The news was first reported by the Los Angeles Times, which cited unnamed Pentagon officials.
The Bush administration has earlier this year said it would need $147.5 billion for fiscal 2008, but the estimates have been raised by another $47 billion. This request is in addition to the Pentagon's nearly half-trillion annual budget, which omits war spending but covers routine costs, including training, payrolls and weapons procurement.
To blame: the massive troop buildup and production of new equipment, including mine-resistant trucks.
The $195 billion price tag would mark an increase of about 12 percent from $173 billion in Fiscal 2007.
Winslow Wheeler, a senior fellow at the Center for Defense Information and a former Republican congressional budget aide, told the Los Angeles Times that the Iraq war (including associated costs such as embassy expenses in Baghdad and CIA operations) and currently costs taxpayers $12 billion a month, and the costs will rise, even as incremental drawdowns in troop levels take place over the coming year.
"Everybody predicts declines, but they haven't occurred," Wheeler told the Times. "It all depends on what happens in Iraq, but thus far it has continued to get bloodier and more expensive."
Secretary of Defense Robert M. Gates and other officials are expected to present their request to the Senate on Wednesday.
In 2004, the conflicts in Iraq and Afghanistan together cost $94 billion. Those costs rose to $108 billion in 2005, and $122 billion in 2006.
The Congressional Budget Office this week released estimates on the long-term costs of deploying troops in Iraq, and said that, if the U.S. were to maintain a long-term presence (as President Bush suggested in his address to the nation last week), even a minimal force of 55,000 troops in a peacekeeping role would cost $25 billion a year.
The report says keeping the troops protected at established military bases and out of combat would lower the cost to about $10 billion dollars a year, with additional costs of $8 billion for the construction of bases or additional equipment.
Senate Budget Committee Chairman Kent Conrad, D-N.D., asked for the study after President Bush likened America's future in Iraq to the peacekeeping role U.S. troops play in South Korea, where they have been stationed for some five decades. Mr. Bush announced his intention to keep a force of between 100,000 to 130,000 troops on the ground in Iraq through the end of his term, and was quoted in a new book, "Dead Certain," as saying he hoped his eventual successor would be "comfortable about sustaining a presence" in the war-torn country.
A four-decade-long presence in Iraq, mimicking our presence in South Korea, would top $1 trillion dollars, based on the CBO's estimates.