Iraq war could cost taxpayers $2.7 trillion

The cost of war

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NEW YORK (CNNMoney.com) -- As the Iraq war continues with no clear end in sight, the cost to taxpayers may balloon to $2.7 trillion by the time the conflict comes to an end, according to Congressional testimony.

In a hearing held by the Joint Economic Committee Thursday, members of Congress heard testimony about the current costs of the war and the future economic fallout from returning soldiers.

At the beginning of the conflict in 2003, the Bush administration gave Congress a cost estimate of $60 billion to $100 billion for the entirety of the war. But the battle has been dragging on much longer than most in the government expected, and costs have ballooned to nearly ten times the original estimate.

William Beach, director of the Center for Data Analysis, told members of Congress that the Iraq war has already cost taxpayers $646 billion. That's only accounting for five years, and, with the conflict expected to drag on for another five years, the figure is expected to more than quadruple. Sen. Charles Schumer, D-N.Y., told members of Congress that the war costs taxpayers about $430 million per day, and called out the Bush Administration.

"It is long past time for the administration to come clean and account for the real costs of the war in Iraq," said Schumer. "If they want to disagree with our estimates or with other experts ... fine - they should come and explain why."

The Bush Administration, which was invited to give testimony, declined to participate.

The Pentagon has previously said that the war costs approximately $9.5 billion a month, but some economists say the figure is closer to $25 billion a month when long-term health care for veterans and interest are factored in.

Health care: In testimony before the committee, Dr. Christine Eibner, an Associate Economist with research firm RAND, said advances in armor technology have kept alive many soldiers who would have been killed in prior wars. But that has added to post-war health care costs for veterans, especially for "unseen" wounds like post traumatic stress disorder, major depression and traumatic brain injury.

Two-year post-deployment health care costs for the 1.6 million service members currently in Iraq and Afghanistan could range from $4 billion to $6.2 billion, according to Eibner. For one year of treatment, the costs are substantially lower, ranging from $591 million to $910 million. Eibner admitted that the study did not take into account long term care, and her estimates probably underestimate the total costs.

However, Eibner noted that an increasing number of soldiers are not seeking the care that they need, which affects their ability to get and maintain jobs. And, that, she said, must change.

"Many service members are currently reluctant to seek mental health treatment due to fear of negative career repercussions," said Eibner. "Policies must be changed so that there are no perceived or real adverse career consequences for individuals who seek treatment."

Unemployment: Furthermore, many veterans who recently completed their service are coming back to a difficult job and housing market.

Among veterans who completed their service within the last 1 to 3 years, 18% were unemployed, and 25% earned less than $21,840 a year, according to a recent report commissioned by the Department of Veterans Affairs.

"Trying to convince [job interviewers] that my service will translate into skills ... at a bottling factory or a distributing company is almost like you're speaking French to someone who doesn't speak French," said Iraq and Afghanistan Veterans of America policy associate Tom Tarantino.

Montana Gov. Brian Schweitzer agreed, saying the government does a poor job at readying veterans for post-Army life.

"We haven't figured out how to convert a warrior to a citizen yet," Schweitzer told the committee.

Foreclosure: Many soldiers who come home from active duty are also finding difficulty keeping their homes.

"Military families are already shouldering heavy burdens to care for and support families while their loved ones are serving abroad or recovering at home," said Schumer. "Knowing that so many more are losing their homes to foreclosure is heartbreaking -- and its just plain wrong."

The senator said that Army personnel returning from duty are at a 37% higher risk of foreclosure, because the areas populated by military families have substantially larger foreclosure rates.

"Veterans of Iraq and Afghanistan deserve better," testified Tarantino.

Tarantino recommended Congress quickly sign into law an update to the World War II GI Bill, which would help ease the economic hardships returning solders are feeling.

"More than any other single piece of legislation, the GI Bill will make a difference in the economic futures of the troops returning every day from Iraq and Afghanistan," he said.