Wednesday, July 21, 2004


Just Great

U.S. Underestimated War Costs by $12.3 Billion -GAO

WASHINGTON (Reuters) - The Bush administration underestimated the 2004 cost of U.S. military operations in Iraq and Afghanistan by $12.3 billion, a report released on Wednesday found, fueling criticism that the war was badly planned.

The shortfall is forcing the Defense Department to shift funds from other uses, including pushing expenses from the 2004 fiscal year into 2005, in a move likely to boost war costs further down the line, Congress' investigative arm found.

"Analysis ... suggests that anticipated costs will exceed the supplemental funding provided for the war by $12.3 billion for the current fiscal year," according to the report by the Government Accountability Office.

Congress approved an $87 billion emergency spending bill in October 2003 to finance military operations in Iraq and Afghanistan through the end of September.

Democrats estimate that the Pentagon has $5 billion left to fund the 2004 shortfall but will need to find $7 billion to cover it in the last two months of the fiscal year.

"The administration has failed to budget for the war in Iraq and Afghanistan," said the top Democrat on the House Budget Committee, Rep. John Spratt of South Carolina.

"The time is long past for the administration to present a full accounting of the cost of the war and to ask Congress to put up the resources needed to fund it."

The White House Office of Management and Budget had no immediate comment on the report.

The report warned that deferring activities planned for the 2004 fiscal year "adds to the requirements that will need to be funded in fiscal year 2005 and potentially later years and could result in a 'bow wave' effect in future fiscal years."

Congress is expected this week to approve, and send to President Bush for signing, the defense spending bill for 2005 which includes $25 billion in emergency spending for Iraq and Afghanistan.

The White House requested this money for the 2005 fiscal year beginning on Oct. 1, a move Democrats say is designed to keep down the size of the record 2004 budget deficit ahead of the November elections.

The White House is expected to seek a larger emergency spending bill early next year, after the elections, for Iraq and Afghanistan -- which Democrats say will top $50 billion.

The GAO also criticized the Department of Defense for lack of transparency into how the money it was sent by Congress has been spent. The report said "large amounts" of funds were reported as miscellaneous, providing "little insight" into where the money went.

Lawmakers have agreed to tighten controls and want monthly reports on the how the latest $25 billion will be used.

But the GAO said "additional actions are necessary."

In a separate report, the GAO criticized the Army and Halliburton for their logistics work in Iraq, citing the Army's poor planning and problems with the Texas contractor's cost controls.

Anna Willard, Reuters

First Medicare, now this.

Does this administration tell the truth about anything?

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