CONGRESSIONAL BUDGET OFFICE Douglas Holtz-Eakin, Director

U.S. Congress

Washington, DC 20515

www.cbo.gov

June 25, 2004

Honorable Kent Conrad

Ranking Member

Committee on the Budget

United States Senate

Washington, DC 20510

Dear Senator:

At your request, the Congressional Budget Office (CBO) has estimated the cost of the occupation

of Iraq and other operations associated with the global war on terrorism (GWOT) for fiscal year

2005. CBO has also projected the potential 10-year costs of such operations under three scenarios

that you specified.

Assuming that the force level and pace of operations associated with the occupation of Iraq and other

GWOT operations will remain at current levels throughout fiscal year 2005, CBO estimates that the

Department of Defense (DoD) will likely require $55 billion to $60 billion in new budget authority

to carry out those operations. If the disposition of forces or pace of operations were to differ from

the assumed levels, the cost of operations would, of course, change accordingly. The estimate

includes only the costs that DoD would incur above amounts budgeted for routine military

operations, and does not include the costs for reconstruction activities carried out by DoD or other

U.S. government agencies.

CBO’s estimate of such costs is uncertain for a number of reasons. DoD has provided little detail

on actual costs to date. Standard models and cost factors used by CBO in preparing its estimate,

though widely accepted, may not fully reflect the unique circumstances of each particular operation,

and those circumstances change over time. It is also difficult to estimate the costs that DoD will

attribute to those operations for support activities in the United States.

CBO’s past estimates of the cost of occupying Iraq and carrying out other GWOT operations have

generally been lower than the amounts requested and obligated by DoD for those activities. For

fiscal year 2004, DoD’s obligations are likely to exceed CBO’s estimate by more than 10 percent.

If a similar difference occurred in fiscal year 2005, costs in that year could be a bit more than $60

billion. On the other hand, the reported obligation data for 2004 may include one-time costs for

items such as base construction and procurement activities that will not be required in 2005. If so,

obligations in excess of CBO’s estimate would be less likely.

CBO also estimated the cost of three scenarios for the occupation of Iraq and GWOT operations

using assumptions about the length of each operation and force levels specified in your request letter.

Under the first scenario, the occupation force in Iraq would increase to 190,000 servicemembers for

the 2005-2006 period and then decline so that all U.S. forces would be removed from Iraq by 2009.

At that point, the only troops deployed overseas in support of the GWOT would be those stationed
Honorable Kent Conrad

Page 2

in and around Afghanistan. CBO estimates this scenario would require about $64 billion in budget

authority in 2005, declining to about $10 billion a year from 2009 through 2014. Budget authority

associated with this scenario would total about $266 billion over the 2005-2014 period.

Current force levels would be maintained in Iraq and other GWOT locations through 2006 under the

second scenario. After that, the force levels would gradually decline to a steady-state level of about

69,000 deployed personnel by fiscal year 2010. Budget authority required for scenario two would

total about $392 billion over the 2005-2014 period, CBO estimates.

Finally, the third scenario assumes that troop levels in Iraq would steadily decline beginning in

2005, so that by 2010 about 15,000 personnel would be deployed overseas in support of the GWOT.

CBO estimates that total budget authority under that scenario would total about $179 billion over

the 2005-2014 period.

The attachment to this letter provides additional detail about the cost estimates, including a

discussion of differences between CBO’s estimates and cost figures reported by DoD. If you wish

further details on this analysis, we would be pleased to provide them. The staff contacts are Matthew

Schmit and David Newman of CBO’s Budget Analysis Division (226-2840), and Adam Talaber of

CBO’s National Security Division (226-2900).

Sincerely,

Douglas Holtz-Eakin

Director
Honorable Kent Conrad

Page 3

Attachment

cc: Honorable Don Nickles

Chairman

Honorable Ted Stevens

Chairman

Senate Committee on Appropriations

Honorable Robert C. Byrd

Ranking Minority Member

Honorable John W. Warner

Chairman

Senate Committee on Armed Services

Honorable Carl Levin

Ranking Member

Honorable Jim Nussle

Chairman

House Committee on the Budget

Honorable John M. Spratt Jr.

Ranking Member

Honorable C. W. Bill Young

Chairman

House Committee on Appropriations

Honorable David R. Obey

Ranking Member

Honorable Duncan Hunter

Chairman

House Committee on Armed Services

Honorable Ike Skelton

Ranking Member

Estimated Costs of Continuing

Operations in Iraq and Other Operations

of the Global War on Terrorism

June 25, 2004

Congress of the United States

Congressional Budget Office

1. Operation Noble Eagle refers to domestic homeland security missions, such as combat air patrols over major metropolitan areas, undertaken

by DoD in response to the events of September 11, 2001. Operation Enduring Freedom includes military operations in and around Afghanistan

and other overseas counterterrorism activities (including activities in the Phillipines and Yemen).

Summary

At the request of Senator Conrad, the Congressional Budget Office (CBO) has estimated the costs

of military operations in Iraq and Afghanistan and other operations associated with the global war

on terrorism (GWOT) for fiscal year 2005. CBO has also projected the potential 10-year costs of

such operations under three scenarios that the Senator specified.

Assuming that the force level and pace of operations associated with the occupation of Iraq and other

GWOT operations will remain at current levels throughout fiscal year 2005, CBO estimates that the

Department of Defense (DoD) will likely require $55 billion to $60 billion in new budget authority

to carry out those operations. If the disposition of forces or pace of operations were to differ from

the assumed levels, the cost of operations would, of course, change accordingly. That estimate

encompasses the costs Operation Iraqi Freedom, Operation Noble Eagle, and Operation Enduring

Freedom. It includes only the costs that DoD would incur above amounts budgeted for routine 1

military operations, and does not include the costs for reconstruction activities carried out by DoD

or other U.S. government agencies.

CBO’s estimate of such costs is uncertain for a number of reasons. DoD has provided little detail

on actual costs to date. Standard models and cost factors used by CBO in preparing its estimate,

though widely accepted, may not fully reflect the unique circumstances of each particular operation,

and those circumstances change over time. It is also difficult to estimate the costs that DoD will

attribute to those operations for support activities in the United States. 

CBO’s past estimates of the cost of occupying Iraq and carrying out other GWOT operations have

generally been lower than the amounts requested and obligated by DoD for those activities. For

fiscal year 2004, DoD’s obligations are likely to exceed CBO’s estimate by more than 10 percent.

If a similar difference occurred in fiscal year 2005, costs in that year could be a bit more than

$60 billion. On the other hand, the reported obligation data for 2004 may include one-time costs for

items such as base construction and procurement activities that will not be required in 2005. If so,

obligations in excess of CBO’s estimate would be less likely.

CBO also estimated the cost of three scenarios for the occupation of Iraq and GWOT operations

using assumptions about the length of each operation and force levels specified in the request letter

from Senator Conrad. Under the first scenario, the occupation force in Iraq would increase to

190,000 servicemembers for the 2005-2006 period and then decline so that all U.S. forces would be

removed from Iraq by 2009. At that point, the only troops deployed overseas in support of the

GWOT would be those stationed in and around Afghanistan. CBO estimates this scenario would

require about $64 billion in budget authority in 2005, declining to about $10 billion a year from 2009

through 2014. Budget authority associated with this scenario would total about $266 billion over

the 2005-2014 period. 
2. Public Law 108-406, Making Emergency Supplemental Appropriations for Defense and for the Reconstruction of Iraq and

Afghanistan for the Fiscal Year Ending September 30, 2004, and for Other Purposes.

2

Current force levels would be maintained in Iraq and other GWOT locations through 2006 under the

second scenario. After that, the force levels would gradually decline to a steady-state level of about

69,000 deployed personnel by fiscal year 2010. Budget authority required for scenario two would

total about $392 billion over the 2005-2014 period, CBO estimates. 

Finally, the third scenario assumes that troop levels in Iraq would steadily decline beginning in

2005, so that by 2010 about 15,000 personnel would be deployed overseas in support of the GWOT.

CBO estimates that budget authority under that scenario would total about $179 billion over the

2005-2014 period.

Obligations Through March 2004 For Operation Iraqi Freedom and the Global

War on Terrorism

Through March 2004, the Department of Defense had obligated $114 billion for Operation Iraqi

Freedom and the other GWOT operations in the two and one-half years since September 11, 2001

(see Table 1). Data on obligations come from cost reports prepared by the Defense Finance and

Accounting Service (DFAS). The reports present the obligations broken down by major operation

(Iraqi Freedom, Enduring Freedom, Noble Eagle) and service (Army, Navy, Air Force, Marines, and

Defense Agencies). Obligations for Operation Iraqi Freedom constitute the largest fraction of the

obligations to date—$71 billion. After comparing the obligations presented in these reports with

funding provided by the Congress to date, CBO estimates that of the funding provided to DoD in

supplemental appropriations for 2004, approximately $28 billion remains unobligated as of March

2004. Assuming those remaining funds are obligated during this fiscal year, obligations for these 2

operations will total $64 billion in fiscal year 2004 and almost $142 billion cumulatively since

September 11, 2001. 

The figures discussed above and presented in Table 1 exclude obligations for certain classified

activities, which are not included in the DFAS reports, and obligations of funds for reconstruction

activities administered by other executive branch agencies. Based on language in appropriations acts

for 2002, 2003, and 2004 and information contained in briefings from DoD, CBO estimates that the

Congress has appropriated at least $10 billion for classified activities since September 11, 2001, but

CBO does not know how much has been obligated for those purposes. Amounts appropriated for

reconstruction activities in Iraq and Afghanistan have so far totaled about $24 billion.

Estimate for Fiscal Year 2005

Assuming that the force levels and pace of operations associated with the occupation of Iraq and

other GWOT operations will remain at current levels throughout fiscal year 2005, CBO estimates
3

TABLE 1. OBLIGATIONS BY THE DEPARTMENT OF DEFENSE FOR OPERATIONS IN IRAQ AND THE

GLOBAL WAR ON TERRORISM (In billions of dollars, by fiscal year)

2002 2003

2004

(Through

March) a

Remainder

of

2004

(Estimated)

Total

Through

End

of 2004

(Estimated) b

Iraqi Freedom n.a. 42.4 28.9 22.4 93.7 c

Noble Eagle 5.7 6.3 2.3 1.7 16.0 d

Enduring Freedom 11.0 12.3 4.8 3.7 31.8 e

Total 16.6 61.0 36.0 27.8 141.5

SOURCE: Congressional Budget Office based on data from the Department of Defense.

NOTES: Numbers may not add to totals because of rounding.

Does not include obligations for classified activities or reconstruction.

n.a.= not applicable.

a. Due to a two-month lag in processing the data, March is the last month for which data is available from DoD. Of the amounts obligated in fiscal

year 2004, about $32 billion is from 2004 appropriations, with the remainder coming from funds appropriated for 2003, mainly to cover the

cost of procurement and other force “reconstitution” activities necessitated by operations in that year.

b. Based on amounts appropriated for 2004, CBO estimates DoD had approximately $28 billion available for obligation at the end March, not

including funds appropriated for classified activities. For purposes of this analysis, CBO assumes the remaining $28 billion will be obligated

before the end of fiscal year 2004.

c. Operation Iraqi Freedom refers to military operations in and around Iraq.

d. Operation Noble Eagle refers to domestic homeland security missions such as combat air patrols over major metropolitan areas, undertaken

by DoD in response to the events of September 11, 2001.

e. Operation Enduring Freedom includes military operations in and around Afghanistan and other overseas counterterrorism activities.

that DoD will likely require $55 billion to $60 billion in budget authority for that year to continue

the occupation of Iraq and other GWOT operations during that year. The detailed components of

that estimate are shown in Table 2; they sum to about $56 billion. CBO’s estimate represents the

incremental amount that DoD would incur above the budgeted cost of routine operations. For

instance, the estimate excludes items such as basic pay for active-duty military personnel but

includes the monthly pay of reservists recalled to full-time duty. The exception is basic pay for

active-duty personnel in excess of the current authorized endstrength level, which is included

because those personnel are being retained in the military as a direct result of overseas operations

and DoD has been compensating them mostly with supplemental appropriations.
4

TABLE 2. ESTIMATED COST OF OCCUPATION OF IRAQ AND GLOBAL WAR ON TERRORISM FOR

FISCAL YEAR 2005 ASSUMING CURRENT LEVELS OF ACTIVITY AND FORCE LEVELS (In

billions of dollars)

Noble Eagle a

Enduring

Freedom b

Iraqi 

Freedom Undistributed Total c d

Personnel 2.8 0.8 8.3 5.1 17.0 e

Personnel Support 0.6 0.3 2.0 2.3 5.2 f

Operations Support 0.4 2.6 21.2 0.2 24.4 g

Transportation 0 0.9 3.6 0 4.5 h

Classified and Coalition Support 0 i i 5.0 5.0 i

Total 3.8 4.5 35.1 12.7 56.1

SOURCE: Congressional Budget Office.

NOTE: Totals may not add to totals because of rounding.

a. Noble Eagle refers to domestic homeland security missions, such as combat air patrols over major metropolitan areas, undertaken by DoD in

response to the events of September 11, 2001.

b. Operation Enduring Freedom includes military operations in and around Afghanistan and other overseas counterterrorism activities.

c. Operation Iraqi Freedom refers to military operations in and around Iraq.

d. Includes the cost of mobilized reservists supporting the various operations from the continental United States as well as the cost of maintaining

the number of active-duty troops above current authorized levels.

e. “Personnel” includes pay for reserve personnel called to active duty as well as special payments, such as hazardous duty pay, for both reserve

and active-duty personnel. The category also covers the cost of subsistence items, such as food and water. CBO’s estimate also includes basic

pay for those active-duty personnel above current authorized endstrength levels.

f. “Personnel support” includes clothing and personal items as well as medical support. For purposes of this estimate, it also includes some

operations and maintenance costs associated with maintaining active-duty troop levels above the authorized endstrength.

g. This category includes all incremental costs related to the operation and maintenance of air, land, and sea forces involved in overseas

contingency operations. It includes costs such as fuel consumption and repair parts. Operations support also includes the costs of equipping

and maintaining ground troops and equipment, as well as the costs associated with command, control, communications, and intelligence. In

addition, the category covers force reconstitution, which includes the replacement of munitions stocks and repair or replacement of damaged

equipment, and the incremental cost of increased depot maintenance for items such as aircraft, tanks, and ships.

h. “Transportation” includes the cost of moving personnel and equipment to the theater of operations from the continental United States and from

bases around the globe.

i. CBO does not have enough information to make an independent estimate of the cost of coalition support or classified activities, or to allocate

such costs between Operations Enduring Freedom and Iraqi Freedom. The number displayed for these activities is based on amounts requested

and appropriated for those purposes over the past several years and is shown in the “undistributed” category.

Of the estimated amount, at least $35 billion will be required for Iraqi Freedom, and about $4 billion

and $5 billion will be required for Operation Noble Eagle and Operation Enduring Freedom,

respectively. CBO also estimates costs of about $13 billion for a category labeled “undistributed.”

This category includes the costs for mobilized reservists stationed in the United States who are

tasked with supporting Operation Iraqi Freedom and Operation Enduring Freedom and the cost to
3. Coalition support refers to logistics activities performed by the U.S. military in support of multinational forces serving in Iraq and Afghanistan,

as well as reimbursements to key cooperating nations and coalition partners for the use of airstrips and other assistance.

4. CBO excluded costs associated with classified activities in its previous published estimates of the cost of continuing operations in Iraq and

Afghanistan because CBO did not have enough information to assess these costs. The $5 billion for classified activities and coalition support

in this projection is a rough estimate of requirements based on amounts appropriated for those purposes in 2003 and 2004. Although CBO still

lacks data to perform an independent assessment of those costs, it has included the $5 billion to make the estimate for 2005 more comparable

to a future request for supplemental appropriations.

5

maintain active-duty forces above authorized endstrength levels. CBO includes those costs in an

“undistributed” category because it lacks the information needed to allocate the personnel and costs

to each operation. Within the “undistributed” category, CBO also includes $5 billion for certain

classified activities and coalition support. That estimate is based on amounts appropriated for those 3

purposes in previous years.

4

Allocating costs among the various military services is difficult because all of them provide some

form of support for all aspects of Operation Iraqi Freedom and the other GWOT operations. CBO

expects that about three-quarters of the budget authority required for 2005 will be needed to sustain

ground operations(primarily the Army and Marine Corps), and the remainder will be needed for air

and sea operations, classified activities, and coalition support.

Estimating Force Levels

CBO’s assumption that the force level and pace of operations associated with the occupation of Iraq

and the GWOT will remain at current levels through 2005 is consistent with DoD’s recently

announced plans for those operations. If the size of the forces deployed overseas were to change,

the cost of operations could be significantly different from the estimates presented here.

DoD published a rotation plan in the fall of 2003 that envisioned the majority of U.S. forces in Iraq

being replaced by a smaller number of forces between January and April 2004. However, in April,

the U.S. Central Command requested permission to extend the tours of some units that had been

scheduled to leave Iraq, and DoD is now preparing to deploy additional units to Iraq (to replace the

units whose tours were extended). The effect of these decisions has been to reverse the planned

reduction and maintain the January 2004 force level for the indefinite future.

To date, DoD has not provided CBO with detailed information about the size of the force supporting

the occupation of Iraq and the GWOT. However, based on information from various sources, CBO

estimates that U.S. forces deployed overseas for these operations will average about 129,000 activeduty personnel and about 51,000 reserve-component personnel in 2005. About 127,000 reservecomponent personnel will be mobilized in support of these operations (including the reservists who
5. Recent data from DoD puts the current number of mobilized reservists at about 160,000. CBO estimates that about 35,000 reserve-component

personnel are routinely mobilized during peacetime and that those personnel should not be included in the incremental costs of the occupation

of Iraq and the GWOT. The 35,000 peacetime mobilization figure should drop down to about 30,000 once U.S. commitments in Bosnia have

ended.

6. For its estimates, CBO assumed all Army and Marine Corps forces deployed overseas in support of operations Iraqi Freedom and Enduring

Freedom will be replaced by fresh troops once a year and Air Force units will be replaced every three months.

7. In addition, about 20,000 personnel will be deployed for Operation Enduring Freedom, bringing the total number of personnel deployed overseas

to about 180,000.

6

will be deployed). In addition, CBO estimates the active components of the services will be about 5

38,000 personnel above their currently authorized endstrength levels in 2005.

To estimate the size of the forces that are likely to be involved in Operation Iraqi Freedom and other

operations, CBO tracks the major combat units (divisions and brigades) that are deployed or

scheduled for deployment in DoD’s rotation plans. However, the personnel in these major units

represent only a portion of the troops that will be involved in military operations, requiring CBO to

estimate other relevant categories of personnel. These other categories include troops deployed to

the theater to support the combat divisions and brigades, reserve-component personnel training in

preparation for deployment, and reserve personnel mobilized to fill in for deployed active-component

units.

Published accounts of the number of personnel involved in Operation Iraqi Freedom often include

only the number of military personnel in Iraq itself. However, large numbers of support personnel

are associated with this operation, including those at Army logistics and maintenance facilities in

Kuwait and those at Air Force bases throughout the Persian Gulf. Consequently, CBO’s estimates

of the number of personnel deployed to Operation Iraqi Freedom are generally larger than many

published reports of the size of the force in Iraq. For example, DoD has recently decided to maintain

(rather than reduce) the current force levels in Iraq through the second (and possibly third) rotation.6

CBO estimates that this plan will involve maintaining a deployed force of over 160,000 personnel

in the Persian Gulf region, although only 135,000 of those personnel will actually be in Iraq. 7

Not all of the mobilized reserve-component personnel will be deployed overseas. Some will be

engaged in Operation Noble Eagle, and will remain within the United States. Others will remain in

the United States in support of Operations Enduring Freedom and Iraqi Freedom. Also, most

mobilized reserve units will spend some period of time training before they deploy. Thus, the

number of reserve-component personnel deployed overseas in support of Operation Enduring

Freedom and Operation Iraqi Freedom will always be smaller than the total number of mobilized

reserve-component personnel.

Estimating Methodology

CBO estimated costs in five categories: personnel, personnel support, operations support,

transportation, and classified activities/coalition support. The costs of personnel, which account for
7

30 percent of the estimated cost, include the pay for reserve personnel called to active duty, as well

as special payments, such as hazardous-duty pay, for both reserve and active-duty personnel. They

also include costs associated with providing food and water. In addition, the personnel category

includes the cost for basic pay associated with keeping the level of active-duty forces above

authorized endstrength levels. Personnel support, estimated to total about $5 billion, includes the

costs of clothing, medical care, and other similar items. It also includes support costs associated with

maintaining active duty forces above authorized endstrength levels.

Operations support, at 44 percent, is the largest component of the estimate. It includes the

incremental costs related to the operation and maintenance of air, land, and sea forces involved in

these operations. It also includes the cost of contracts with companies like Kellogg, Brown, and

Root for logistics support, base support, and other services, as well as the cost to buy replacement

equipment for units returning from these overseas operations. The fourth category—

transportation—includes the cost of moving personnel and equipment between the United States and

the various theaters of operation as well as moves within each theater. CBO estimates transportation

costs will total about $5 billion for fiscal year 2005. Finally, as noted above, CBO included

$5 billion for classified activities and coalition support.

CBO used data from a variety of sources to prepare its estimate. Estimates for personnel and

personnel support are based primarily on cost factors developed by the Institute for Defense

Analyses. CBO adjusted those factors to account for pay raises, changes in special payments, and

inflation. Estimates for the operation of equipment, command and control, and some support

services are based largely on data from operations and support cost models developed by the Army,

adjusted for the pace of operations and the impact of the desert climate. CBO estimated most of the

costs for facilities and logistics support using obligations and planning data (April 2004) from DoD

for relevant logistics support contracts. Estimates for equipment procurement are based on CBO’s

analysis of procurement spending associated with previous overseas operations. Finally, the

estimates for transportation costs are based on data provided by the United States Transportation

Command.

Except for a few instances, CBO did not use the data reported by DFAS on 2004 obligations in

preparing the estimate of 2005 costs. Obligations for Operation Iraqi Freedom and the other GWOT

operations vary widely from month to month, making it difficult to discern trends. Those data

provide no information about the pace of operations or the force levels underpinning those costs,

nor do they segregate one-time costs from recurring or day-to-day costs. Some obligations are

recorded months after the actual activity occurred because of the time needed to establish proper

billing and reimbursement. Without more detailed information, it is difficult, if not impossible, to

use the reported obligations to estimate future costs. For example, the cost data reported for 2004

show significant obligations for equipment procurement and base support. CBO believes that many

of those activities are one-time in nature and will not require additional resources in 2005.
8. Congressional Budget Office, Letter to the Honorable John M. Spratt Jr. Regarding the Estimated Costs for the Occupation of Iraq

(October 28, 2003).

8

Comparison to Previous CBO Estimates and Other Data

On October 28, 2003, CBO transmitted a letter to the Honorable John M. Spratt Jr. in which it

estimated that maintaining an occupation force of 106,000 military personnel in Iraq would cost

about $23 billion in 2005. The cost estimates presented in this analysis are substantially higher than 8

that October estimate for several reasons. First, the estimate done for Congressman Spratt included

only costs associated with Operation Iraqi Freedom, whereas the estimate in this report also includes

the costs of Operations Enduring Freedom and Noble Eagle. Second, it now appears the size of the

occupation force in Iraq in 2005 will be more than 50 percent larger than the 106,000 hypothesized

last October. Finally, CBO has refined or reevaluated some of the methodologies used to estimate

the costs of these operations.

Even with the recent refinements in estimating methodologies, those methods produce estimates for

fiscal year 2004 that are lower than DoD’s reported obligations for Operations Iraqi Freedom,

Enduring Freedom, and Noble Eagle. It appears that, in 2004, DoD will obligate almost all of the

$65 billion appropriated for those three operations. By comparison, CBO’s methodologies and

assumptions produce a point estimate of about $57 billion, 12 percent below the expected obligations

from 2004 appropriations. It is therefore possible that DoD’s obligations in fiscal year 2005 for

those three operations could exceed CBO’s point estimate of $56 billion by several billion dollars.

On the other hand, the 2004 obligations may include one-time costs for base construction and

procurement that would not be required in 2005, making obligations in excess of CBO’s point

estimate less likely.

With only limited information from DoD, CBO has not been able to identify the specific reasons for

that difference. They appear to be concentrated in two areas: 

• With regard to the individual services, CBO’s estimate of the costs for naval operations is

noticeably lower than the obligations reported by DFAS. According to those reports, the

Navy obligated about $1.9 billion from 2004 appropriations for Operations Iraqi Freedom,

Enduring Freedom, and Noble Eagle through March 2004. In contrast, CBO’s estimate for

that period is less than $500 million, reflecting the fact that Operations Iraqi Freedom and

Enduring Freedom are primarily ground operations and that most of the Navy’s deployments

to the region would occur under its budgeted peacetime activities. Obligations for the Navy

probably include about $600 million in transportation and logistics costs related to the

deployment of Marine Corps forces that CBO includes elsewhere—in its estimate for ground

operations. That amount would not explain all of the difference, however.

• With regard to the different types of spending, the largest difference occurs in the operations

support category. CBO estimates that such costs will total about $25 billion for fiscal year

2004, but it appears that DoD will obligate more than $30 billion for operations support
9. With regard to the specific operations, DoD is attributing substantially more costs to Operation Enduring Freedom than CBO estimates. This

discrepancy may result primarily from CBO’s allocation of certain costs to the “undistributed” category–including the cost of support personnel

in the United States and the cost of maintaining active forces above authorized endstrength levels. Information from DoD indicates that the

department is attributing the costs associated with as many as 35,000 of these support personnel to Operation Enduring Freedom. CBO also

believes that, at one point, the services were allocating all costs for over-endstrength personnel to that operation. These allocation differences,

however, would not account for the differing estimates of total costs.

9

(including procurement). Much of CBO’s estimate for this category of spending is based on

cost models developed by the Army, adjusted by CBO to reflect these particular operations

and the conditions under which they are conducted, but the results of those models have been

falling short of the actual obligations that DoD has attributed to the three operations.9

Although differences occur for most elements of cost within operations support, the largest

difference appears to be in the category that DoD calls “other services and miscellaneous

contracts.” Through March 2004, obligationsfor this category totaled over $3 billion, while

CBO’s estimate for 2004 totals less than $500 million. The reported obligations for this

category may include costs that CBO includes under other categories, such as “facilities and

base support” and “transportation,” but CBO cannot be certain without more information

from the department.

Some observers have indicated that the tenuous security situation in Iraq has led to an unexpected

increase in the pace of operations (also known as operational tempo), and that this has led to

increased costs for such things as spare parts, fuel, and ammunition. However, most costs for

overseas operations such as Iraqi Freedom are associated with personnel compensation and base

support, which are not usually correlated with the pace of operations. According to DoD reports

(and in CBO’s estimate), the costs associated with operational tempo comprise only about 10 percent

of the total obligations to date for Operation Iraqi Freedom and the other operations associated with

the GWOT. 

Estimates of Occupation Scenarios

CBO has estimated the 10-year cost of three scenarios for the occupation of Iraq and GWOT

operations using assumptions about the length of each operation and force levels specified by

Senator Conrad. Those scenarios involve future costs for Operation Iraqi Freedom as low as

$52 billion and as high as $233 billion over the next 10 years (excluding some costs that cannot be

allocated to specific operations). Other costs—for Noble Eagle, Enduring Freedom, classified

activities, coalition support, and activities that cannot be allocated to specific operations—would add

another $130 billion to $160 billion over the 2005-2014 period.

Assumptions about air operations, force rotations, and the number of reservists mobilized are based

on the most recent data provided by DoD, as well as an analysis of past contingency operations. The

cost estimates were done using the methodologies that CBO applied in developing its estimate for

2005. They include costs for classified activities and coalition support based on prior-year

appropriations but do not include costs associated with reconstruction activities.
10. CBO addressed the issue of how the occupation could strain U.S. military forces in An Analysis of the U.S. Military’s Ability to Sustain an

Occupation of Iraq, September 2003. 

10

The costs for each of the three scenarios vary based on the assumptions made about the length and

force levels associated with Operation Iraqi Freedom. All scenarios assume operations in

Afghanistan will remain at current levels throughout the 2005-2014 period and that activities

associated with Operation Noble Eagle will decrease to half the current level by 2009.

Scenario One. Under this scenario, the occupation force in and around Iraq would increase from

the current level of 160,000 personnel to about 190,000 in fiscal years 2005 and 2006, and then

decline steadily so that all forces would be out of the Iraq theater of operations by the beginning of

fiscal year 2009. This scenario assumes that a total of 212,000 militarypersonnel would be deployed

overseas in 2005, with an additional 84,000 reservists supporting operations from the United States.

Once all forces left Iraq, about 15,000 personnel would be deployed overseas in support of the

GWOT, with an additional 18,000 reservists mobilized in support. CBO estimates that this option

would require about $64 billion in budget authority in 2005, declining to just over $9 billion by

2010, after which the annual costs would increase with inflation. Budget authority associated with

the occupation of Iraq and the GWOT under this scenario would total about $266 billion over the

2005-2014 period. (See Table 3 for year-by-year personnel levels andTable 4 for the estimated costs

for each scenario.)

The size of the force in and around Iraq described in this scenario would be well above the number

of personnel that CBO’s previous analysis indicates would be sustainable over the long term.

10

Under this scenario, all of the Marine Corps’ and the Army’s major active component combat units

would be fully committed and would be deployed overseas more than six months out of every year.

All of the Army National Guard’s Enhanced Separate Brigades would likely be mobilized and

deployed as well. Since units require some time after returning from a deployment to recover (to

allow personnel to take leave, perform maintenance on equipment, and to retrain and requalify in

skills they may not have used while deployed), this scenario would leave the United States with only

a minimal number of available combat units to respond quickly to unforeseen contingencies over the

2005-2006 period.

Scenario Two. Under this scenario, the size of the force in the Iraq theater of operations would

remain at current levels (which CBO estimates at about 160,000 personnel) through fiscal years 2005

and 2006 and then decline to a steady-state level of about 54,000 personnel by 2010, which would

then remain in and around Iraq indefinitely. This scenario assumes that a total of 180,000 military

personnel would be deployed overseas in 2005, with an additional 76,000 reservists supporting

operations from the United States. After the drawdown of forces in Iraq, about 69,000 personnel

would be deployed overseas in support of the GWOT, with an additional 38,000 reservists in

support. CBO estimates this option would require about $56 billion in budget authority in 2005,

declining to about $28 billion by 2010, after which the costs would increase with inflation. Budget

authority associated with the occupation of Iraq and the GWOT under this scenario would total about

$392 billion over the 2005-2014 period.
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TABLE 3. PERSONNEL ASSUMPTIONS USED IN ESTIMATING FUTURE COSTS OF THE

OCCUPATION OF IRAQ AND THE GLOBAL WAR ON TERRORISM

(In thousands, by fiscal year)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Scenario One

Deployed Active Duty 146 147 116 41 12

a

12 12 12 12 12

Deployed Reserves 66 67 48 12 3 3 3 3 3 3

Other Mobilized Reserves 84 100 78 35 18 18 18 18 18 18 b

Active Over Endstrength 38 34 30 20 10 0 0 0 0 0

Scenario Two

Deployed Active Duty 129 129 106 96 67 48 48 48 48 48

Deployed Reserves 51 51 43 39 28 21 21 21 21 21

Other Mobilized Reserves 76 86 72 64 47 38 38 38 38 38

Active Over Endstrength 38 34 30 20 10 0 0 0 0 0

Scenario Three

Deployed Active Duty 74 61 40 27 12

a

12 12 12 12 12

Deployed Reserves 28 25 17 10 3 3 3 3 3 3

Other Mobilized Reserves 55 54 40 30 18 18 18 18 18 18

Active Over Endstrength 38 34 30 20 10 0 0 0 0 0

SOURCE: Congressional Budget Office based on scenarios specified by Senator Conrad.

a. In scenarios one and three, all troops would be out of the Iraq theater of operations by 2009. However, troops would still be mobilized and

deployed in support of operations Noble Eagle (domestic homeland security) and Enduring Freedom (Afghanistan).

b. Other mobilized reserves include those performing duties in the United States as well as those in training for future deployment overseas.

Maintaining the current size of the force in the Iraqi theater for two more years, as assumed in this

scenario, would require personnel levels that could not be sustained without raising concerns about

adverse effects on U.S. forces (such as personnel retention and the ability to conduct training).

Under this scenario, the force levels in Iraq would begin to decline after two years to a level that

could be sustained using only active component Army combat forces. (Army National Guard and

Marine Corps forces would no longer be required for combat or peacekeeping operations in Iraq,

although National Guard units would still be needed for support activities.)

Scenario Three. Under this scenario, the occupation force in Iraq would decrease to about 84,000

personnel in fiscal year 2005 and continue to decrease so that all forces would be out of the Iraq

theater of operations by the beginning of fiscal year 2009. This scenario assumes that a total of

102,000 military personnel would be deployed overseas in 2005, with an additional 55,000 reservists

supporting operations from the United States. Once all forces left Iraq, about 15,000 personnel

would be deployed overseas in support of the GWOT, with an additional 18,000 reservists in

support. CBO estimates this option would require about $38 billion in budget authority in 2005,
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declining to just over $9 billion by 2010, after which the costs would increase with inflation. Budget

authority associated with the occupation ofIraq and the GWOT under this scenario would total about

$179 billion over the 2005-2014 period.

TABLE 4. COST ESTIMATES FOR THREE POTENTIAL SCENARIOS FOR THE OCCUPATION OF IRAQ AND THE

GLOBAL WAR ON TERRORISM FOR FISCAL YEARS 2005 THROUGH 2014 (In billions of dollars)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

 2005-

2014 

Scenario One

Iraqi Freedom 42 44 35 10 0 0 0 0 0 0 131 a

Noble Eagle 4 3 3 3 2 2 2 2 2 3 27 b

Enduring Freedom 5 5 4 4 4 4 4 4 5 5 43 c

Undistributed 8 8 7 3 1 * * * * * 30 d

Classified and

Coalition Support 5 5 5 5 3 3 3 3 3 3 35 e

Total 64 65 54 25 10 9 9 10 10 10 266

Scenario Two

Iraqi Freedom 35 36 31 29 21 15 16 16 17 17 233

Noble Eagle 4 3 3 3 2 2 2 2 2 3 27

Enduring Freedom 5 5 4 4 4 4 4 4 5 5 43

Undistributed 8 7 6 5 3 2 2 2 2 2 39

Classified and

Coalition Support 5 5 5 5 5 5 5 5 5 5 50

Total 56 57 50 46 36 28 29 30 30 31 392

Scenario Three

Iraqi Freedom 19 16 11 6 0 0 0 0 0 0 52

Noble Eagle 4 3 3 3 2 2 2 2 2 3 27

Enduring Freedom 5 5 4 4 4 4 4 4 5 5 43

Undistributed 6 5 4 3 1 * * * * * 22

Classified and

Coalition Support 5 5 5 5 3 3 3 3 3 3 35

Total 38 35 27 21 10 9 9 10 10 10 179

SOURCE: Congressional Budget Office based on scenarios specified by Senator Conrad.

NOTES: Numbers may not add to totals because of rounding.

* = less than $500 million.

a. Operation Iraqi Freedom refers to military operations in and around Iraq.

b. Operation Noble Eagle refers to domestic homeland security missions such as combat air patrols over major metropolitan areas, undertaken

by DoD in response to the event of September 11, 2001.

c. Operation Enduring Freedom includes military operations in and around Afghanistan and other overseas counterterrorism activities.

d. Includes mobilized reservists supporting the various operations from the continental United States as well as the cost of maintaining the number

of active-duty troops above current authorized levels.

e. CBO does not have enough information to do an independent estimate of coalition support or classified activities. The number displayed here

is based on amounts requested and appropriated for those purposes over the past several years.