01/11/2008 04:27 pm ET Updated May 25, 2011

The War Service Industry's Future Financial Health: "Easily" Ten More Years in Iraq

In response to Senator John McCain's flip comments of spending thousands of years in Iraq, President Bush gave the war service industry a big boost to their financial bottom line. He said that the US could "easily" spend ten more years in Iraq.

This is music to the war service industry's ears. And to add icing to the cake, DOD Secretary Gates is considering sending 3000 more troops into Afghanistan to blunt any spring offensive by the Taliban. Since the US Army has contracted out more vital logistics than any other war in history, the war service industry will continue to rake in the government's money as long as we stay in Iraq and Afghanistan.

There have been jabs at reform but most are on hold. The Democratic Senate Freshman have succeeded in passing some impressive reforms and a commission to look at the war service industry but these measures were in the 2008 defense authorization bill that Bush has vetoed (because of another provision) and it is unknown if these reforms will survive the next round. In fact, Blackwater and other war service industry companies have ramped up their lobbying effort in DC and this does not bode well for reform.

The Army attempted, under pressure from the Congress and the media, to change the mother of all logistics contracts, the LOGCAP III contract with KBR, which is billing at least a half a billion a month to the government. The Army broke the contract out to three contractors, KBR being one, and had a contractor to oversee the other contractors. Although this LOGCAP IV contract was only marginally better for the US government, contractors who lost won an appeal to put the contract on hold. So the extremely expensive and wasteful LOGCAP III contract continues to be in effect with KBR billing at a breathtaking rate. In fact, the Center for Public Integrity recently released a report that found that "U.S. government contracts for work in Iraq and Afghanistan have grown more than 50 percent annually, from $11 billion in 2004 to almost $17 billion in 2005 and more than $25 billion in 2006."

This growth occurred before and after the recent troop surge so the number of troops in Iraq and Afghanistan doesn't seem to matter. Time is on the contractors' side, the longer we are there, the more they can bill, regardless whether the work has actually increased.

With the likes of Senator Ted Stevens admitting that the wars in Iraq and Afghanistan (apparently the new contractor growth area) are costing $15 billion a month, we may have found that the war service industry may be the best recession proof industry now in America. The longer they go unchecked and are allowed to infiltrate the Congress with lobbyists and lure experienced men out of our military, the harder they will be for the Congress to control. The cynics will invest in these companies to make money. Let's just hope that the reformers will get their reforms through and not fade in the face of the war service industry's increasingly powerful Washington presence. Every month in Iraq is putting a brutal crunch on our nation's money resources and the war service industry grows more powerful.