Islamic State fight seen costing U.S. $2.4 billion or more annually

By David Alexander

WASHINGTON (Reuters) - U.S. military efforts against Islamic State have cost nearly $1 billion so far and are likely to run between $2.4 billion and $3.8 billion per year if air and ground operations continue at the current pace, according to a think tank analysis.

But a ramp-up, including more air strikes and a significant boost in ground forces, could send costs soaring to between $13 billion and $22 billion annually, said the analysis released on Monday by the nonpartisan Center for Strategic and Budgetary Assessments.

"Future costs depend, to a great extent, on how long operations continue, the steady-state level of air operations, and whether additional ground forces are deployed beyond what is already planned," said the report by Todd Harrison and other analysts.

Defense Secretary Chuck Hagel told reporters last week that the Pentagon has spent roughly $7 million to $10 million per day on operations against Islamic State since June 16, when it first deployed troops to assess the Iraqi military and advise its leaders.

The United States began air strikes against Islamic State militants in Iraq on Aug. 8 and expanded them to Syria on Sept. 22. Coalition forces have carried out 290 air strikes in Iraq and Syria, of which the U.S. military has conducted 265.

U.S. planes are flying about 60 reconnaissance sorties per day, and some 1,600 U.S. troops are being deployed in Iraq.

The think tank's analysis estimated the cost of U.S. operations against Islamic State through Sept. 24 at between $780 million and $930 million. That agreed roughly with Hagel's estimate of the cost per day.

If air operations continue at a moderate level and deployed ground forces remain in the range of 2,000, then the cost of the U.S. military effort against the militant Islamist group would likely run between $200 million and $320 million per month, the report said.

But increased air operations, coupled with the deployment of up to 5,000 ground troops, would cost between $350 million and $570 million per month. High-intensity air operations with a deployment of 25,000 troops could cost $1.1 billion to $1.8 billion per month, the report said.

Defense officials have indicated they will have to seek more funding because of the fight against Islamic State.

Army General Martin Dempsey, chairman of the Joint Chiefs of Staff, said last week that the Pentagon's 2015 budget proposal assumed stable or declining commitments abroad and some flexibility to adjust military pay and healthcare and to retire weapons systems.

"Commitments have gone up," Dempsey told reporters, noting that Congress has rejected some proposals to retire weapons and adjust military compensation.

"So if you're asking me do I assess right now ... that we're going to have budget problems? Yes."

The center said its cost estimates were based on publicly available information about the types of aircraft and munitions being used, as well as expenditures in previous operations.

(Reporting by David Alexander; Editing by David Storey and Jonathan Oatis)