**GAO-07-1056R**                      Published: Jul 26, 2007. Publicly Released: Jul 26, 2007.                  

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## Highlights

Since 2001, Congress has provided the Department of Defense (DOD) with hundreds of billions of dollars in supplemental and annual appropriations for military operations in support of the Global War on Terrorism (GWOT). DOD's reported annual costs for GWOT have shown a steady increase from about $0.2 billion in fiscal year 2001 to about $98.4 billion in fiscal year 2006. In fiscal year 2007, Congress provided DOD with about $161.8 billion in annual and supplemental appropriations for GWOT. To continue its GWOT operations, DOD has requested $141.7 billion in appropriations for fiscal year 2008. The United States' commitments to GWOT will likely involve the continued investment of significant resources, requiring decision makers to consider difficult trade-offs as the nation faces an increasing long-range fiscal challenge. The magnitude of future costs will depend on several direct and indirect cost variables and, in some cases, decisions that have not yet been made. DOD's future costs will likely be affected by the pace and duration of operations, the types of facilities needed to support troops overseas, redeployment plans, and the amount of equipment to be repaired or replaced. Future cost variables for other U.S. government agencies include the efforts to help form national and provincial governments and build management capacity as well as capable and loyal security forces in both Afghanistan and Iraq. Reconstruction activities to restore, sustain, and protect critical infrastructure will also impose costs. Also, healthcare costs will likely increase as more servicemembers require treatment from injuries and mental health conditions such as post-traumatic stress disorder. DOD compiles and reports monthly and cumulative incremental obligations incurred to support GWOT in a monthly Supplemental and Cost of War Execution Report. DOD leadership uses this report, along with other information, to advise Congress on the costs of the war and to formulate future GWOT budget requests. DOD reports these obligations by appropriation, contingency operation, and military service or defense agency. The monthly cost reports are typically compiled in the 45 days after the end of the reporting month in which the obligations are incurred. DOD has prepared monthly reports on the obligations incurred for its involvement in GWOT since fiscal year 2001. Section 1221 of the National Defense Authorization Act for Fiscal Year 2006 requires us to submit quarterly updates to Congress on the costs of Operation Iraqi Freedom and Operation Enduring Freedom based on DOD's monthly Supplemental and Cost of War Execution Reports. This report, which responds to this requirement, contains our analysis of DOD's reported obligations for military operations in support of GWOT through April 2007. Specifically, we assessed (1) DOD's appropriations and reported obligations for military operations in support of GWOT to date and (2) DOD's fiscal year 2007 reported obligations for GWOT by military service and appropriation account.

From fiscal year 2001 through July 2007, Congress has provided DOD with about $542.9 billion for its efforts in support of GWOT. DOD has reported obligations of about $429.1 billion for military operations in support of the war from fiscal years 2001 through 2006 and from the beginning of fiscal year 2007 through April 2007, the latest available data. The $113.8 billion difference between DOD's GWOT appropriations and reported obligations can generally be attributed to certain fiscal year 2007 appropriations and multiyear funding for procurement; military construction; and research, development, test, and evaluation from previous GWOT-related appropriations that have yet to be obligated, and obligations for classified activities, which are not included in DOD's reported obligations. DOD's total reported obligations related to GWOT have demonstrated a steady annual increase each fiscal year through 2006. Through April 2007, DOD's total reported obligations are already more than three quarters of the total amount of obligations it reported for all of fiscal year 2006. In addition, DOD's reported investment obligations--which include procurement; research, development, test, and evaluation; and military construction, through April 2007--are approximately one and a half times higher than its reported obligations for investments during all of fiscal year 2006. As a result, total reported obligations for fiscal year 2007 may well exceed the amount reported for fiscal year 2006. DOD's reported obligations to date include about $324.9 billion for operations in and around Iraq as part of Operation Iraqi Freedom, and about $76.5 billion for operations in Afghanistan, the Horn of Africa, the Philippines, and elsewhere as part of Operation Enduring Freedom. It also includes about $27.7 billion for operations in defense of the homeland as part of Operation Noble Eagle. DOD's reported fiscal year 2007 obligations as of April 2007 total $76.6 billion. The Army accounts for the largest proportion of reported obligations--about $55.0 billion, nearly eight times higher than the almost $6.9 billion in obligations reported for the Marine Corps, the service with the next greatest reported amount. Among appropriation accounts, operation and maintenance, which include items such as support for housing, food, and services; the repair of equipment; and transportation to move people, supplies, and equipment, accounts for the largest reported obligations--about $38.9 billion. Obligations for investment, which include procurement; research, development, test, and evaluation; and military construction, account for more than a quarter of reported obligations or about $21.6 billion. In previous work, we reported that significant amounts of multiyear procurement funding provided in the fiscal year 2006 supplemental appropriation would likely not be obligated by DOD in fiscal year 2006 and would remain available for use in fiscal year 2007. A large amount of these multiyear funds has since been obligated.

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## Topics

National Defense

Cost analysisCost of warDefense capabilitiesDefense cost controlDefense economic analysisDefense operationsMilitary appropriationsMilitary operationsSupplemental appropriationsIraq War and reconstructionFinancial analysisCost growth