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Hidden defense costs add up to double trouble

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To measure actual spending by the United States on defense, take the federal budget number for the Pentagon and double it.

That's the "rule of thumb" advocated by economic historian Robert Higgs.

Early this month, President Bush requested $401.7 billion for the Department of Defense (DoD) for fiscal 2005. So doubling that would make total defense/security spending close to $800 billion out of a total federal budget of $2.4 trillion.

In his budget message, Mr. Bush repeatedly notes the "war on terror" in referring to defense, though most of those outlays have little to do with that, according to Mr. Higgs, editor of the Independent Institute's quarterly review.

Like other defense analysts, he adds to the Pentagon cost number the nuclear-weapons activities of the Department of Energy, including cleanup of radiation-contaminated sites. Bush wants Energy Department scientists to develop nuclear "bunker busters" and other new weapons. Energy's total defense spending: at least $18.5 billion, reckons Higgs.

An oft-noted omission from the DoD's 2005 budget is the extra costs for activities in Afghanistan and Iraq. For fiscal 2004, a supplemental appropriation last November provided $58.8 billion for that purpose. The Defense Department hasn't yet put a number on 2005 costs, arguing before Congress that it was unknown.

"They wanted to avoid sticker shock prior to the election," says Christopher Hellman, an analyst with the Center for Arms Control and Non-Proliferation.

But the White House's Office of Management and Budget indicates the 2005 cost would be about $50 billion. Monthly defense expenditures in the two nations - the "burn rate" - are running between $3.5 billion and $4.5 billion per month.


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