Pentagon reveals cost of Libya campaign
Washington - The United States has spent $550-million so far on military operations in Libya, but expects costs to stabilise at $40-million per month once US forces are reduced and Nato takes over greater control, the Pentagon said on Tuesday.
The Defence Department said about 60 percent of the money was spent on missiles and bombs used in Libya, where Muammar Gaddafi is battling with rebel forces seeking to oust him. The rest was for bringing troops to the region and operations.
“It's fair to say that the operation will be in the hundreds of millions of dollars,” Admiral James Stavridis, who is Nato’s Supreme Allied Commander, Europe, and commander of US European Command, told a US Senate hearing.
The cost of the Libyan military operations, while small in comparison to the Iraq and Afghanistan wars, has exacerbated concerns about overall defence spending levels at a time when the US federal budget deficit is projected to hit $1.4-trillion this year.
Two other Senate subcommittees grilled defence officials about continuing cost overruns on weapons programmes on Tuesday, with both Democrats and Republicans concluding that more work was needed to rein in defence spending.
“I do not believe there is any part of the budget that can be off limits as we look for savings,” said Senator Claire McCaskill, the Democrat who chairs the Senate Armed Service Committee's subcommittee on readiness and management support.
The Pentagon is already working on its budget plan for fiscal 2013, but it is expected to face growing pressure to deliver cuts beyond the $78-billion it has promised for the coming five years.
Pentagon spokesperson Navy Commander Kathleen Kesler said it was hard to estimate future costs, but the Pentagon expects to spend another $40-million on operations in Libya in the coming three weeks as the United States reduces its forces in the region and Nato assumes more responsibility.
“Future costs are highly uncertain,” although the Pentagon expected ongoing operations in Libya to cost about $40-million per month, if US forces stayed at the lower levels currently planned and the operation continued, she said. The estimates do not include the cost of the F-15 fighter plane that went down over Libya due to mechanical failure, Kesler said.
Defence analyst Byron Callan, at Capital Alpha Partners, said the military operations in Libya were not expected to have a material effect on US Defence stocks, especially now that aircraft have been positioned at bases in Italy, reducing in-flight refuelling needs.
Callan said he did not expect the military action in Libya to disrupt the Pentagon's investment accounts, but he also did not see it generating enough replacement orders for equipment to have a big effect on US Defence company earnings.
Defence analyst Loren Thompson at the Virginia-based Lexington Institute said the actual amount being spent was much higher, after factoring in the cost of maintaining forces that could be deployed on a moment's notice.
“So what looks like an inexpensive military operation in Libya is actually costing taxpayers about $2-billion per day, because that's what the Pentagon and other security agencies of the federal government spend to maintain a posture that allows the military to go anywhere and do anything on short notice,” he wrote in a blog on the Forbes.com website.
The Government Accountability Office on Tuesday reported that the total acquisition cost of the Pentagon's 98 biggest weapons programmes rose by $135-billion over the past two years to $1.68-trillion, and said half of major arms programmes did not meet meet cost goals set by the department.
GAO, the investigative arm of Congress, said 80 percent of programmes experienced an increase in unit costs from initial estimates, reducing the Pentagon's buying power.
Lawmakers, worried about the federal deficit, are growing increasingly frustrated about chronic Pentagon acquisition issues. Top Pentagon officials say there are reviewing programmes earlier, and restraining the military's desire for ever-better weapons, but note that cultural change is slow and hard. - Reuters
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