NCPA - National Center for Policy Analysis


October 29, 2004

In light of tough economic conditions, such as the impending insolvency of Social Security and Medicare over the next two decades, Peter G. Peterson, Chairman of the Council on Foreign Relations, asks: How will America pay for the War on Terrorism?

For example, to put President Bush's $87 billion for the war in Iraq in perspective, it costs some $1.3 billion in spare parts for yearly Apache attack helicopter maintenance and $1 billion to keep two divisions engaged in "stability operations" in Iraq for one week.

Since September 11, the U.S. military has made plans to invest even more in troop modernization and weapons development:

  • Weapons procurement is scheduled to rise to over $100 billion a year by 2010 -- more than its previous real dollar peak in the mid-Reagan years.
  • The Congressional Budget Office predicts that defense outlays will run 18 percent over official projections, resulting in $1.1 trillion in new spending.

Though Congress has yet to take action, Peterson says there are a number of important, but expensive national security initiatives that need to be completed. For instance:

  • It will cost $62 billion over five years to address the deficiencies of first responders, such as fire departments, police and other emergency personnel.
  • To implement port-security measures such as a globally monitored packing, tamper-proof seals, and satellite tracking would cost at least $20 billion.

The United States faces a future in which every major category of federal spending is projected to grow at least as fast, or faster than, the economy for many years to come. Given the size of future national security expenses, America needs to address this difficult issue before it is too late, says Peterson.

Source: Peter G. Peterson, "Riding for a Fall," Foreign Affairs, October 2004.


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