Obama's estimate of war's cost per household adds up

The cost of the Iraq war has often been expressed in billions or trillions, numbers so big and abstract they sound like Carl Sagan's description of the universe ("billions and billions of stars").

The Democratic candidates have cited alternative uses for the war money, saying it would have been better spent on health coverage for the uninsured (Sen. Hillary Rodham Clinton of New York) or on more schoolteachers (Sen. Barack Obama of Illinois).

In a speech on March 20, Obama took a different approach and emphasized the personal cost of the war.

"When Iraq is costing each household about $100 a month, you're paying a price for this war," he said in Charleston, W.Va.

At $100 per month, the war cost to each U.S. household would be more than cable TV (average bill: $58), but less than a car payment (average bill: $400 to $500).

We asked the Obama campaign about the source of the $100 figure and were told it came from The Three Trillion Dollar War, a new book by Joseph E. Stiglitz, a Nobel Prize-winning economist, and Linda J. Bilmes, a former Commerce Department official from the Clinton administration who is now a professor at Harvard University's Kennedy School of Government.

The book says the monthly operating cost of the Iraq and Afghanistan wars is about $16-billion.

"To think of it another way," the book says, "roughly every American household is spending $138 per month on the current operating costs of the wars, with a little more than $100 per month going to Iraq alone."

(Of course, Obama's simplified analysis does not reflect the variations in income tax levels. And you don't have to write a check for the war each month. The war costs are included in government spending that is paid for by taxes.)

There was no footnote for the $100 estimate, so we called Bilmes to ask how they had calculated it. She said they took the Bush administration's 2008 request for war funding — $196-billion — and divided it by 12 to get a monthly cost. That works out to $16-billlion for both wars and about $12-billion just for the Iraq portion.

She and Stiglitz then divided those figures by the number of U.S. households and came up with $138 for both wars and slightly more than $100 for Iraq alone, she said.

We double-checked the authors' sources and math and found they were right.

Indeed, the Bush administration request for 2008 was $196-billion for both wars, with $159-billion going to Iraq, according to a summary by the nonpartisan Congressional Research Service. A recent Census Bureau report said there were 116-million households. So that works out to about $140 per month for both wars and about $114 for Iraq alone. (Our numbers are slightly higher because we used the latest estimates from CRS and a newer and slightly higher count for households.)

To verify the Bilmes and Stiglitz calculation, we checked with Steven Kosiak, vice president for budget studies with the Center for Strategic and Budgetary Assessments, a nonpartisan think tank that focuses on defense issues. He said their methodology was correct and that the number "sounds about right."

Bilmes, a Democrat who is neutral in the presidential race, said Obama could have used an even higher figure if he had included other war costs that aren't in the Pentagon's $196-billion tab. These include disability payments, the cost of replacing war-fighting equipment and interest on the borrowed money.

By using the figure he did, Obama "really was being conservative on this," Bilmes said. "He's not overstating it in any way."

Bill Adair can be reached at adair@sptimes.com or (202) 463-0575.