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Commentary

The Costs of NATO Expansion
What Are the Administration and NATO Hiding


     
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In the debate on expanding the NATO alliance, the Clinton administration’s case lost what meager credibility it once had. That is especially true on the critical issue of what the expansion will cost. From the beginning, the administration was reluctant to talk about costs for fear that their magnitude would torpedo the whole initiative. It took studies by the Congressional Budget Office and RAND and congressional prodding to force the administration to make its own (deeply flawed) effort. That low-ball estimate of $27 to $35 billion was largely based on choosing an amount that Congress would find acceptable, rather than costing a detailed list of the military requirements needed to provide the required defense for the three new members (Poland, Hungary, and the Czech Republic). Not surprisingly, the administration published scant details about the assumptions underlying its estimate, and Congress was justifiably skeptical about the administration''s low numbers.

Then France and Germany declared that they would not pay any of the additional costs of expansion. After Secretaries Albright and Cohen realized that the allies’ refusal to accept an expansion with any significant costs would pose a greater threat than congressional skepticism to the administration’s most important foreign policy initiative, they scrambled to assert that the administration had overestimated the costs. They claimed--contrary to what leaked NATO documents and experts inside and outside the U.S. government concluded--that the military infrastructure in the three new members was in better shape than expected, thus reducing the improvements needed and the associated costs. At the same time, NATO commanders suddenly claimed that the security threat to new members had declined during the brief period (less than one year) even since the administration''s cost estimate was completed. Such miraculous revelations occurred just as embarrassed U.S. officials accepted the astonishingly low NATO estimate of expansion-induced increases in alliance budgets--a mere $1.5 billion over 10 years--that they had earlier rejected for its faulty assumptions.

NATO’s bureaucracy reports that the details of that estimate are classified and will remain so indefinitely. The convenient suppression of information prevents outside experts from critically examining the assumptions and methodology of the estimate. What are the administration and NATO hiding?

Of course, in any cost estimate the devil is in the detailed assumptions and costing methods used. To date, of all the cost estimates, only the Congressional Budget Office’s (CBO''s) contained detailed assumptions and methodology. Even when that estimate is made comparable with the administration’s estimate--that is, when it is adjusted to reflect the administration’s questionable assumptions--the projected costs are at least twice as much ($70 billion) as those estimated by the administration. Using alternative assumptions, the CBO estimated that costs could rise to as much as $125 billion.

The administration’s grossly inaccurate estimate of the costs for the operation in Bosnia should provide a warning to Congress and the public concerning the probable costs of NATO expansion. The administration initially estimated that the operation would cost the United States less than $2 billion. That total is now $8 billion and the meter is still running.

At the very least, the debate on costs should not be conducted in a fog of secrecy. Parliamentarians in other NATO countries have protested the classification of NATO‘s cost estimate. The U.S. Congress-the most powerful legislative body in the world, with constitutional prerogatives of advice and consent on treaties and the power of the purse--should do the same. Before voting on this major extension of U.S. security guarantees to new nations, Congress should know that an accurate estimate of the cost has been made using defensible assumptions and methodology. The convenient suppression of details in the administration’s and NATO’s low cost estimates--especially given the administration’s history of inaccurate cost projections on other initiatives--should make Congress doubly suspicious.


Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and Ph.D. in national security policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, and he spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. He is author of the books Partitioning for Peace: An Exit Strategy for Iraq, and Recarving Rushmore.

This article is reprinted with permission of the Cato Institute. Copyright 1998, Cato Institute.

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