The (financial) costs of war

THE (FINANCIAL) COSTS OF WAR…. Ezra Klein has a good post this afternoon, reminding folks that “wars cost money.” It’s one of those observations that should be obvious, but isn’t.

In the case of the offensive in Libya, we’re looking at a price tag of at least $1 billion, and that’s if the conflict goes well. But Ezra’s larger point is to use that as a reminder about budgeting responsibly for these conflicts.

Gordon Adams, a senior White House budget official for national security in the Clinton administration, points out that historically the practice of paying for war through off-budget legislation called “emergency supplementals” was governed by a few clear standards: They had to be modest, unanticipated expenditures for conflicts that were not expected to run long. The Bush administration turned them into massive, predictable expenditures serving two of the longest-running wars in American history — and didn’t even allow them to distract us from tax cuts.

The Obama administration has improved the process some, mostly by asking for war funding when the budget is submitted (although the funding itself is still classified as “emergency” spending and so is not actually ruled by the budget process), including some funding in the budget and more tightly defining what can go into the emergency packages so they don’t simply become budgeting by other means for the Pentagon. But the wars are still charged to the credit card, and the Pentagon is still protected from trade-offs.

The two recommended reforms seem like common sense, but are worthwhile reminder to policymakers: cost projections for military conflicts should include a range of scenarios, including severe setbacks, and paying at least some financial costs for combat while it’s ongoing. Ezra added, “If a war is not worth a tax or spending cuts, then perhaps it is not worth engaging in” — a sentence that should be published on postcards and sent to every member of Congress.

I’d emphasize just one related point: history. When presidential administrations have launched major military campaigns, invariably they’ve raised taxes. Lincoln raised taxes to pay for the Civil War. McKinley raised taxes to finance the Spanish-American War. Wilson raised the top income tax rate to 77% to afford WWI. Taxes were raised, multiple times, to help the nation pay for WWII, Korea, and Vietnam. Even the first President Bush raised taxes after the first war with Iraq to, you guessed it, keep the deficit from spiraling out of control.

The notion of having future generations pick the tab — literally, the entire tab — for one generation’s military/combat efforts has traditionally been unthinkable. Indeed, the only president in American history to actually cut taxes and launch a war was George W. Bush — and he added $5 trillion to the debt en route to becoming the single most fiscally irresponsible chief executive the country has ever seen.

The offensive in Libya is clearly not on par with those conflicts, but it does coincide with an ongoing effort in Iraq, and the longest war in U.S. history, Afghanistan.

And yet, the very idea of raising a penny of additional revenue from anyone has been deemed completely unacceptable by one major political party (which happens to the party that most supports continuing the ongoing military conflicts).