The cost of war: $75bn, and rising

George Bush asked the United States Congress for almost $75bn (£48bn) of emergency funding yesterday to pay for the war in Iraq, as the White House braced itself for a costly and probably more drawn-out conflict than it initially expected to topple Saddam Hussein's regime.

The figures offer the first insight into how the Bush administration believes the war will proceed. The expenditure – huge in absolute terms but less than 1 per cent of US gross domestic product – covers only the first six months of war and its aftermath, certain to include a military occupation of Iraq.

It is based on the assumption that the fighting will be over in 30 days, reflecting the "weeks not months" mantra of Donald Rumsfeld, the Defence Secretary. Of the total, $63bn will go for purely military costs, $8bn for international aid and relief, and $4bn for beefing up domestic security to cope with a heightened risk of terrorist strikes at American targets at home and abroad.

The military costs include $30bn for the deployment of 200,000 US troops to the Gulf, and $5bn per month for the cost of keeping them there.

A further $5bn will go on weapons replacement, and the remainder for unspecified purposes (including funding for covert CIA operations during the war).

Mr Bush announced his supplementary request after being briefed by Mr Rumsfeld and top uniformed commanders yesterday on the war. Speaking to military personnel at the Pentagon, he struck a calm and confident note. "We cannot know the duration of this war, yet we know its outcome: we will prevail.

"The Iraq regime will be disarmed. The Iraq regime will be ended. The Iraq people will be free and our world will be more secure and peaceful," he declared. Soon the Iraqi people, he concluded, "will see the great compassion of the US and the world".

At the same time, his officials dispute gloomier assessments of the war, which are starting to be voiced in the media and by some retired generals and military specialists. Progress thus far has been as good or better than expected, the White House maintains.

They take issue with critics who say that, relying overmuch on supposedly irresistible American technology, air power, and speed of movement on the ground, Mr Rumsfeld had committed too few armoured units to the campaign.

They also profess to be little concerned with the "sporadic" resistance encountered from Iraqi forces in southern cities where little opposition had been expected.

Until yesterday, the Bush administration had rejected pressure for an estimate of costs, saying it wanted to see how events developed in the first few days, and how hard the coalition invaders would have to fight. The $75bn figure is in the middle range of expectations.

Had the "decapitation" strike at dawn last Thursday succeeded in killing President Saddam and his top henchmen, and ended the war before it had properly begun, the cost would have been much less. American intelligence agents are now sure that President Saddam, who has appeared twice on television since, survived, though officials say that he might be injured and receiving medical treatment.

Nor does $75bn represent a worst-case scenario, in which the war would drag on, drawing in other countries, and in which the Iraqi oilfields were sabotaged and reconstruction costs soared.

But this middle-range estimate may yet prove too low. A second budget supplement will probably be needed later in the year, even though the aim is to bring about a big reduction in the number of US troops in and around Iraq by the autumn.

The request means more bad news for the US economy. Mr Bush told Congress yesterday that he wanted the extra spending authorised by Easter, and warned it not to try to tack on extra non-war-related expenditure. But White House officials say it will push the fiscal 2003 budget deficit to near $400bn, a record and double the estimates in January.

The $8bn for relief and rebuilding includes $3.5bn for Iraq, and $5bn for US allies against Iraq or in the war against terrorism. These include Israel, Egypt, Jordan, Pakistan and Afghanistan. Even Turkey, which earlier this month rejected Washington's offer of $24bn in aid and loans in return for letting Mr Bush launch a second front against Baghdad, will get $1bn of help.

The bill could rise further if Senate Democrats have their way, and secure more money for homeland security and for debt-ridden American states. And there could yet be emergency funding for ailing airlines – even though industry pleas for aid have so far been rejected.

On paper, this war – assuming it ends relatively quickly as the administration expects – will be cheaper than the 1991 Gulf War, which cost $81bn in today's dollars. But all except $9bn of that was covered by contributions from allies. This time, America and Britain will have to pick up almost the entire bill on their own.