Full Breakdown
$38 Billion and Counting: CBO’s Assessment of the U.S. War with Iran
By Drooid · · How we work
Core Cost Assessment
The Congressional Budget Office (CBO) estimates that the U.S. war with Iran has cost the Department of Defense roughly $38 billion through August 1, 2026. The agency projects $2 billion to $3 billion per additional month if fighting continues at its current level, with higher outlays if violence escalates. Most of the expense stems from replacing expended munitions—about $21.7 billion—and from increased flying hours ($10.4 billion), fuel ($2.7 billion), and equipment losses ($1.9 billion).
Background & Context
The conflict began after coordinated U.S.–Israeli strikes on Iranian targets. Over the ensuing months the United States has defended Israel from Iranian ballistic missiles and drones while striking Iranian positions. The war entered its seventh month as the nation heads toward the November 2026 midterm elections, making its fiscal impact a central political issue.
Data & Statistics
- Munitions: $13.1 billion for missile-defense interceptors, $7.3 billion for land-attack cruise missiles, $1.2 billion for other munitions.
- Interceptor depletion: CBO estimates the United States has used between one-half and two-thirds of its interceptor inventory since June 2025.
- Unit costs: Patriot/SM-6 ? $4 million each; THAAD ? $12 million; SM-3 ? $28 million.
- Inflation impact: CBO projects the war will raise personal-consumption-expenditures (PCE) inflation by 0.5 percentage points in the first quarter of 2027, with core PCE up 0.3 points.
Why It Matters
The financial strain feeds directly into consumer prices, as higher oil and natural-gas shipments through the Strait of Hormuz and the Red Sea push fuel costs upward. The depleted interceptor stockpile could limit U.S. response options in a potential conflict with China, which fields large numbers of ballistic and cruise missiles. Politically, the cost-growth narrative is shaping voter perceptions of the administration’s handling of the war.
Official Statements & Responses
- Admiral Brad Cooper, commander of U.S. forces, said, “We have virtually unlimited amounts of mid- to high-grade ammunition, far more than we can ever use.”
- White House spokeswoman Anna Kelly described the strikes as “decisive action” to protect U.S. personnel.
- Defense Secretary Pete Hegseth has asked Congress for nearly $90 billion in emergency supplemental funding to restock munitions and cover operational costs.
- Rep. Brendan Boyle (D-PA), ranking member of the House Budget Committee, requested the CBO analysis to illuminate the war’s fiscal burden.
Criticism & Opposition
- Sen. Elizabeth Warren (D-MA) warned that the war is “burning a hole in Americans’ pockets and our munitions supply.”
Conflicting Reports & Gaps
- CBO: $38 billion total (through Aug 1) and $2-$3 billion monthly.
- Pentagon Inspector General: $33.4 billion through June 30, with $22.3 billion attributed to munitions.
- Defense Secretary Pete Hegseth (July hearing): $37.5 billion for the first five months.
All three estimates exclude repair costs for damaged bases, veterans’ health care, and future interest-service financing. The Pentagon did not provide data to the CBO, forcing analysts to rely on public reports, which the agency notes introduces “considerable uncertainty.”
What’s Next
The CBO warns that each additional month of low-intensity fighting will add about $2 billion, rising to $3 billion if escalation repeats. Congress faces a pending supplemental funding request of $87.6 billion (including $67.1 billion for the Department of Defense). The House passed a budget blueprint to allocate up to $73 billion for the war; the Senate has not acted, leaving the funding picture unresolved as the midterms approach.