Iran War Costs US Military $38 Billion as CBO Warns of Billions More in Monthly Spending | Today’s news
The US war against Iran has cost the Defense Department more than $38 billion as of Aug. 1, with the conflict potentially adding another $2 billion to $3 billion or more each month, depending on the intensity of the fighting, the nonpartisan Congressional Budget Office said on Tuesday (Sept. 15).
“As of Aug. 1, 2026, the armed conflict with Iran has cost (the Department of Defense) approximately $38 billion,” CBO said in the assessment, referring to the war that began after the Feb. 28 U.S.-Israeli attacks on Iran.
The agency warned that monthly costs could rise further if the conflict escalated.
“These expenditures could be even higher if violence continues to escalate,” CBO said.
What is causing the cost of the war in Iran?
CBO said the estimate largely reflects the cost of replacing munitions spent during the conflict and equipment lost in battle, along with higher fuel costs for the U.S. military and other expenses.
The estimate does not include costs related to U.S. military personnel killed or injured in the conflict, or long-term health care and compensation for veterans.
The analysis was prepared at the request of Rep. Brendan Boyle, the top Democrat on the House Appropriations Committee, along with other Democratic lawmakers.
The estimate is broadly consistent with an earlier assessment by Defense Secretary Pete Hegseth, who told the Senate in July that the Iran war had cost the Pentagon about $37.5 billion.
Iran war fuels inflation fears
The CBO said the broader economic impact of the conflict is being felt by higher inflation, primarily due to disruptions in oil and natural gas supplies.
Iran’s retaliation included blocking the Strait of Hormuz, a key waterway for global energy transit. The outage, along with shipping problems in the Red Sea, reduced energy flows and increased costs.
CBO estimates that inflation in the first quarter of 2027 will be about 0.5 percentage point higher than it projected in February, based on the price index for personal consumption expenditures.
Core inflation, which excludes volatile food and energy prices, is expected to be 0.3 percentage points higher than previously forecast.
Higher inflation, in turn, could push up interest rates on U.S. Treasury securities, increasing the government’s borrowing costs.
The White House’s $87.6 billion funding request
The findings come as the Iran conflict enters its seventh month, with the war and rising prices emerging as major issues ahead of the US midterm elections.
In June, the White House requested $87.6 billion in additional funding, mostly to support the war effort. Congress has not yet approved the request.
CBO noted that its estimates are subject to significant uncertainty because the Department of Defense declined to provide information requested for the assessment. The Budget Office instead relied on government databases and publicly available reports.
The Pentagon is facing a shortage of strategic supplies
The cost of replacing weapons and equipment also raises concerns about US military stockpiles.
A Pentagon inspector general’s report released Monday said the war had led to “strategic stockpile shortages.”
“This impartial CBO report makes clear that the war has also cost American taxpayers tens of billions of dollars and is still adding to the cost,” Boyle said.
He also criticized President Donald Trump and Republicans in Congress over spending, saying the administration is willing to spend tens of billions of dollars on the conflict while warning about the cost of domestic programs.
Read also | Republican lawmaker files articles of impeachment against Hegseth over Iran war
