September 15, 2002: White House Economic Adviser Says Iraq Invasion Will Cost up to $200 Billion; OMB Head Says Cost Much Lower

In an interview with the Wall Street Journal, Lawrence Lindsey, head of the White House’s National Economic Council, says he believes the Bush administration’s planned invasion of Iraq could cost between $100 and $200 billion. The cost, he says, will have only a modest impact on the US economy, since it will only amount to between one and two percent of the gross domestic product (GDP). “One year [of additional spending]? That’s nothing.” Mitch Daniels, director of the Office of Management and Budget, subsequently disputes the figure, saying it is “very, very high.” He suggests the total costs would run between $50 and $60 billion. [Wall Street Journal, 9/16/2002; Reuters, 9/18/2002; Washington Times, 5/13/2005] The White House press office also denies Lindsey’s prediction. As the current deputy press secretary Scott McClellan will later recall: “Lindsey’s biggest mistake wasn’t the size of the figures he chose to cite. It was citing any figures at all. Talking about the projected cost of a potential war wasn’t part of the script, especially not when the White House was in the crucial early stages of building broad public support. In fact, none of the possible, unpleasant consequences of war—casualties, economic effects, geopolitical risks, diplomatic repercussions—were part of the message. We were in campaign mode now, just as we had been when [President] Bush traveled the country leading the effort to pass tax cuts and education reforms. This first stage was all about convincing the public that the threat was serious and needed addressing without delay. Citing or discussing potential costs, financial or human, only played into the arguments our critics and opponents of war were raising. Lindsey had violated the first rule of the disciplined, on-message Bush White House: don’t make news unless you’re authorized to do so. Lindsey’s transgression could only make the war harder to sell.” As McClellan recalls, Bush is “steamed” at Lindsey’s comments. Lindsey will resign four months later. McClellan will write: “Larry, a highly regarded economist, had violated a basic principle of the Bush White House: the president doesn’t like anyone getting out in front of him. It’s his job to make the news, not anyone else’s—unless authorized as part of the script.” [McClellan, 2008, pp. 121-124]