Archive · 16 Sep 2026
Iran War Costs Exceed $38 Billion, CBO Reports
The United States has spent more than $38 billion on its war with Iran, according to a government budget office.
Much of the money is being used to replace weapons and equipment used or damaged during the fighting.
The war could cost another $2 billion to $3 billion for every additional month.
A later Pentagon estimate put the total above $42 billion.
The fighting has also disrupted oil and shipping routes, which can make fuel and other goods more expensive.
The CBO expects inflation to remain higher than previously predicted into early 2027.
Some weapons, especially missile-defense interceptors, may take five years or more to replace.
The CBO said its estimate is uncertain because the Pentagon did not provide all the information requested.
Government officials disagree about whether the military has enough weapons and supplies for future conflicts.
The Congressional Budget Office estimated that the Iran war cost the Department of Defense more than $38 billion through August 1.
The CBO projected additional monthly costs of $2 billion to $3 billion, depending on the conflict’s intensity.
A later Pentagon estimate provided to Congress put the war’s cost above $42 billion as of August 13.
The conflict is expected to raise headline inflation by about 0.5 percentage points in the first quarter of 2027, while core inflation could rise by 0.3 points.
The estimate excludes some agency costs, borrowing expenses, military personnel costs, and long-term veterans’ health care and disability payments.
- Who
- The United States, the Department of Defense, the Congressional Budget Office, the Pentagon, Congress, and officials including Pete Hegseth, Brendan Boyle, Anna Kelly, and Sean Parnell.
- What
- The CBO estimated that the Iran war cost more than $38 billion through August 1 and could add $2 billion to $3 billion per month, while a later Pentagon estimate exceeded $42 billion.
- When
- The CBO estimate covers costs through August 1; the Pentagon’s later estimate was provided to congressional committees on August 13.
- Where
- The conflict’s economic effects include disrupted energy shipments through the Strait of Hormuz and shipping disruptions in the Red Sea.
- Why
- The costs mainly reflect replacing munitions and equipment, additional flight activity, and higher fuel expenses; energy and shipping disruptions are also increasing inflationary pressure.
Critics and CBO Findings
Administration and Pentagon Position
Fiscal impact
Critics and CBO Findings
Brendan Boyle said the war is costing taxpayers tens of billions of dollars while contributing to higher costs for Americans.
Administration and Pentagon Position
The White House requested more than $87 billion in additional funding, including money for military operations and replacing munitions.
Weapons availability
Critics and CBO Findings
The CBO and a Pentagon inspector general report pointed to depleted inventories, strategic shortfalls, and potentially lengthy replenishment times.
Administration and Pentagon Position
Anna Kelly said the military has more than enough munitions and stockpiles for the administration’s strategic goals, while Sean Parnell disputed findings of shortages.
Reliability of the estimate
Critics and CBO Findings
The CBO said its estimate was subject to considerable uncertainty because the Department of Defense did not provide all requested information and because some costs were excluded.
Administration and Pentagon Position
The Pentagon’s later estimate exceeded $42 billion, suggesting that the total was higher than the CBO’s August 1 calculation.
- CBO cost estimate
- More than $38 billion through August 1
- Projected monthly cost
- $2 billion to $3 billion, depending on conflict intensity
- Later Pentagon estimate
- More than $42 billion, provided to Congress on August 13
- Headline inflation effect
- About 0.5 percentage points higher in the first quarter of 2027 than in the CBO’s February forecast
- Core inflation effect
- About 0.3 percentage points higher than the earlier forecast
- Weapons replenishment
- Some depleted inventories could take five years or more to rebuild
- White House funding request
- More than $87 billion in additional funding, including about $67 billion for the Defense Department
- Excluded costs
- Some other-agency expenses, borrowing costs, military personnel costs, and longer-term veterans’ health care and disability payments
