CBO Report Puts Price Tag on Iran War at $38 Billion

The Congressional Budget Office (CBO) released a report on September 15 estimating that the US war against Iran has cost the Department of Defense approximately $38 billion as of August 1, 2026. The nonpartisan agency projected that the cost could rise by $2 to $3 billion per month, depending on the intensity of the conflict, with the potential for even higher expenses if violence escalates further.

The assessment, prepared at the request of Representative Brendan Boyle of Pennsylvania, the top Democrat on the House Budget Committee, covers the first six months of the war, which began after US-Israeli strikes targeting Iran in late February. The CBO noted that its figures reflect the cost of replacing expended munitions and equipment lost in battle, increased flying hours, and higher fuel costs.

According to the report, replacing munitions used through August 1 cost an estimated $21.7 billion, making it the largest single component of the Defense Department's expenses. The CBO also warned that the conflict has depleted the US inventory of missile defense interceptors, suggesting that the United States has likely used between one-half and two-thirds of its stock of those munitions since June 2025. The budget office estimated it could take up to five years to replenish US stockpiles.

The report highlighted that the estimates do not include costs related to US military personnel killed or injured in the conflict or longer-term veterans' healthcare and disability compensation.

Inflation and Economic Pressures

The CBO projected that the war is expected to increase US inflation by 0.5 percentage points in the first three months of 2027, compared with earlier estimates. The main driver is the reduction of oil and natural gas shipments through the Strait of Hormuz, a critical waterway for global energy transit, as well as disruptions to shipping through the Red Sea. Iran has retaliated by blocking the Strait of Hormuz, sending energy costs soaring.

The report also noted that core inflation, excluding volatile food and energy prices, could be 0.3 percentage points higher than previously projected, and that higher inflation would likely boost interest rates on Treasury securities.

Political Reactions

Representative Boyle said in a statement: "Donald Trump's disastrous war in Iran has already taken the lives of brave American servicemembers and left others wounded. Beyond that human toll, this nonpartisan CBO report makes clear that the war has also cost American taxpayers tens of billions of dollars and counting, while continuing to drive up costs."

He added: "Donald Trump and Republicans have spent years telling Americans that we cannot afford to help families here at home, but apparently they can find tens of billions of dollars, and potentially much more, for a reckless war that is leaving Americans to pay the price."

The findings come as voters focus on the war and high prices ahead of the midterm elections, which will determine control of Congress, where Republicans currently hold majorities in both chambers.

Administration and Pentagon Responses

White House spokeswoman Anna Kelly described President Donald Trump's attacks on Iran as "decisive action" to prevent Tehran from harming US personnel or interests. She said in a statement that the US military has "more than enough munitions, ammo, and stockpiles to serve all of the Commander-in-Chief's strategic goals and beyond."

Chief Pentagon spokesperson Sean Parnell disputed the report's findings on munitions shortages and said: "We have everything required to strike at the time and place of the president's choosing."

The CBO's estimate closely aligns with the $37.5 billion figure that Defense Secretary Pete Hegseth provided during a Senate hearing in July. At that hearing, Hegseth urged Congress to approve a dramatic increase in the US military budget, already the largest in the world, and pleaded for nearly $90 billion in emergency funding to restock munitions supplies. He warned that without those funds, the US would face "critical shortfalls."

The CBO reported that the Department of Defense did not cooperate with congressional financial auditors, and that its estimates were based on government databases and public reports. The agency noted that its projections are "subject to considerable uncertainty."

The report did not include costs of recent strikes on commercial vessels in the Strait of Hormuz or attacks on US military installations in the region, nor did it account for borrowing costs associated with the war.

As the conflict enters its seventh month with no sign of a quick end, the administration continues to search for ways to end the fighting and reopen the vital waterway. President Trump said in a social media post that oil prices would "drop like a rock" once the military conflict with Iran is over, adding that this "will not be long."