The nonpartisan Congressional Budget Office (CBO) has estimated the cost of "prosecuting" a war against Iraq at up to $9 billion per month, on top of an initial outlay of up to $13 billion for the deployment of troops to the Persian Gulf region.

In a letter to the House and Senate budget committees, CBO provided Congress with cost estimates for an armed conflict with Iraq, based on recent similar U.S. military operations including those in the Balkans, Afghanistan, and the 1990 Gulf War. 

Summary of Iraq War Cost Estimates
CBO estimated the following costs for an Iraq war:

• Initial deployment of troops: $9 billion to $13 billion
• Conducting the war: $6 billion to $9 billion per month
• Returning forces to US: $5 billion to $7 billion
• Temporary occupation of Iraq: $1 billion to $4 billion per month

Unknown Factors Involved
In arriving at their estimates, CBO acknowledged that exact costs would depend on several "unknown factors" including:

• actual force size deployed
• duration of the conflict
• strategy employed
• number of casualties
• military equipment lost
• need for reconstruction of Iraq's infrastructure

Assumptions Made in CBO Cost Estimates
CBO analysts assumed two possible war-fighting alternatives the Defense Department might employ in operations against Iraq, one emphasizing use of ground troops, the other emphasizing use of air power.

The Ground Troop Alternative
Under the "Heavy Ground" option, the U.S. would deploy about five U.S. Army divisions and five U.S. Air Force tactical fighter wings to the Persian Gulf region. CBO estimates that the cost of deploying the Heavy Ground force to the Persian Gulf would be about $13 billion; after that, the incremental cost of prosecuting a war in Iraq would reach just over $9 billion during the first month of combat and subsequently fall to about $8 billion a month. Costs to return Heavy Ground option personnel to the U.S. would be about $7 billion.

The Air Power Alternative
Relying more on air power, the "Heavy Air" option, according to CBO, would require deployment of two and one-third U.S. Army divisions and 10 U.S. Air Force tactical fighter wings. The cost of deploying the Heavy Air force to the Persian Gulf would be $9 billion, and the incremental cost of prosecuting a war would reach $8 billion during the first month of combat, falling to about $6 billion a month. Costs to return Heavy Air option personnel to the U.S. would be about $5 billion.

Duration of a War with Iraq
Recognizing that the duration of an Iraq war would significantly affect their cost estimates, CBO projected two possible scenarios; a short war and an extended war.

A Short War with Iraq
Should Iraqi leader Saddam Hussein, his deputies and military commanders give in quickly, says CBO, the war in Iraq might last no longer or cost much more than the 1990 Gulf War.

An Extended War with Iraq
Should Hussein decide to fight and use chemical or biological weapons (CBW), the duration of the war could be significantly extended. Engaging in protracted urban warfare and the need to decontaminate personnel and equipment affected by CBW attacks would result in both increased costs and, of course, U.S. casualties.

Could Iraqi Oil Help Pay Some Costs?
In its estimates, CBO also analyzed the suggested possibility that proceeds from sales of Iraqi oil could be used to offset the costs of rebuilding damaged infrastructure and occupation of Iraq. CBO found this idea not to be a reasonable option because:

• "Iraq is already a major exporter of oil and until recently has been producing at close to its peak sustainable production capacity of 2.8 million barrels a day. 
  
  
• "Currently, about 80 percent of Iraq's oil production is being used to purchase imports under the United Nations Oil for Food Program or for domestic consumption. And, in the near term, Iraqi oil exports cannot be expanded without large-scale investment and development of infrastructure. Thus, the primary source of additional funds for reconstructing Iraq would be the proceeds from the legitimate sale of the approximately 400,000 BPD that are currently smuggled out of the country to pay for the importation of items that violate United Nations sanctions.
  
  
• "Assuming that a post-conflict Iraq complied with all U.N. resolutions and removed the basis for the current economic sanctions, and assuming also that its oil production infrastructure was undamaged, Iraq could pay for reconstruction costs by using funds generated from that 400,000 BPD of oil and still have enough to pay for its country's current level of imports. At today's oil prices, production at that level would amount to approximately $3 billion a year."