REVIEW & OUTLOOK
What $87 Billion Buys
Compare it to the price of another 9/11.
Thursday, September 11, 2003 12:01 a.m. EDT
Having demanded for weeks that President Bush send up a complete bill for the war in Iraq, the spending barons in Congress are now reacting with shock and awe at the size of his $87 billion request.
Democrats and even some Republicans are shouting "no blank check" and suddenly morphing into defenders of the Treasury. West Virginia's Robert Byrd, of all people, declared that "Congress is not an ATM," thus contradicting 45 years of Senate service in one sentence. Asked if they'd vote to approve the money, every Democratic Presidential contender at Tuesday night's debate offered a reason for voting no in part or full.
All right, as long as Congress has its calculators out, let's do some comparison anti-terror shopping. We know what $87 billion is intended to buy: Support for American troops who are taking the battle to terrorists on their own turf and trying to build a stable, pluralistic Iraq in the heart of the Middle East. But how about comparing that price tag, large as it is, to what we already know about the cost of a single day of terror in the U.S., two years ago today.
We couldn't find one comprehensive figure for 9/11, but the piecemeal estimates are depressing enough. The 3,000 casualties in New York City that day lost $7.8 billion in prospective income, according to the Federal Reserve Bank of New York. The same Fed report estimates $18 billion to clean up, rebuild and replace the contents of Ground Zero, plus another $3.7 billion for the subway and utilities. Congress sent $21 billion to New York for those direct damage costs and will pay another $4 billion for the victims fund. The attack also reduced wages and salaries in New York industries by as much as $6.4 billion, and Congress is paying $700 million to repair the Pentagon.
Then there are all of the downstream economic and security costs. Ross C. DeVol of the Milken Institute estimates that September 11 created a 1.3 million net job loss and decreased GDP by $150 billion. The insurance industry was on the hook for $50 billion. Airlines lost $11 billion as travelers stayed home, and two carriers went bankrupt even after a $15 billion federal bailout.
Meanwhile, the Fed report notes that in Fiscal Year 2003 the Administration budgeted $38 billion on new border security, protection against biological threats and emergency preparedness. States will spend another $1.3 billion for homeland security, while the private sector is spending $33 billion for new "protective services."
Even assuming overlap in these numbers, that one day of terror cost America hundreds of billions of dollars. And most of this was a deadweight loss. It has been spent merely to replace what was destroyed or to finance security that simply allows Americans to go about their normal business. This is the cost that needs to be considered next to Mr. Bush's $87 billion preventive investment in the war on terror.
Another apt comparison is the Marshall Plan to rebuild our defeated enemies after World War II. Most estimates are that the U.S. spent 2% of gross national product, or some $90 billion in today's dollars, during its years reconstructing Europe. From the vantage point of 50 years, that investment looks like a bargain.
Or consider the payoff from Ronald Reagan's huge defense buildup of the early 1980s. That spending was also attacked as wasteful or for diverting scarce resources from domestic needs, but after the fall of the Soviet Union we learned that the buildup convinced the Russians they could never win the Cold War. After the Berlin Wall fell, Americans realized one of the greatest peace dividends in history.
In one sense, we've already realized one dividend from the Iraq war. The U.S. spent close to $30 billion over 12 years to "contain" Saddam. Enforcing the no-fly zones also required a U.S. presence in Saudi Arabia, which was unpopular in that country and was cited in Osama bin Laden's fatwa against America. With Saddam gone, the U.S. is removing its combat forces from the Kingdom by year-end. And last week the USS Nimitz steamed out of the Gulf--the first time in six years the U.S. dared to leave the region without an aircraft carrier.
Looking for a political line of attack, some Democrats are saying they'll agree to money for "the troops" but not for rebuilding Iraq--as if the two can be separated. They've been attacking President Bush for misjudging the burden of stabilizing Iraq, but now they insist that they'll only pay for Kevlar vests and ammunition but not to build the electricity and water services that will help win the support of the Iraqi allies our troops need to prevail.
We certainly agree that the rest of the world is also at risk from terror and should help foot part of this bill. The Bush Administration will soon ask it to do so. But if this second anniversary of September 11 does nothing else, it should remind Americans that an $87 billion investment to prevent a terrible repeat is cheap at the price. |
