The Administration's Proposal for Financing Operations Desert Shield and Desert Storm

GAO discussed the Administration's proposal for financing Operations Desert Shield and Desert Storm and the Administration's estimate of the operations' costs. GAO noted that: (1) Operation Desert Storm's cost must be financed to ensure that U.S. troops in the Persian Gulf receive all the support they need; (2) Congress should provide needed money only through periodic supplemental funding due to uncertainties and concerns regarding administration cost estimates; (3) the Administration's working capital proposal would give the Department of Defense (DOD) direct access to the funds without further congressional oversight; (4) funds for the war should come first from allied pledges and then from American taxpayers to supplement allied pledges; (5) 31 countries sent military forces to the Gulf region to support the allied effort; (6) Saudi Arabia, Kuwait, United Arab Emirates, Japan, Germany, and Korea pledged a total of $53.5 billion and contributed about $12.2 billion in direct cash and $2.7 billion in in-kind support; and (7) the European Commission and 24 countries pledged a total of about $14.7 billion and contributed about $6.7 billion to Turkey, Jordan, Egypt, and other countries affected by the economic embargo against Iraq. GAO also noted that the Administration's cost estimate: (1) included higher fuel costs than DOD paid for operations outside the Middle East; (2) overstated costs, since it did not take into account rebates and credits that DOD accrued that would reduce actual outlays; and (3) failed to fully reflect the savings from free fuel and other in-kind contributions.