Watson Institute for International and Public Affairs
Costs of War

US Federal and State Budgets

Federal budgetary expenditures for the post-9/11 wars include many expenses far beyond direct Congressional war appropriations. The approximately $2.1 trillion in Congressional appropriations through Fiscal Year 2020 for “Overseas Contingency Operations” – which include combat in the post-9/11 war zones as well as international assistance through the State Department and USAID – are just the tip of an iceberg.

Other spending directly related to the War on Terror includes additions to the Pentagon “base” budget, which total over $900 billion through FY2020. And while the U.S. paid for past wars by raising taxes and selling war bonds, the current wars have been paid for almost entirely with borrowed money, on which interest has to be paid. Through FY2020, the U.S. government owes nearly $1 trillion in interest on these wars.  Even if spending war spending ceased immediately, so that expenses for Overseas Contingency Operations and the Pentagon’s base budget went to zero, spending on interest would continue to accrue, reaching $2 trillion in interest obligations by 2030 and $6.5 trillion by 2050.

The federal government also has committed itself to a series of I.O.U.s – medical and disability payments for veterans and administrative overhead costs that will total another estimated $1.5-$1.7 trillion or more through from 2001 to 2050. Finally, among the costs of these wars are increases in Homeland Security spending, intended to avert the threat of a terrorist attack and respond to and recover from attacks. This spending totals over $1 trillion to date.

Totaling these expenses and Congressional requests through FY2020, the U.S. federal government has spent and obligated over $6.4 trillion on the post-9/11 wars. In addition, by 2050, interest costs will be at least $6.5 trillion unless the U.S. changes the way it pays for the wars.


Key Findings

  • Direct war appropriations, which policymakers often cite as the costs of the post-9/11 wars, account for less than one-third of total war costs.

  • Current and future veteran care, interest on war debt, Homeland Security spending, and additions to the Pentagon base budget form the bulk of post-9/11 war expenses.


Recommendations 

Congress should require the Congressional Budget Office to make a fuller accounting of war costs, including:

  • War-related additions to the “base” Pentagon budget

  • Details of the “Overseas Contingency” fund

  • VA medical and disability expenditures related to post-9/11 veterans

  • Future obligations accrued to post-9/11 veterans

  • Estimated funding across agencies for war-related activities (including the Department of State, Social Security, CIA, Department of Energy, Department of Labor).

(Page updated as of June 2021)