Q: How much do the state and federal governments spend on the War on Drugs?

A: Nobody really knows.  The “National Narcotics Leadership Act of 1988” (in Title I of the “Anti-Drug Abuse Act of 1988, P.C. 100-690), set up the Office of National Drug Control Policy (ONDCP) in the White House.  One of the major duties of the director of the ONDCP is to annually develop “a consolidated National Drug Control Program budget proposal,” and obtain from each federal agency “with responsibilities under the National Drug Control Strategy” that agency’s “drug control budget request” (sec. 1003(c), P.C. 100-690).

In the early 1990s when drug abuse was considered by a large fraction of the public as the most important national problem, federal agencies were motivated to characterize as much of their program as being anti-drug as they could plausibly claim.
           
Congress generally wanted more spending for anti-drug programs.  Bureaucratic characterization of activities as anti-drug was sometimes exaggerated and totals were inaccurate.  In 2003, the ONDCP developed a new budget process, which reports only agency budgets that have easily specified drug control tasks that are discretionary and that directly related to preventing drug use.  Ostensibly, the number of drug offenders sent to federal prison and the length of their sentences is decided by federal judges, not by the executive branch. This means, for example, that federal prison expenditures are not fully reported in the ONDCP budget (of course, DOJ decides how many and which drug cases to bring and could estimate the imprisonment costs of those decisions). 

John Carnevale, former ONDCP senior staffer, estimates that total federal incarceration costs of drug offenders is around $4.5 billion annually.   Yet, the 2004 anti-drug budget lists only $47 million as the anti-drug spending by the Bureau of Prisons.  This $47 million is the amount spent on drug treatment for prisoners, not incarceration.  However, by another calculation that omits capital costs, the Federal Bureau of Prisons estimated that the annual cost in 2001 to house a prisoner was $22,632.   According to this estimate, therefore, the federal government spent approximately $3.7 billion to house drug offenders in 2003.

Another example of unreported anti-drug costs is that of the IRS.  While the IRS does not perform drug-specific activities, much of their money laundering investigation is directed at high level drug dealers.  Yet none of the IRS anti-drug money laundering budget is not reported by the ONDCP as a drug-control cost.   Thus, ONDCP estimates are substantially lower than the total costs to the entire federal government.
 
In 2003, before the budget reporting changes took effect, the ONDCP reported that the federal government spent $19.2 billion on drug control. This included the cost of enforcement (e.g. the Drug Enforcement Administration), legal and judicial costs (e.g. the Department of Justice), cost of federal prisoner treatment programs and incarceration (the Bureau of Prisons) and the cost of medical services (the Department of Health and Human Services), among others.

Calculating total state costs is somewhat more difficult, but the most recent comprehensive calculation is for 1998, prepared by the National Center on Alcohol and Substance Abuse at Columbia University.  They estimated that states spent a total of $81.3 billion in 1998 to fund drug prevention, treatment, incarceration and prohibition enforcement.

In 2003, there were more than 2.2 million people incarcerated in prisons or jails in the United States, 162,000 of whom were held in federal prison, and 102,000 were juveniles.   55 percent of federal inmates were incarcerated for drug offenses, while 21 percent of state inmates were there for drug offenses.   Using the Federal Bureau of Prison’s estimate that it annually costs states an average of $22,650 to house one inmate, in 2003, states spent almost $28 billion to house drug offenders.

Treatment, on the other hand, is much cheaper, and much more cost effective.  The Office of National Drug Control Policy reports that the average cost per treatment episode is $2,941 per person, which returns $9,177 in societal benefits such as crime reduction, increased earnings and reduced health care costs. Yet, in 1998, states spent only $2.5 billion on prevention and treatment of substance abuse, one tenth of what states spent that year incarcerating drug offenders.   The ONDCP estimates that 70-85 percent of inmates require some amount of substance abuse treatment, yet in 1997 (the most recent nationwide figures available), only 28 percent of state and federal inmates were in any program, and only 12 percent were in professional treatment programs.

CASA analyzed state spending in 1998 on drug use and control, totaling $81.3 billion as follows: States spent 38 percent ($31 billion) on the justice system (including incarceration, prosecution, juvenile courts, etc.); 3.7 percent ($3 billion) on treatment, prevention and research; 20 percent ($16.5 billion) on drug education; 19 percent ($15.2 billion) on health costs; 10 percent ($8 billion) in child and family assistance and 7 percent ($6 billion) in mental health and developmental disabilities.

For FY 2003, ONDCP reported the federal government spent 12 percent ($2.3 billion) on interdiction efforts; 50 percent ($9.5 billion) on domestic law enforcement; and 33 percent ($6.3 billion) on the treatment, prevention and research.   The federal government allocated 5 percent of the budget ($998 million) to the Department of Defense.

Using ONDCP’s figures, federal expenditure on the war on drugs from 1995 to 2005 totaled $169.5 billion. In the last decade, federal and state anti-drug cumulative spending exceeded one-half trillion dollars.

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