Adequacy of the Army's FY2004 Funding for Operations in Iraq

Publication Date: May 2004

Publisher: Library of Congress. Congressional Research Service

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Research Area: Military and defense

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Abstract:

With the upsurge in violence in Iraq in recent months, Members of Congress and others have voiced concerns about whether the $37.3 billion received by the Army in the fiscal year 2004 Emergency Supplemental (P.L.108-106) will be sufficient to fund operations for the remainder of the fiscal year or whether a second supplemental is needed before the end of the fiscal year. In recent testimony before the House Armed Services Committee, Chairman of the Joint Chiefs of Staff Richard Myers suggested that the Army is facing a shortfall of $4 billion for FY2004 and stated that the Department of Defense (DOD) was assessing whether additional resources could be found from within either DOD's regular or current supplemental appropriations or whether more funds would be needed. Using monthly obligations data on the cost of Army operations in Iraq, this report estimates the size of the potential Army funding shortfall and assesses whether sufficient funding is likely to be available to fund the Army's military personnel and operation and maintenance (O&M) requirements for its wartime missions in Iraq in FY2004.

As of the end of February 2004, combined funding obligations for Iraq, Afghanistan, and enhanced security for defense installations (Operation Noble Eagle) for all services totaled $27.0 billion or about $3.2 billion less than forecast. For the Army in particular, however, obligations totaled $17.9 billion or about $1.6 billion higher than anticipated, primarily because of operations in Iraq. Based on CRS estimates for Iraq, the Army might face a shortfall in FY2004 of from $5.3 billion to $7.1 billion for that mission depending on assumptions about likely monthly obligations for the remainder of the year.

At the same time, however, the Army might be able to finance such a shortfall using about $7.0 billion in funds that are available because certain other costs are proving to be lower than anticipated. For example, DOD recently lowered rates charged to the services for transportation of personnel and equipment because those rates exceeded costs. And obligations to cover enhanced security at defense installations are running about $2 billion less than forecast. Some peacetime training exercises, which were slated for troops that are currently deployed, have also been cancelled.

This report includes monthly data on the cost of operations in Iraq, Afghanistan and enhanced security for defense installations for FY2003 and FY2004.. To assess estimates of costs for the rest of FY2004 or for the FY2005 supplemental, it could be useful for Congress to have data beyond that currently available including monthly manpower levels, cost factors for recurring costs, and distinctions between one-time and recurring costs. This report will be updated as necessary.