Congress' phony price tags: legislators have a lousy track record of keeping costs anywhere near their initial projections.

• Author: de Rugy, Veronique
• Position: Columns - Column

CONGRESS SAYS THAT the health care package it passed at the end of 2009 will cost roughly $900 billion over 10 years--and will somehow end up saving taxpayers money in the long run. If you think that sounds unlikely, you're right.

With the federal government, massive cost overruns are the rule, not the exception. The $700 billion cost of the war in Iraq dwarfs the $50 billion to $60 billion that Mitch Daniels, then director of the Office of Management and Budget, predicted at the outset. In 1967 long-run forecasts estimated that Medicare would cost about $12 billion by 1990. In reality, it cost more than $98 billion that year. Today it costs $500 billion.

Nor is the problem limited to Washington. In 2002 the Journal of the American Planning Association published one of the most comprehensive studies of cost overruns, looking over the last 70 years at 258 government projects around the world with a combined value of $90 billion. The Danish economists Bent Flyvbjerg, Mette Skamris Holm, and Soren Buhl found that nine out of IO public works projects had exceeded their initially estimated costs. The Sydney Opera House and the Concorde supersonic airplane were the most spectacular examples, with cost overruns of 1,400 percent and 1,100 percent, respectively. Budget busting occurred throughout the seven decades studied, with the totals spent routinely ranging from 50 to 100 percent more than the original estimate.

How did the United States do? According to the Danish researchers, American cost overruns reached an average of $55 billion per year. The table shows a small sample of these boon-doggies. The Big Dig, the unofficial name of the Central Artery/Tunnel Project in Boston, Massachusetts, is the most expensive highway project in the history of the country. By the time the project was completed in 2008, its price tag was a staggering $22 billion. The estimated cost in 1985 was $2.6 billion. The Dig also took seven more years to complete than originally anticipated, and it ran into severe construction quality problems along the way.

The military, too, has a long history of cost overruns. According to Chris Edwards of the Cato Institute, the Pentagon building itself "cost $75 million to build, more than double the originally planned $35 million." Weapon system overruns are routine. Consider the V-22 Osprey, a tilt-rotor, vertical takeoff and landing aircraft that has been plagued with at least $7.5 billion in cost overruns, mechanical problems...