The War on Terror is a military campaign launched by President George W. Bush in response to the al-Qaida 9/11 terrorist attacks. It includes the Afghanistan War and the War in Iraq, and it added $2.4 trillion to the debt as of the FY 2020 budget.
President Bush announced the War on Terror on Sept. 20, 2001, in a speech to Congress. "Our war on terror begins with al-Qaida," he said, "but it does not end there. It will not end until every terrorist group of global reach has been found, stopped, and defeated."
How Spending for the War on Terror Is Allocated
Spending for the War on Terror includes two major components. The first is spending for overseas contingency operations (OCO). Congress appropriates these emergency funds, and they aren't subject to budget limits such as sequestration.
Second are the significant increases in the base budget for the Department of Defense. Spending rises along with the number of boots on the ground for these two wars. Congress also beefs up the domestic force that supports foreign operations and funds the development of new technology, such as the F-35 fighter jet and drones.
The U.S. military budget includes the Department of Defense base budget and the OCO. Departments that also played roles in the War on Terror—such as Veterans Affairs, Homeland Security, the State Department, and the National Nuclear Security Administration—have separate budgets.
War on Terror Timeline and Costs
Here are the War on Terror costs by budgetary years, courtesy of the National Defense Budget Estimates for FY 2020. These amounts strictly cover the budgets for the War on Terror and the overseas contingency operations.
FY 2001—$22.9 billion: The United States attacked the Taliban for hiding al-Qaida's leader, Osama bin Laden. The Taliban lost power in December 2001, and Hamid Karzai became interim administration head. That same month, ground troops pursued bin Laden into the Afghan foothills. He escaped to Pakistan on December 16, 2001.
FY 2002—$16.9 billion: Bush shifted his focus from bin Laden after receiving intelligence in October 2002 that Iraq's leader, Saddam Hussein, was building weapons of mass destruction. In November, Congress passed the Homeland Security Act, which created a stand-alone, cabinet-level department to coordinate terrorism intelligence. It unified 22 agencies that handled domestic security.
FY 2003—$72.5 billion: Homeland Security officially opened its doors in March. The United States launched the Iraq War on March 19. The Hussein regime fell in April. The new goal in Afghanistan was to end U.S. involvement and turn it over to NATO's peacekeeping mission.
FY 2004—$90.8 billion: The War in Iraq escalated to control insurgents. Photos revealed torture at the Abu Ghraib prison. That fueled more local resistance. Afghanistan created a Constitution while bin Laden threatened another terrorist attack. Afghanistan held its first free presidential election.
FY 2005—$75.6 billion: The U.S. military protected Afghans from Taliban attacks for their first free parliamentary election. Iraq voted on a new constitution and parliament.
FY 2006—$115.8 billion: The new Afghanistan government struggled to provide basic services, including police protection. Violence increased. In Iraq, U.S. troops quietly executed Saddam Hussein.
FY 2007—$166.3 billion: A surge of 20,000 extra U.S. troops flew to Iraq to keep the peace until the United States-backed Shiite leaders could gain better control.
FY 2008—$186.9 billion: Violence escalated in Afghanistan after U.S. troops accidentally killed civilians. Bush announced all U.S. forces would be out of Iraq by 2011.
FY 2009—$145.7 billion: Iraq forces regained control of Baghdad's Green Zone. In April, just a few months after taking office, President Obama sent 17,000 more troops to Afghanistan. He promised to send another 30,000 in December. He focused on attacking the resurgent Taliban and al-Qaida forces on the border with Pakistan. Voters reelected Karzai amidst accusations of fraud. Obama announced he would draw down troops in 2011.
FY 2010—$162.4 billion: Obama funded an orderly wind-down of U.S. troops in Iraq by 2011. Surge forces went to Afghanistan. NATO agreed to turn over all defense to Afghan forces by 2014.
FY 2011—$158.8 billion: Special Forces took out Osama bin Laden on May 2, 2011. Obama announced he would withdraw 10,000 troops from Afghanistan by the end of the year, and 23,000 by the end of 2012. Troops left Iraq by December.
FY 2012—$115.1 billion: Obama announced the withdrawal of another 23,000 troops from Afghanistan in the summer. Both sides agreed to hasten U.S. troop withdrawal to 2013. U.S. contractors stayed in Iraq to protect American interests.
FY 2013—$82 billion: U.S. forces shifted to a training and support role. The Taliban and the United States reignited peace negotiations, causing Karzai to suspend his negotiations with the United States.
FY 2014—$84.9 billion: Obama announced the final U.S. troop withdrawal, with a goal of only 9,800 remaining at the end of the year.
FY 2015—$63 billion: Troops trained Afghan forces.
FY 2016—$58.9 billion: Troops returned to Iraq to train local soldiers to fight the Islamic State group. The DoD also requested funds for training efforts in Afghanistan and training and equipment for Syrian opposition forces. The funds also included support for NATO and responses to terrorist threats.
FY 2017—$82.5 billion: The DoD requested $58.8 billion for Operation Freedom Sentinel in Afghanistan, Operation Inherent Resolve in Iraq and the Levant, increased European support, and counterterrorism. President Trump requested that Congress add another $24.9 billion for the DoD and $5.1 billion for OCO to fight the Islamic State group.
FY 2018—$65.1 billion: Trump's budget expanded the Navy, Air Force, Army, and Marines. It also focused on cybersecurity.
FY 2019—$68.8 billion: The budget aimed to prevent any resurgence of the Islamic State group by working with partner forces and agencies to stabilize liberated cities, secure borders, retain territorial control, and disrupt its ability to attack the United States.
FY 2020—$164.6 billion: This budget increase was due to the military focus on dealing with remnants of the Islamic State group.
War on Terror Costs Summary Table (in billions)
|FY||WoT/OCO (in billions)|
Who Spent More—Bush, Obama, or Trump?
President Bush is responsible for the budgets from FY 2002–FY 2009. The total for those years is $870.5 billion.
President Obama campaigned on defense reduction. He even dropped the phrase "War on Terror." But his spending on the Iraq and Afghanistan wars still totaled $807.6 billion from FY 2010–2017. That's only 7.2% less than President Bush's expenditure.
President Trump campaigned on increasing defense spending. He added $30 billion to Obama's FY 2017 budget. Including his 2021 projected budget of $68.3 billion in OCO, Trump's total War on Terror spending over his four-year term was $366.8 billion.
Effect on the U.S. Economy
Since 2001, the War on Terror has added nearly $2 trillion, or more than 35%, to the U.S. debt. It also raises the U.S. budget deficit. Defense spending is such a big chunk of the budget that there is no realistic way to reduce either without cutting it.
The U.S. spends far more on defense as a percentage of GDP than its NATO allies do.
The War in Afghanistan has lasted longer than the Vietnam War. The War in Iraq killed 4,418 U.S. soldiers and wounded 31,994 more. Taxpayers have spent more than $1.52 trillion on the wars in Afghanistan, Iraq, and Syria combined.
The real cost of the War on Terror is not just what it has added to the debt. It's also the lost jobs that those funds could have created. By some estimates, every $1 billion spent on defense creates 8,555 jobs and adds $565 million to the economy. That same $1 billion given to you as a tax cut would have stimulated enough demand to create 10,779 jobs and put $505 million into the economy as retail spending. And $1 billion in education spending could add $1.3 billion to the economy and create 17,687 jobs.
Using this model, the $2 trillion spent on the War on Terror created 17 million jobs and added over $1.1 trillion to the economy. But if it had gone toward education instead, it would have created over 35 million jobs. It would have added $2.6 trillion to the economy.