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The authors of the Three Trillion War: The True Cost of the Iraq Conflict say the future costs of caring for wounded Iraq War veterans may be vastly more than government estimates.
"Some of the issues in Iraq and in the Middle East are not entirely under our control," says co-author Linda J. Bilmes. "But the way we take care of the veterans is entirely under our control. It's a matter of national attention and priorities."
Bilmes, a lecturer in public policy at Harvard University's Kennedy School of Government, did the research underlying veterans'-care cost projections in the new book, co-authored with Columbia University economist Joseph E. Stiglitz, winner of the 2001 Nobel Prize in economics.
Stiglitz and Bilmes base their projections on lifetime costs for all care and government compensation for veterans who served in Iraq from 2003 to 2017, including Social Security payments. The projections range from a minimum of $371 billion under a reduced combat scenario to a more "realistic" sum of $630 billion.
The Congressional Budget Office (CBO), using the same military scenarios utilized by Stiglitz and Bilmes, calculated its own projections, which differ enormously from the Stiglitz-Bilmes estimates, in part because the CBO didn't try to project lifetime care costs. As a result, the CBO estimates that veterans' benefits and services in 2001-2017 would cost $12 billion under a more favorable reduced-combat, scenario, or $13 billion under a scenario that envisions more fighting.
The "best-case" scenario (the Stiglitz-Bilmes term) involves a gradual drawdown of U.S. forces in Iraq and Afghanistan by 2012 to 55,000 stationed there long-term (or 30,000 by 2010, in one of the CBO scenarios) and assigned to non-combat duty. A more realistic scenario, according to Stigliltz and Bilmes, would involve continued combat and drawing troops down to about 75,000 by 2013.
"The funding needs for veterans' benefits comprise an additional major entitlement program along with Medicare and Social Security," they write.
Numerous other assumptions about federally funded care for vets are built into the Stiglitz-Bilmes projections, including:
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Forty-eight percent of Iraq-Afghanistan veterans will seek treatment from the Department of Veterans Affairs (VA). That projection is based on an average of five disabling conditions claimed by Iraq-Afghanistan veterans, compared to the average of three disabling conditions claimed by Persian Gulf War veterans and on the 45 percent claim rate by Gulf War veterans and the 37 percent rate by Iraq-Afghanistan veterans thus far, of which 88 percent have been granted, or partially granted.
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The number of post-traumatic stress disorder (PTSD) claims will "rapidly" pass the 19,000 filed when Stiglitz and Bilmes did their research in 2005-2007; the average payment per PTSD claim will remain at $7,109, the 2007 amount. They base that projection in part on a Government Accountability Office (GAO) finding last year that processing a PTSD claim can take up to a year. An earlier GAO report notes that the "intense and prolonged combat" that characterizes service in Iraq and Afghanistan puts veterans of those conflicts at high risk for PTSD.
Bilmes and Stiglitz based their calculations on official data. But they were charting new territory. Neither the executive branch, nor the GAO nor the Congressional Research Service has made public any long-range projections of the costs of Iraq War veterans' care, says Bilmes, who has made a specialty of calculating the cost of veterans' care. She adds that a VA economist's request for a professional conference last year on her methodology was canceled by the agency but that she then met with then Veterans Affairs Secretary R. James Nicholson, at his request, to discuss her calculations.
The longest-range projections of the costs of caring for veterans are those by the CBO. CBO Director Peter Orszag wrote a detailed blog posting laying out his agency's differences with the Stiglitz-Bilmes numbers. The differences go beyond the lifetime versus year-to-year costs.
"It may appear surprising to some readers, but veterans of the recent conflicts, on average, require less medical care from VA than veterans of other conflicts," Orszag wrote, noting also that he is a friend of Stiglitz, with whom he has co-authored papers. For instance, he wrote, the VA in 2006 actually spent only an average of $2,610 per veteran — an average that reflects a relatively low incidence, so far, of more expensive PTSD treatment.
And Stiglitz and Bilmes seem to have failed to account for disability claims by veterans who didn't serve in Iraq or Afghanistan, Orszag said. Those projected costs should be subtracted from war-related projections, he wrote.
And he concludes that because of the differing spending estimates, and related disagreements, Stiglitz and Bilmes over-estimated VA medical costs by at least $100 billion.
Stiglitz notes, for his part, that CBO didn't take into account data showing that PTSD claims escalate with repeated deployments. "We have not yet gotten back those who've been deployed, two, three, four times. Our number is an underestimate." CBO may have relied too heavily, he says, on initial health-care costs for Iraq veterans, which arise more from diagnosis than from treatment, which is more expensive.
Paul Sullivan, executive director of Veterans for Common Sense, a Washington-based nonprofit that advocates more efficient treatment, says of the Stiglitz-Bilmes calculations: "I know with absolute certainty that their estimates are low." For instance, he points out, veterans with other options — such as private insurance or a free county clinic — may avoid the VA after hearing of long waits for treatment.
Sullivan, a veteran of the 1991 Gulf War and a former VA project manager, adds, "The VA is the best place to go for mental health care, traumatic brain injury and prosthetics, because they have real combat injury experience of 60-plus years."
But veterans' needs are going unmet because the agency is underfunded, say advocates. Veterans for Common Sense and a California-based organization, Veterans for Truth, have filed a class-action lawsuit against the VA claiming its system for processing PTSD claims has essentially collapsed under the weight of growing demand. "Delays have become an insurmountable barrier preventing many veterans from obtaining health care and benefits," the organizations said in the 2007 complaint launching the suit.
The Bush administration takes the position that "wounded warriors" — the term now in favor — are getting all the service they require. "I believe that we are getting adequate funding," Michael J. Kussman, the VA's undersecretary for health, told the Senate Veterans Affairs Committee last year. "And with your support and the administration's support, we've been very appreciative of the very significant increases in the budget over the last couple years."
Appropriations to the VA for all operations have risen from $47.95 billion in fiscal 2001 to $87.6 billion in the present fiscal year. The latter amount includes about $3 billion in emergency supplemental funding.
For Stiglitz and Bilmes, the VA's reliance on supplementals shows that the agency is pushed past its limits. "The pattern of underfundng . . . has repeated itself every year of the war," they write about the stream of supplemental funds. "The VA has told Congress that it can cope with the surge in demand, despite overwhelming evidence to the contrary."
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