Hearing of the House Budget Committee - The Growing Costs of the Iraq War

Interview

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REP. JAMES P. MCGOVERN (D-MA): Thank you Mr. Chairman.

And Dr Orszag, I want to thank you for your testimony and for providing such important information and analysis.

While some of your testimony today builds on past reports, the impact of the Iraq war on the public debt is particularly important to this committee, which has the duty to draft a realistic budget. I only wish the president of the United States was listening and cared half as much about these issues as you do, as Chairman Spratt and as other members of this committee do.

I am troubled by the fact that the administration didn't send a witness here today. I'm troubled by the fact that so many of my colleagues on the other side of the aisle are not here today. I get the feeling that some believe that if we don't talk about it that we don't have to deal with it. But we've heard a lot this morning about the growing cost of the Iraq war and this is a real issue.

Now I'd like to turn the conversation, if I may, to paying for the war.

As your testimony illustrates, we are deep in debt from this war. Every second we borrow another $100 billion here and another $100 billion there to finance this war, the deeper and deeper into debt we go. And every morning, China and Japan and the Arab world-exporting states wake up and they buy the debt. We borrow money for this war and they hold the IOUs. We cannot keep borrowing money to pay for this war. We cannot keep putting it on the national credit card.

Someday, somebody is going to have to pay for this war and right now the borrow-and-spend-and-borrow-some-more approach of the president means that that somebody is going to be our kids and our grandkids. That somebody is going to be the children and grandchildren of every military family in America, including those fighting in Iraq and Afghanistan. They're going to have to pay for this. And that somebody is going to be the children of the wounded, many grievously wounded. They're going to have to pay for this.

So on top of all the sacrifice already demanded of their fathers and their mothers, this president is also demanding that their children sacrifice their financial security to pay off his Iraq war debt. Just as the president intends to dump his mess of a war onto the lap of the next president of the United States, he is also deliberately and, in my opinion, cynically chosen to dump paying for this war onto the next generation.

So here's my question: If President Bush actually started to pay for the war, beginning with FY 2008, how would that affect the budgetary costs of the war on the public debt? Now, he wouldn't be reaching back to pay for the $600 billion in borrowed money through FY '07, so that's still there accumulating debt interest.

But imagine the president actually paying for FY 2008 and onward. What would the budgetary impact be if the president finally found the courage to pay for his war?

MR. ORSZAG: Again, it depends on sort of what the course of the future war looks like. But under the two scenarios we presented, if you offset the costs, you would reduce the impact on the debt by, you know, in the slower phase-down case, by a little bit more than a trillion dollars. And then there's some debt service on that too, so it's something like $1.2 trillion by 2017 if you paid for future activity.

REP. MCGOVERN: Which is significant.

MR. ORSZAG: That is a significant amount of money, yes sir.

REP. MCGOVERN: I also think -- you know, sometimes -- I think Mr. Becerra said this -- we talk about these figures and, you know, they're so enormous that I think people have kind of lost the ability to understand, you know, what $100 billion is or what $160 billion is.

I was trying to do some calculations here. I mean, $160 billion is, you know -- which is about one year of this war in Iraq -- is equal to the entire budgets of the Department of Agriculture, Commerce, Justice, including the FBI and the entire federal judiciary, Interior, Energy, Treasury, the Environmental Protection Agency, NASA. I mean, that's everything here in Washington. That's everything out in the field.

I mean, we are spending a huge amount of money. And to put all this on our credit card, with no accountability, with no plan to pay for it I think is the height of irresponsibility. The fact of the matter is, sooner or later the president somehow is going to have to find enough courage and integrity to pay for his war, or the disastrous budget impacts described by you and by some of the witnesses who will testify later are going to get worse and worse and worse than I think we've ever imagined here. So it will be just one more toxic legacy of this disastrous war that I think we'll leave our kids to have to clean up.

But I think this committee in particular has a special responsibility to make sure that members of both parties stand up to the plate and assume responsibility for this war. I mean, this is a war that has been decided to be waged by this generation. And this generation ought not dump all the cost on the next generation. And I appreciate very much your testimony here today and all your analysis.

Thank you, Mr. Chairman.

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