The White House is pushing back against criticism that its cooking the books on its budget by overestimating the costs of drawing down the war in Iraq. In a personal blog post, OMB Director Peter Orszag makes the case that counting the money saved from ending combat is perfectly fair accounting. After all, George H. W. Bush used the same practice during the final stages of the Cold War, and was vindicated.
The last time the United States began to ramp down from a prolonged, expensive military engagement, President George H.W. Bush was in office. With the Cold War having just been won, President Bush, for the 1991 budget, proposed a deficit reduction package that included substantial reductions in defense funding.
President Bush's budget at the time reflected exactly the same budgetary treatment from ending the war that ours does. The baseline (that is, the deficit path before the President's policies) reflected the high levels of defense spending precipitated by the Cold War, which had just ended at that point. Since President Bush proposed constraining defense spending over time to reflect the end of the Cold War, budgeteers credited the Administration with savings - just as the savings from winding down the war are credited under our budget. The scored savings, reflected in President Bush's 1991 budget, are shown in the table below.
More importantly, what happened? The savings projected in President Bush's 1991 Budget were achieved--and more. By 1995, the defense ramp-down started by President Bush and continued by President Clinton had achieved more than double the savings assumed by President Bush's 1991 budget.
The bottom line: A ramp down in military operations produced savings then, and can produce real savings now.
The accusation that the White House has used rosy figures gleamed from hypothetical war-cost savings has become a fixture of the GOP's budget attacks. Adm. Mike Mullen added a bit of kindling to the fire when, during an appearance on Fox News Sunday, he said he did not know where the Obama administration had gotten the idea that it could save $183 billion in war costs during the year 2019.
But there are, as Orszag and history show, serious savings to be had from drawing down military operations overseas. It's one of the reasons that Sen. Russ Feingold, in an interview with the Huffington Post, said he wished the White House would not leave 50,000 residual forces in Iraq.
"The first downside is that it is enormously expensive for the United States," said the Senator. "The president has talked repeatedly about the cost of the war. Maintaining 50,000 troops there is a drain on our economy and our ability to recover."