The United States has maintained substantial military forces in Iraq and Afghanistan since hostilities began in Iraq in March 2003. As a consequence, many of the hundreds of thousands of pieces of equipment used in operations in Iraq and Afghanistan are in need of replacement or repair. The Congressional Budget Office (CBO) attempted to determine the number and types of equipment being used by the military services at higher-than-normal levels in Iraq and Afghanistan and to estimate the potential resource implications of the resulting need to repair or replace significant portions of that equipment. CBO used two methods to estimate the additional cost that would accrue from the increased usage of the services equipment compared with the normal peacetime cost. Those two methods, one a top-down and the other a bottom-up approach, yielded roughly comparable estimates of the annual costs to replace or repair worn equipment. CBO estimates that the cost from wear and tear on equipment resulting from operations in 2005 could be on the order of $8 billion. Some of the problems with worn-out equipment that the services are now just beginning to address are the result of operations in previous years. Thus, in addition to bills for activity in 2005, costs have accrued for repairs and replacements stemming from operations in the second half of 2003 and all of 2004. The services have received funds to cover some of the costs resulting from activity in 2003, 2004, and 2005, but not enough to cover all of the costs. CBO calculates, on the basis of its estimates and funding provided to the services that it can identify in supplemental appropriations enacted in 2003 and 2004, that the services will have a collective backlog of expenses in 2005 of $13 billion to $18 billion resulting from equipment stress and loss. More than half of those costs are attributable to wear on Army equipment, with the Marine Corps and the Air Force accounting for most of the remaining costs.

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