Report: Military can cover war costs longer than expected

The Pentagon has several budgetary options at its disposal to pay for operations in Iraq and Afghanistan well into August -- weeks longer than Defense Department officials have estimated, according to the latest Congressional Research Service report on war costs. Congress already has approved $70 billion to pay for the overseas military operations and another $16.8 billion to buy new mine-resistant vehicles in fiscal 2008, but senior Pentagon officials have warned they need another $102.5 billion for the wars before accounts dry up early this summer.

"Although CRS estimates also suggest that the Army's current funding will be exhausted by ... early July 2008, DOD could extend that time line by one to two months -- or until mid-to-late August 2008 if necessary by using available authority to transfer additional funds to the Army," according to the Feb. 8 CRS report.

The military could make use of $7.7 billion in general transfer authority in its base fiscal 2008 budget and the $70 billion supplemental to pay for operations for an additional four weeks, the report said. Pentagon planners could also tap into $2.1 billion in excess balances in working capital funds -- umbrella accounts to pay for commercial and industrial activities -- to cover another week of operations. In addition, the military could draw on its 4th-quarter operations and maintenance accounts in its base budget to cover war costs, if necessary, until another fiscal 2008 supplemental spending bill is enacted.

Meanwhile, the military also could slow the obligations of its baseline operations and maintenance dollars by delaying less-pressing expenditures, as the Army did last year. Doing so would free up another $3.6 billion, CRS estimated. The report observed that belt-tightening measures "appeared likely to become increasingly disruptive to Army operations over time," but said similar cost-cutting efforts last year did little or no harm. If necessary, the Pentagon also could transfer funding and management responsibility for certain war-related functions from the Army to the other armed services. That tactic, an unprecedented budgetary maneuver that would significantly reduce funding for the Air Force and Navy, could keep money for operations flowing for an additional month or two.

House Defense Appropriations Subcommittee Chairman John Murtha, D-Pa., has said he expects the panel will mark up the next supplemental spending bill later this month and hopes to send it to the House floor sometime in March. It is still unclear whether Democrats will seek to attach policy language on Iraq to the emergency spending bill -- a move that could tie up congressional action and likely draw a presidential veto.

The Pentagon has repeatedly emphasized over the last several years that delaying war spending is detrimental both at home and overseas. Last year, the Pentagon threatened to lay off 100,000 civilian employees before Christmas if it did not receive war funding, prompting Congress to approve $70 billion. But skeptics have said the Pentagon has more wiggle room in its budget than it admits.