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Spending Battles, Yet Another Front of the Iraq War

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Spending Battles, Yet Another Front of the Iraq War

The Impact of War

Spending Battles, Yet Another Front of the Iraq War

Spending Battles, Yet Another Front of the Iraq War

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The U.S. war in Iraq entered its sixth year this spring. Congress and the White House continue to fight over how much the war will cost and how we should pay for it. Economist Bill Spriggs has been following the debate. He joins us this Memorial Day to parse out the funding wars and what they mean for our future. Spriggs is professor and chair of the Department of Economics at Howard University.

FARAI CHIDEYA, host:

From NPR News, this is News & Notes. I'm Farai Chideya. The U.S. war in Iraq entered its sixth year this spring. Congress and the White House continue to fight over how much the war should and will cost, and how we should pay for it. Economist Bill Spriggs has been following the debate. He joins us this Memorial Day to parse out the funding wars and what they mean for our future. Bill is a professor and chair of the department of economics at Howard University. Hey, Bill.

Dr. BILL SPRIGGS (Professor, Chair of the Department of Economics, Howard University): Hi, Farai.

CHIDEYA: So the president has framed this war as a response to the 9/11 attacks. For more than five years, the president continually pushed for more funding.

President GEORGE W. BUSH: Our men and women in uniform should not have to worry that politicians in Washington will deny them the funds and the flexibility they need to win. Congress needs to send me a clean bill that I can sign without delay. I expect Congress to do its duty and to fund our troops. And so do the American people.

CHIDEYA: That's the president making the case for last year's war-spending bill. And he seems to be using the same tone for his latest, $163 billion war- funding package. So why does he make these specific arguments?

Dr. SPRIGGS: Well, he is making those arguments so he can justify spending the money off-budget. And that breaks down the discipline of what we do and hides the cost to the American people of what's going on in Iraq.

CHIDEYA: Explain to me what you mean by off-budget.

Dr. SPRIGGS: Well, even though people don't believe it, Congress actually does act in a responsible way. The president submits a budget at the beginning of the year with the State of the Union Address. And then Congress responds by having hearings and deciding how much money they will spend, how much they will take in, in revenue, and if they need to, agree on how much of a deficit they may run. After they've made those agreements through a lot of deliberation, they then pass authorization and appropriations legislation to get things done.

The president is going around that process and saying, oops, this is an emergency. Every year, the president does this - not just with the war. Take Katrina as an example, where a hurricane wipes out a major city. You can't anticipate that in a budget. It's sort of like in your own household. You may budget for the year, but suddenly the radiator goes on your automobile, or your hot-water tank bursts. And most of us then pull out our credit card to cover what we didn't anticipate in our budget.

The president's doing the same thing to Congress. He's saying, this is an emergency. The hot water tank is going, and we've got to hurry up and get it fixed. Give me the money, and we'll worry about it later.

CHIDEYA: It sounds as if you believe that this money could be budgeted into the regular budget.

Dr. SPRIGGS: Well, if you buy an older home, you will end up finding that you do have to replace the hot-water tank, and then next year you have to do the refrigerator, and then the dishwasher and then the oven. At some point, you have to look at someone and say, you knew it was an older home. Didn't you anticipate and why didn't you put this into your budget?

The president has carried on this war now for longer than we did World War II. It's no longer the case that this is an emergency or something that was not expected. Many of the costs are recurring costs because we are there and he's committed to staying there. So it's a little hard to say it's an emergency and should subvert the budget process.

CHIDEYA: This time around this year, the president is facing some pushback from Congress, who have decided not to pass the funding bill. Here's a clip of Illinois Senator Dick Durban saying why he decided to vote against an Iraq spending bill. Now last year, he voted for a similar bill.

Senator DICK DURBAN (Democrat, Illinois): Sending a blank check to this president for this war is going to prolong the killing, prolong the deaths, the injuries that will return. And this president wants to hand off the ball on January 20th, 2009, and walk away.

CHIDEYA: Now what do you make of the fact that folks like Dick Durban are jumping ship this time around?

Dr. SPRIGGS: Well, because they're tired of the way the process has been misused. When the Defense Department gives a regular budget proposal, they go through great detail in explaining why we need this missile system or why we need this airplane, and they justify it. And they give you each item and why it's there. In the case of the war, it really is a blank check. They just broadly say, we need money for equipment. We need money to move personnel. They don't explain which equipment, why are you doing it this way as opposed to that way, is there a cheaper way to do it, did you really think about this expenditure? It's just absolutely a blank check. It does not have the same discipline of the rest of the budget.

And then what the president has done is not fully fund all of the cost of the war, because some of these things get hidden into the portion of the budget that would be discretionary. For instance, when we take care of veterans - this was mentioned by the senator- when we take care of veterans who are wounded, that shows up under the Veterans Administration, and that is discretionary spending. That and the regular budget has to be balanced against a pot of money that's lumped together with military construction.

So the choices that Congress have are, I can do the responsible thing and cover the medical expenses of our veterans, or I can cheat the current fighters in our Army and not build adequate housing for their families. Or I can cheat them out of the subsidies they get for when they live off-base. Because that pot of money means that kind of trade-off.

CHIDEYA: Well, you mentioned health-care costs, and we recently had former Health and Human Services Secretary Donna Shalala on the show. She was the Health and Human Services secretary under President Clinton. Recently, she co-chaired a task force for the Veterans Administration, and it looked in to how the military was taking care of some of its wounded soldiers. So here's part of what she said.

Ms. DONNA SHALALA (Former Health and Human Services Secretary): Much of what we recommended required that both the military and the V.A. do things differently. Not necessarily new resources, but some of the things we recommended definitely requiring new resources. The president has started the process of investing in those resources that are needed, but I'm never going to say we've done enough or we have enough resources dedicated to these brave young men and women.

CHIDEYA: Now, this commission - the Dole-Shalala Commission, it was called informally - recommended among other things that there was lifetime care for soldiers with PTSD, and long-term mental health care. So how will programs like these, if they're implemented, affect the overall cost of the war?

Dr. SPRIGGS: That's how we get closer to the bigger numbers you have maybe seen in the press. Joe Stiglitz, who has done a series of reports on the cost of the war, has a book out saying that the cost of the war to the American society is going to be close to $3 trillion. And a large part of that has to do with the long-term implications for what we do with these veterans.

It's hard when you look at the budget, because that only says what the V.A. is willing to do. And so it ignores the huge backlog that has built up of servicemen trying to get treatment. So claims now are months and waiting for close to 400,000 troops. And you have the issue that when they become disabled, they become in part an expense of the Social Security system, because they will show up in the disability roles of the Social Security system.

We have another set of hidden costs, and those are the private contractors who are wounded or killed under hostile environments. The contractors are required to carry insurance, but that insurance doesn't cover what happens in a hostile environment. That type of injury is covered by the Department of Labor, and those expenses come out of the Department of Labor. So those monies could go to job training, as an example. Or they could go to other things that the Department of Labor does, like enforce wage-an-hour protections, things like that.

CHIDEYA: So Bill, when I think about numbers that are in the trillions or billions, it's hard for me to process them. Can you explain what these figures really mean?

Dr. SPRIGGS: Yes, it's really very hard, because a trillion dollars is a lot of money. But if we just think about last year when we spent $138 billion on the war in terms of what that could have done for us as a society. Bob Poland (ph), who teaches at the University of Massachusetts, has estimated that for the same $138 billion, we could have covered the 45 million Americans who are uninsured.

We could have given them Medicaid insurance coverage. So we would have had no uninsured Americans in the United States for that same amount of money. Or if you think about it in another way, he points out, you could have paid 30,000 school teachers and built 400 schools for them to teach in. Just take that 138 billion, multiply that times a thousand, that gets you to the trillion dollars. And so many times over, there would have been no uninsured Americans, and we could have built many, many, many of the schools that need to be built in the United States over again.

CHIDEYA: This is a little bit more of a political question than an economic one, but we have heard here on News & Notes different people who are the families of veterans and other people saying, look, this money could be used right here at home. But in general, although there's a high disapproval rating for this war, there doesn't seem to be a groundswell, a cry to say, you know, we need this money spent at home. Why do you think that is?

Dr. SPRIGGS: Well, in part because it is hidden. When the president does it off-budget, it doesn't immediately press against domestic priorities, so we don't see it exactly in that way. When Congress meets to figure out what to do with the war, they aren't having to make the trade-off. They aren't having to say, well, we'll have to raise taxes or revenue in order to pay for it. So we're putting it off to another generation that will have to pay the debt on the, right now, $800 and some billion that we have borrowed.

CHIDEYA: How do you think it's going to affect the future? That not only do we have these high costs, but much of it is being rolled over into essentially what is the government's credit card, you know, borrowing money in order to maintain the spending.

Dr. SPRIGGS: It couldn't come at a worse time. In 2010, the Social Security system switches over from its current status. Currently, we collect more in Social Security taxes than we pay out. Beginning in 2010, that stops. So the government's extra piggy bank runs out of money. We will then begin to pay down the debt that we owe to Social Security. That will be a drain on general revenue. Then we have the health-care costs that we must meet of our seniors under Medicare, and that will require increased expenditures.

So already we know, going forward, we have a lot of obligations out there. The current baby echo generation is bigger than the baby boom generation and a higher share of them are going to college, so we're going to have even greater demands on how we will get our people educated. So with just those demands out there that we know exist to our young people and to our seniors, it says you can't borrow any more money. You have to tell us how you are going to pay for it. It's going to be a very rude awakening as we have to pay the interest on this debt.

CHIDEYA: Well, Bill, thanks for this update.

Dr. SPRIGGS: Thank you.

CHIDEYA: William Spriggs is professor and chair of the department of economics at Howard University. He joined us from NPR headquarters in Washington, D.C.

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