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Background Briefing: Iraq War Budget Supplemental

NEWS TRANSCRIPT from the United States Department of Defense

DoD News Briefing Senior Defense Official Monday, March 24, 2003

(Background Briefing on Budget Supplemental)

Staff: Good afternoon. We're going to do a background briefing on the budget supplemental. It will be attributable to a senior defense official.

SR. DEFENSE OFFICIAL: Okay, what you've all been waiting for. We are about to release to Congress a supplemental request, and we are going to really push for prompt and full congressional passage.

Let me move you immediately to the next slide. Okay, that wasn't supposed to be the first slide. Go to slide four, quickly. There we go.

That is what the supplemental looks like. If you add it up, you will see it's $62.6 billion. And we cannot -- and these are all incremental operations, okay? We can't fund the -- our regular operations. If we don't get this money, what we will have instead is a severe curtailing of our training, maintenance and funding for later in the fiscal year. In fact, the services have or have just about totally depleted their funding in their operations and maintenance accounts in particular, and military personnel accounts for the fourth quarter. That is to say, what they did was, they forward-financed, and took monies that were supposed to be spent between July 1st and September 30th and spent them already. And they've just about used all that up.

There are four phases here. Coercive diplomacy is the sunk costs; that is what we used. We took money from other accounts and sunk that into the support for our diplomacy, moving the forces out there.

Major conflict phase assumes a short duration, high-intensity conflict. Don't hold me to a specific hour or day because we just don't know. And to be perfectly frank, we have seen, just over the last couple days, shifts both in strategy that came out, and shifts in the fortunes on the battlefield, and that's what ebb and flow is about. So we made some rough assumptions. Obviously, high intensity; turn on your TV, you see how high the intensity is.

Transitional and stability phase includes stability operations, humanitarian assistance, and natural remediation operations; for example, fire-fighting in the oil fields.

And then reconstitution includes depot maintenance, ammunition, and spares.

Now you'll see in the small box where we spent the money for the coercive diplomacy. The larger part of it, more than half, was spent on personnel and personnel support. Then you had transportation, moving forces back and forth. "Preparatory tasks" means just that. Did you have to do some work in a particular area to get the -- to make the facility hospitable to the forces who came out, things of that sort. Consumables that we've used, and then coalition support -- very, very important. We value the contributions of our coalition partners. We've seen already that our British partners have taken especially high hits relative to the size of their forces, and we're continuing to look for more and stronger international support for our efforts.

Now let me go back to what is marked as slide 2, if you can go back to 2, please.

Q: Are we going to get these?

SR. DEFENSE OFFICIAL: Yup, and you'll get them in the wrong order.

Q: (Chuckles.)

SR. DEFENSE OFFICIAL: The supplementals been prepared under the following assumptions:

This is only 2003 costs. We have not budgeted the 2004 budget for the global war on terrorism or the current operation for Iraqi freedom. It's obvious. How could we budget for something that we didn't know would happen? We cannot, as I said, absorb 62.6 billion for incremental costs within the current budget that we have. And the supplemental includes only incremental costs above what's in the service and Defense budget agencies.

Lots and lots of unknowns, obviously. We're aware of that.

That also means we need maximum flexibility to reallocate funds. We are recommending that almost 96 -- about 96 percent, 60.1 billion, will be appropriated into a Defense Emergency Response Fund, a DERF. We've done that before. The reason you do that is that it gives you the ability to transfer funds from one account to another. If you lock them into particular accounts, you may be over funding one account, under funding another account, and then you can't move the monies around. So we want to allocate the monies based on actual execution.

Next slide, please, which is slide 3, still.

Now let me walk you through a little bit more on these particular items. I mentioned already personnel costs, transportation, preparatory tasks. I've given you all those. Let me give you what's in some of the other categories.

We have $1.6 billion for coalition support; that is to say, countries that are providing help to us, and that we are reimbursing. We've done that for Pakistan in the past. We're going to have additional funds, as well.

We also have money for counter-drug operations, which, by the way, extend beyond just Latin America, and it's important to understand that, although it's focusing on Colombia.

Energy resource management fund deals with the damage to the oil fields, and reconstruction (sic) I've already mentioned to you. The reconstitution, I should say also -- I said "reconstruction"; that was a slip. It's "reconstitution." It deals with significant force redeployment, moving them back from the theater. We expect forces to decline significantly. We're not going to retain large numbers just for the sake of keeping them.

We're going to replace key munitions expended in the conflict, the kinds of munitions you've been seeing on television. And, as I mentioned earlier, depot maintenance and repair of weapon systems and weapons that have to be serviced after the wear and tear of operations.

So now let me go to slide 5, which is slide 5. That one you've seen.

Here is another way of looking at this. We mentioned that 15.6 of the 30.3 was personnel. And you'll notice that the 15.6 is the entire request because the people already moved out there. Military operation support is to finance the incremental military operation, the costs that have already been incurred.

Procurement and RDT&E, that's simply to provide weapons, munitions that we're using to support the military. Small amounts of military construction, urgent projects in some host countries. These are facilities used by the U.S. Also the continuing war on terrorism, and also a small amount for the complex at Guantanamo.

Fuel procurement is in the working capital fund. That's your $400 million. Coalition support I've already talked about. And the firefighting. And then Colombia is kind of a separate category of $34 million.

That is the supplemental for the Department of Defense. Obviously, it doesn't include other elements of the supplemental, State and so on, but this is what we are asking for.

The key points that we're trying to get across is, we need that this be passed as urgently as possible, as quickly as possible and with the maximum flexibility so that we can move monies around in different accounts. We've found that having that flexibility in Operation Enduring Freedom made a tremendous difference. Whereas we had past cases where that was not at all the circumstance and in some previous operations, where monies were allocated to specific accounts, it became exceedingly difficult to move those monies back; people said they had spent the monies and so on. We don't want to get into that.

So that's basically it, and I know you all have things to do. I'll try to answer some questions. Yeah?

Q: A question on precision-guided munitions. You said that there would be specific funds dedicated to replacing weapons that had been expended. Can you highlight a little bit of the prioritization that you see already? In other words, do you see any particular areas that you could note for us of high expense, like Tomahawk missiles, for example --

SR. DEFENSE OFFICIAL: Well, I mean, obviously we're using the JDAMs and laser-guided bombs and Tomahawk missiles. I mean, you're seeing that's a very high rate of use -- usage.

How far we will continue to use them at that rate is of course a big unknown. It very much depends on what happens in the battlefield.

So we assumed a relatively short, highly intense period of conflict. How that plays out, you know, we just don't know. I mean, it's the best we were able to do.


Q: We used the Defense Emergency Response Fund for Operation Enduring Freedom?


Q: When did we use it before that?

SR. DEFENSE OFFICIAL: We never really used it per se in that way. We had -- as -- you know, I wasn't in the government then, but I believe for Kosovo and Bosnia there was a contingency fund that caused -- evidently caused a lot of complications. And I think in Kosovo -- and it may be Bosnia; I forget which one -- we actually allocated funds directly and ran into problems afterwards. Was it Kosovo or Bosnia?

ANOTHER DEFENSE OFFICIAL: We used other transfer funds before. There was something called the Overseas Contingency Transfer Fund --

SR. DEFENSE OFFICIAL: That was the overseas contingency. But for -- well, one of them we actually allocated directly --


SR. DEFENSE OFFICIAL: Yeah, but we had one case where we allocated directly and found ourselves short in some accounts and overages in other accounts, and that's what we try to avoid.


Q: Could you give us a ballpark at all on what you mean by assuming a relatively short, high-intensity conflict?

SR. DEFENSE OFFICIAL: Well, you know, we're not talking about several months. Let's put it that way.

Q: (Off mike.)

SR. DEFENSE OFFICIAL: Right now that's all I'm going to say.

Q: If we used a month, would that be incorrect or is that --

SR. DEFENSE OFFICIAL: If you used a month, you'll use a month. I mean, I'm just telling you it's not several months.

Q: Can you talk a little bit about --

SR. DEFENSE OFFICIAL: I'm sorry. I should have called on you, but --

Q: Well, let her go.

SR. DEFENSE OFFICIAL: Hey! A real gentleman.

Q: (Laughs.)

Q: Is there any money in there at all for Turkey?

SR. DEFENSE OFFICIAL: Not in our budget.

Q: Did you have access to the actual war plans and some of the time-phased deployment schedules that allowed you to make estimates?

SR. DEFENSE OFFICIAL: Well, of course they're relevant to that, to some extent. We -- you know, we couldn't just come up with these out of thin air. Remember, these tend to be parametric estimates, and war plans, you know, again, they change, as we saw, you know. But so what we did was apply -- that was a major input, but not the only input. Let me put it that way.

Q: The 30 billion in sunk costs, what's your benchmark? Is that since January?

SR. DEFENSE OFFICIAL: That is how much -- no, as you recall, we had some preparatory tasks extending back, you know, quite a few months. And you guys were reporting on those developments as they happened from the Gulf and so on. What we did was look at how much had we expended as we were deploying, and really up to the president's speech.

Q: This fiscal year?

SR. DEFENSE OFFICIAL: It would be this fiscal year, in other words, '03 costs.

Q: Up to the president's speech and for a couple --

SR. DEFENSE OFFICIAL: Remember, we're in '03, okay. So, this is --

Q: A lot -- 30 billion sunk, already spent. That's --

SR. DEFENSE OFFICIAL: Well, that's mostly because -- remember, look at all the forces we moved and the Reserves we used.

Q: So $30 billion to build up for this invasion?

SR. DEFENSE OFFICIAL: Yeah. And one of the interesting things is, you know, people will say, "My God, the whole thing is apparently costing 60.2 -- or rather 62-point-whatever-it-is, -6, and you've spent about half just for the build-up. And the answer is, of course, because once the forces are there, they're there, okay, and you had to feed them, and you had to move them, and you had to -- and you had to house them, and so on. And so, in a sense, if they would have all turned around and gone home, you know, the president -- if Saddam would have listened to the president's speech and decided he really did want to move to a vacation home, permanent vacation, we would have still had a bill of $30-point-some-odd billion.

Yeah, somebody called me sir. I gotta call on him. (Laughter.)

Q: Yeah, I'm not understanding. Explain the difference between coercive diplomacy and major conflict phase.


Q But also, I mean, if it costs 30 billion to get them there, what might it roughly cost to get them home?

SR. DEFENSE OFFICIAL: Well, we built into that -- I think that's in the reconstitution.

STAFF: The 30 billion includes the cost of bringing them home.

SR. DEFENSE OFFICIAL: The cost of bringing them home.

Q: That $30 billion wasn't just to get them there, is it?

SR. DEFENSE OFFICIAL: No. They had to come home.

ANOTHER DEFENSE OFFICIAL: (Off mike) -- conflict phase, it would just presume that they go there and you bring them home; that was about a $30 billion bill.

SR. DEFENSE OFFICIAL: So it's round trip.

SR. DEFENSE OFFICIAL: Which also explains, by the way, why it's such a large proportion of the 62.6. You've already paid the return tickets.

Q: And coercive diplomacy --

SR. DEFENSE OFFICIAL: But we only costed keeping them there for how long? The issue was we're keeping them there -- this was if we sent them back on March 17th, 18th, whatever the date was.

You had another question?

Q: Just the difference between coercive diplomacy and major conflict phase.

SR. DEFENSE OFFICIAL: Oh, it's very simple. Coercive diplomacy was when they were all out there and we were still working with the U.N. and telling Saddam to come to his senses. Major conflict is what you've been seeing on television.

Q: Why wouldn't you call the $30 billion the buildup cost, the troop buildup, instead of coercive diplomacy, especially with the stories about paying off allies?

SR. DEFENSE OFFICIAL: Well, somebody just asked me about Turkey. It's not clear that we do pay off allies. Last time I checked, by the way, I don't think we've paid off the Australians or the British or the Spanish very much.

Q: No, I understand, but --

SR. DEFENSE OFFICIAL: Okay? So wait a minute, wait a minute. No, no, no, I'm not going to take that sitting down. I'm not going to let you off the hook on this, because there is a notion abroad that somehow we are bribing folks. Now, I'm the money guy, at least for this department, and I haven't been party to bribing folks to sign up for this thing. And in fact, what we're finding is the forces -- you know, the Brits, it's costing them money, the Australians -- and lives; the Australians have lost a couple journalists, and they've got guys at risk; and so on. So this has not been a bribery, or a buying or whatever. And I think there a real misconception about that.

Q: It's a strange title, if that's the case.

SR. DEFENSE OFFICIAL: Not at all. I guarantee you Saddam wouldn't have paid any attention if we were sitting back here and saying, "No, no, no." Coercive diplomacy.


Q: Yeah. I may have missed this because I came in late, but I take it that this does not cover the cost for a post-conflict --

SR. DEFENSE OFFICIAL: Yeah, you came in late. Yeah, the -- there are some elements in here that do address that. That's in this transitional and stability phase. You've got some humanitarian assistance money, you've got stability operations, and you've got fighting fires in oil fields. And it's not clear that fires necessarily respond to somebody saying, "The war's over."

Q: Sir?


Q: Oh, you're -- (inaudible). (Laughter.)

Q: Is there any additional money in here for Afghanistan, or is that all the --

SR. DEFENSE OFFICIAL: There is money in here for the Afghan National Army, for example. We drew down $165 million for the Afghan National Army, and this replenishes that. So we've got that money.

We have money in here to reimburse the Pakistanis for what they're doing in support of the conflict -- Operation Enduring Freedom. So there are a number of areas where we have expended funds that are in support of Operation Enduring Freedom.

Q: Do you have the total?

Q: How much is that Pakistan --

SR. DEFENSE OFFICIAL: The Pakistan -- the total for Pakistan and others -- I mean, it's just a guesstimate, you see, for Pakistan. Pakistan is in the region of a billion dollars. I can't be certain, because this assumes that we will -- they will be continuing to help us out through the end of the fiscal year. We're just about halfway through that fiscal year. It also allows funds for other folks that will be helping us either in OEF or that will put -- initially put out support for this conflict. And that's not what you would call paying people off. They have to put their forces in there. Then they -- it's actually a very carefully analyzed process. With the Pakistanis, for example, they come to us, and they say, "It's cost us such and such to move our forces." And you know, what they've done, frankly, is move forces away from the Indian border, for starters.

Then we have -- Central Command evaluates those bills, and then program analysis evaluates those bills, and my office evaluates those bills, and then we decide how much of those bills were really and truly, funds that they would otherwise not have spent, and were only done at our request.

So the Pakistanis are the most prominent case, but there may be others. And it's -- up to now, of course, it's been only Enduring Freedom. And there have been other countries that, as you know, are really out on a financial limb to continue to support us.


Q: Operation Enduring Freedom already led to -- my figure may be wrong here, but there was about $20 billion that the Defense Department had needed above and beyond the last budget cycle to help make up for the expenditure of that effort, right?

SR. DEFENSE OFFICIAL: Well, we got 6.1, as you know, from the Hill, so that brought it down to some 13.9. And then we included in that, for instance, more support for countries like Pakistan. So that brought it down. There was support for the ANA, so that brought it down. And we've continued to reevaluate the figures. And there's also -- it also turned out that many of the forces that we were predicating as being in Enduring Freedom turns out they're in the region, but they're not doing Enduring Freedom. But they're in the region. So we were able to basically mesh those two sets of requirements and address them in this -- again, these are estimates.

Q: Oh, so this includes --

SR. DEFENSE OFFICIAL: No, this is directed to the Iraqi requirement with the explicit exceptions I gave you. Okay? Now, since there are forces that clearly could have gone to OEF, they were in-theater, but they're going to this. So there are forces that are going to this, so that brought down the estimated future cost of OEF. And we're funding them because those forces are going to this.

And so, you know, we've re-estimated, and the estimates of costs of OEF itself are constantly undergoing review. We hope that we will have enough to cover OEF as well as this. You know, again, I mean, this is the best estimate we've got.

Q: It's possible --

SR. DEFENSE OFFICIAL: But these forces are meant for here.

Q: It's possible that you may have to go back at some point in the near future, provided this prediction about a short conflict is borne out in Iraq, and as for additional funds to support OEF?

SR. DEFENSE OFFICIAL: We may not. I mean we just may not. We have to look at how short is short, number one. We have to look at secondly what are we still doing out in OEF. You know, you've been reading there are other countries that are involved in supporting us, and even in the latest operations, as you know.

So we have -- we'll be watching this one. Right now, we feel that other than the ANA money and the Pakistan money, we are in reasonable shape. Are we in perfect shape? No. But are we in good enough shape to move along? Yes.


Q: Yeah, sir, what is the -- how soon does this have to pass? I mean, when do you run out of money?

SR. DEFENSE OFFICIAL: Well, I mean, we're being told by some of the services that in some of their accounts, they're out of money by the beginning of May. If it's doable -- and, you know, I mean, that's not really up to us, it's up to the Congress; you know, we're going to send this thing up tomorrow -- we would love to see this thing pass before the Easter recess, which is -- they break up, I think, April 11th. But, you know, that's not up to us. The Congress can be very quick. I mean, look at what they did in September of '02 (sic). I mean, it was remarkable. So, you know -- September of '01, I mean. Yeah, September '01.


Q: People are going to read that and get a little scared, because you talked about the personnel accounts being one of the accounts that are possibly running out of money. You don't mean that -- if Congress does not pass this, the troops are going to continue getting paid, is that correct?

SR. DEFENSE OFFICIAL: Well, there will be a problem finding money for the personnel accounts. What'll -- you know, if worse comes to the worse, we're going to have to see some drastic actions done with the troops.

Look, we -- we have a shortfall. There's no two ways about it. And this supplemental is geared to meeting that shortfall. How will the services manage their personnel accounts? I mean, they'll do the best they can to mitigate the problem for as long as possible, but if your monies are running out, they're running out. And we're spending money on Iraq every day. So, you know, we've got a serious problem here.

Q: Sir?

SR. DEFENSE OFFICIAL: I am told by my handlers that I can only ask -- how many more?

STAFF: Two more.

SR. DEFENSE OFFICIAL: Two more. Okay, who hasn't asked one?

Q: Sir?

SR. DEFENSE OFFICIAL: You haven't asked yet.

Q: Thank you. Is any of the coalition support funding earmarked for Israel?


Q: Has not Israel made a request, though, for funds to help them deal with their --

SR. DEFENSE OFFICIAL: This is pure Defense Department funding. And as I said, the arch example is Pakistan, where they have expended funds on their forces to do things that we ask them to do; we have then reviewed those expenditures, and then -- and we try to reimburse them. What you're asking about is requests for funds for all kinds of things, but not for that.

Q: Well, my understanding is that the Israelis were hoping to get additional funds just to pay for the added strain on their military to maintain a state of alertness because of the Iraqi threat.

SR. DEFENSE OFFICIAL: That's a state of alert to protect their own country.

Q: But from the Iraqi threat.

SR. DEFENSE OFFICIAL: Fine, but it's a state of alert to protect their own country from the Iraqi threat. When Pakistan - which, after all is said and done, isn't exactly totally sanguine about India -- moves its forces from the Indian border to help us, that's a little different.

Q Sir, the $489 million --

SR. DEFENSE OFFICIAL: Oh, my; they've all caught this idea of "sir"; I love it. (Laughter.)


Q: (Off mike.)

Q: I'm going to call you "sir," regardless.

The $489 million that you have, is that allotted only to fight oil fires? And if so --

SR. DEFENSE OFFICIAL: No, it's not only to fight oil fires, but it's to fight -- that is remediation operations, essentially environmental-related.

Q: And is there a private company that has been given a contract to help aid in this that you have awarded?

SR. DEFENSE OFFICIAL: I'm not aware that they've been -- I know that there's talk of giving contracts. I haven't followed the contracting process.

Q: But is there a particular figure from that 489 that you can give us that's allotted to --

SR. DEFENSE OFFICIAL: We'll try to get it for you. We'll try to get it for you.

Q: Is there a way to break down this transitional and stability?

SR. DEFENSE OFFICIAL: So much for your two extra questions. (Laughter.) All right. What, what?

Q: Transitional and stability phase? Can we get a sense of how much of that is actually humanitarian or --

Q: (Health care ?) or --

SR. DEFENSE OFFICIAL: Well, you still have the oil fields; it's relatively small. The humanitarian -- again, I mean, that's why we have this as one sort of floating account. We have to see. We have to see also who else is contributing on the humanitarian side. That's not just us. In fact, we would hope the rest of the world will kick in in a big way.

Q: But is this likely to keep forces there as a -- sort of in a (past ?) post-conflict phase? I mean, is that --

SR. DEFENSE OFFICIAL: And for a very delimited period. This is not the idea of keeping them there a whole bunch of years to do this kind of stuff. So that's a different issue.

Q: But sir, how many soldiers? What's the assumption there for a post-conflict force? General Shinseki got into a lot of trouble here in this building when he gave a candid opinion. What is the --

SR. DEFENSE OFFICIAL: Do you mean the rest of us don't give candid opinions?

Q: Sometimes not. (Laughter.) What's the assumption on this one in terms of the force structure involved in a post-conflict?

SR. DEFENSE OFFICIAL: It's still flexible. And the reason that it is, is that we are talking about assumptions about how much -- A, how much resistance you've got; B, how much internal cooperation you've got. And so I would say that I wouldn't want to be held to a specific number.

STAFF: Thank you, folks.


Q: Thank you.


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