Commentary

The Costs of NATO Expansion: What Are the Administration and NATO Hiding?

By Ivan Eland
February 3, 1998

Recent events in the debate over expanding the NATO alliance have erased any remaining credibility in the Clinton administration’s case for expansion. That is especially true on the critical issue of the expansion’s cost.

From the beginning, the administration has been reluctant to talk about the cost of expansion, for fear that its magnitude would torpedo the whole initiative. It took studies by the Congressional Budget Office and RAND as well as congressional prodding to force the administration to make its own (deeply flawed) effort at estimating costs. That estimate should have been based on a detailed list of the actual military requirements for the defense of Poland, Hungary and the Czech Republic; instead, it was largely based on choosing an amount Congress would find acceptable. Not surprisingly, the administration published scant details about the assumptions underlying its estimate, and Congress was justifiably skeptical about the administration’s lowball estimate of $27 to $35 billion.

Then France and Germany declared that they would not pay any of the additional costs of expansion. Secretary of State Madeleine Albright and Secretary of Defense William Cohen quickly realized that the allies’ refusal to accept an expansion with any significant costs would pose a greater threat to NATO expansion than congressional skepticism. To safeguard the administration’s most important foreign policy initiative, they scrambled to assert that the administration had overestimated the costs. They claimed — contrary to the conclusions of leaked NATO documents and experts inside and outside the U.S. government — that the three new member nations’ militaries and their supporting infrastructure were in better shape than expected, thus reducing the improvements needed and the associated costs.


Before it votes on this major extension of U.S. security guarantees to new nations, Congress should know that an accurate estimate of the cost has been made using defensible assumptions and methodology.


They also asserted that the forces of existing allies were better suited to defend new members than earlier thought. At the same time, NATO commanders suddenly claimed that the security threat to new members had declined during the brief period (less than one year) since the administration’s cost estimate was completed.

These miraculous revelations conveniently appeared just as embarrassed U.S. officials began to abandon their original estimate for even lower cost projections. To justify lower costs, they endorsed NATO figures predicting excessively low expansion-induced increases in alliance budgets — a mere $1.5 billion over 10 years — although they had rejected those figures earlier precisely because they were too low.

NATO’s bureaucracy states that the details behind that estimate are classified and will remain so indefinitely. This convenient suppression of information prevents outside experts from evaluating the estimate. What are the administration and NATO hiding?

In any cost estimate, the devil is in the detailed assumptions and methodology used. Only the Congressional Budget Office’s (CBO’s) cost estimate contained detailed assumptions and methodology. Even when that estimate is adjusted so as to be comparable with the administration’s — that is, using questionable assumptions of the Department of Defense — the projected costs are at least twice as high ($70 billion) as the administration’s first estimate. Using alternative assumptions, the CBO estimated that costs could rise to as much as $125 billion.

The administration’s grossly inaccurate estimate of the costs for the operation in Bosnia should alert Congress and the public that the real costs of NATO expansion are likely to be much higher than the administration’s estimates. The administration initially estimated that the Bosnian operation would cost the United States about $2 billion. That total is now $8 billion and the meter is still running.

At the very least, the debate over costs should not be conducted in secrecy. Parliamentarians in other NATO countries have protested the security classification of NATO’s cost estimate. The U.S. Congress — the most powerful legislative body in the world, with constitutional prerogatives of advice and consent on treaties and the power of the purse — should do the same.

Before it votes on this major extension of U.S. security guarantees to new nations, Congress should know that an accurate estimate of the cost has been made using defensible assumptions and methodology. Given the administration’s history of inaccurate cost projections in other areas, the convenient suppression of details in the administration’s and NATO’s low cost estimates are serious warning signs indeed.

Ivan Eland is the director of defense policy studies at the Cato Institute and author of the Congressional Budget Office report The Costs of Expanding the NATO Alliance.