The Terrible Cost of the War in Afghanistan

The Terrible Cost of the War in Afghanistan

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Plus, a surprise deal on surprise medical bills
Monday, December 9, 2019

The Terrible Cost of the War in Afghanistan

The war in Afghanistan is the longest armed conflict in U.S. history, and throughout the 18 years of fighting, U.S. officials have publicly said they were making progress. Yet a new investigative report by Craig Whitlock of The Washington Post based on thousands of pages of federal documents shows that many senior officials knew the reality was very different than their optimistic public pronouncements.

“The American people have constantly been lied to,” John F. Sopko, the special inspector general for Afghanistan reconstruction, told The Post.

The documents, which the Post says it obtained under the Freedom of Information Act after a three-year legal battle, were created as part of a federal project studying the failures in Afghanistan and include notes of interviews with key players in the war.

“With most speaking on the assumption that their remarks would not become public, U.S. officials acknowledged that their warfighting strategies were fatally flawed and that Washington wasted enormous sums of money trying to remake Afghanistan into a modern nation,” Whitlock writes. “Several of those interviewed described explicit and sustained efforts by the U.S. government to deliberately mislead the public.”

The cost of the war: More than 775,000 troops have deployed to Afghanistan, and 2,300 died there while 20,589 were wounded, Whitlock writes, citing Defense Department data. As for the financial cost:

“Since 2001, the Defense Department, State Department and U.S. Agency for International Development have spent or appropriated between $934 billion and $978 billion, according to an inflation-adjusted estimate calculated by Neta Crawford, a political science professor and co-director of the Costs of War Project at Brown University.

“Those figures do not include money spent by other agencies such as the CIA and the Department of Veterans Affairs, which is responsible for medical care for wounded veterans.”

One unidentified official at the United States Agency for International Development told interviewers in 2016 that officials on Capitol Hill only cared about spending and the burn rate of funding they provided. “We were given money, told to spend it, and we did — without reason,” the unidentified official said. And an unidentified contractor reported being told to give out $3 million a day for projects in one Afghan district.

The New York Times’s Sarah Almukhtar and Rod Nordland offer a more detailed look at the money spent on the war, which they say totals more than $2 trillion so far — and will end up being much more over time, with little to show for it.

Here’s how the Times broke down the costs and results:

  • $1.5 trillion spent to wage war – but the Taliban controls much of the country.
  • $10 billion spent to suppress the drug trade – but Afghanistan provides about 80% of the world’s illicit opium.
  • $87 billion spent to train the Afghan army and police – but local forces still can’t support themselves.
  • $1.4 trillion to care for military veterans over the next 40 years.
  • $600 billion on interest through 2023 for the debt-financed war.

Read more at The Washington Post and The New York Times.

Surprise Deal to Protect Patients From Surprise Medical Bills

After struggling for months to reach consensus, a bipartisan, bicameral group of lawmakers announced Sunday evening they had come to an agreement on legislation that would protect patients from surprise medical bills. The proposal potentially could be attached to a must-pass package to fund the government by December 20, but some significant obstacles remain.

While some critical details are still being ironed out, the Lower Health Care Costs Act of 2019 would reportedly ban surprise bills from doctors working at hospitals that are covered by a patient’s health insurance, and create an arbitration system for billing disputes between medical service providers and insurers. Bills under $750 would be settled at a standard rate based on the average paid for the service in that area. Bills for more than $750 could go to binding arbitration.

The proposal would also ban balance billing for air ambulances, with a threshold for arbitration set at $25,000.

The legislation contains additional provisions that could help it gain wider support, including nearly $20 billion in funding for roughly 1,400 Community Health Centers over five years, an increase in the purchasing age of tobacco to 21 and measures to lower drug prices.

Powerful combatants: While there’s widespread agreement that the issue needs attention from Congress, and the White House has pushed for a bill, powerful interest groups have pushed back against the months-long effort to rein in surprise bills. Insurers would prefer to use price benchmarks, but health-care providers say standardized prices would give insurers too much power, and conservative lawmakers have expressed concerns about rate-setting by the government. Some providers, on the other hand, want to see an arbitration system to resolve disputes. An earlier effort to reach a deal was scuttled this past summer, in part due to the lobbying efforts of a group of private equity investors who own provider staffing firms. (For more on that story, see this piece at The New York Times.)

Not everyone is on board: Although several key lawmakers — including Frank Pallone Jr. (D-NJ) and Rep. Greg Walden (R-OR) of the House Energy and Commerce Committee, and Sen. Lamar Alexander (R-TN) of the Senate Health Committee — say they back the deal, Sen. Patty Murray (D-WA), the top Democrat on the Senate Health Committee, has not indicated that she supports it. "Senator Murray believes the overall agreement takes important steps forward on a number of issues impacting patients and families, and is working with some members of her caucus on concerns they still have," a Murray spokesperson said.

And there’s already industry pushback: The Greater New York Hospital Association said Monday that the proposal “includes needless provisions that benefit for-profit insurers while severely harming hospitals and physicians.” The group also criticized the hurried nature of the effort, describing the “rush to get surprise billing language into an end-of-year funding bill” as “dangerous and unnecessary.”

The bottom line: The agreement renews hope that some kind of legislation will pass to address an urgent health care problem, but there are still details to iron out and time is running short.

Chart of the Day

Drew Altman of the Kaiser Family Foundation highlights the need to protect patients from surprise bills, pointing out that those who are having medical emergencies are at an especially high risk for being hit with unexpected out-of-pocket costs. “It’s hard to imagine many patients who are so prepared and insurance-savvy that they could protect themselves from an out-of-network bill in the middle of a heart attack,” Altman writes at Axios Monday.

The Fiscal Challenge for the Next Recession

The federal budget deficit for fiscal year 2019 was nearly $1 trillion. “In the next downturn, don’t be surprised if this number hits $2 trillion,” writes Nick Timiraos, The Wall Street Journal’s chief economics correspondent.

Timiraos notes that the Federal Reserve will have less room to cut its benchmark interest rate in response to the next downturn — and that the extraordinary tools it employed in response to the 2008 financial crisis probably won’t pack the same punch. “Long-term interest rates are already too low by historical standards for those other tools to be fully capable of delivering the punch that will be needed to counter the next recession, no matter how hard the Fed pushes on them,” David Wilcox, former head of the Fed’s research and statistics division, told Timiraos.

So while Fed officials are reviewing their options for most effectively fighting future downturns, many economists have concluded that fiscal policy will have to play a greater role in responding to a recession. But Fed officials have been reluctant to make fiscal prescriptions to politicians, Timiraos writes:

Fed officials are reticent out of fear that would muddy the traditional separation between fiscal policy—the product of often highly politicized debates in Congress and the White House—and monetary policy, which the Fed tries to shield from partisan politics.

But the Fed’s lack of tools makes it important, some economists and former central bankers say, for policy makers to discuss in the open now what the parameters for any potential coordination would look like. …

Addressing the issue now would help minimize these complications in an economic emergency, and it could restore investor confidence that policy might still have some recession-fighting power.

RIP, Paul Volcker

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