental request.

b. Personnel level includes Air Force personnel deployed to support air operations, as well as additional reserve personnel needed

to perform administrative positions vacated by deployed active-duty personnel. It also includes reserve personnel in training

for deployment to Iraq.

c. Estimate for 2004 reflects the amount requested by the President in the September 2003 emergency supplemental request. The

total amount requested for the Department of Defense was about $65.6 billion, of which $14.1 billion would be for Operations

Enduring Freedom, Noble Eagle, and other activities not directly related to the occupation of Iraq.
TABLE 2. ALTERNATIVE PERSONNEL ASSUMPTIONS AND ESTIMATED COSTS OF IRAQ

OCCUPATION OPTIONS (EARLY PHASEOUT) (By fiscal year, personnel levels in thousands,

estimated budget authority in billions of dollars)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

SCENARIO 2 - ALTERNATIVE PHASEOUT

Number of Personnel in Occupation Force a 106 106 76 64 38 0 0 0 0

Air Force and Additional Reserve Personnel b a 39 46 32 28 19 0 0 0 0

Total Personnel Requirement a 145 152 108 92 57 0 0 0 0

Estimated Budget Authority c 51.5 22.7 25.4 18.6 16.7 11.5 0 0 0 0

SCENARIO 3 - ALTERNATIVE PHASEOUT

Number of Personnel in Occupation Force a 76 64 38 0 0 0 0 0 0

Air Force and Additional Reserve Personnel a 25 28 19 0 0 0 0 0 0

Total Personnel Requirement a 101 92 57 0 0 0 0 0 0

Estimated Budget Authority 51.5 15.6 15.8 10.8 0 0 0 0 0 0

SCENARIO 4 - ALTERNATIVE PHASEOUT

Number of Personnel in Occupation Force a 76 38 0 0 0 0 0 0 0

Air Force and Additional Reserve Personnel a 25 19 0 0 0 0 0 0 0

Total Personnel Requirement a 101 57 0 0 0 0 0 0 0

Estimated Budget Authority 51.5 15.6 10.5 0 0 0 0 0 0 0

a. CBO does not have sufficient information to determine the occupation levels assumed in formulating the supplemental request.

b. Personnel level includes Air Force personnel deployed to support air operations, as well as additional reserve personnel needed

to perform administrative positions vacated by deployed active-duty personnel. It also includes reserve personnel in training

for deployment to Iraq.

c. Estimate for 2004 reflects the amount requested by the President in the September 2003 emergency supplemental request. The

total amount requested for the Department of Defense was about $65.6 billion, of which $14.1 billion would be for Operations

Enduring Freedom, Noble Eagle, and other activities not directly related to the occupation of Iraq.