Iran war costs $38bn, strains US munitions and inflation, CBO finds

A nonpartisan Congressional Budget Office report released this week has quantified what six months of war with Iran has cost the United States: $38 billion so far, with another $3 billion in expenses accumulating each month. The accounting goes beyond dollars. The conflict is feeding inflation—the CBO projects it will push prices up by half a percentage point in the first quarter of 2027—and it has depleted the military's munitions supplies so severely that restocking them could take as long as five years.

The report arrives as the Trump administration, which launched the war alongside Israel in February, faces intensifying criticism over a conflict that was supposed to be brief. Trump initially estimated it would last several weeks. It has not. The war has disrupted global energy markets, sent oil prices climbing, and created the kind of economic headwinds that voters notice at the grocery store and the gas pump—a particular vulnerability as the November midterm elections approach.

Defense Secretary Pete Hegseth offered similar figures during congressional testimony in July, placing the war's cost at $37.5 billion. He used the opportunity to push for a substantial increase to the military budget, already the world's largest by a considerable margin. When pressed on whether the conflict was becoming a protracted quagmire, Hegseth pushed back sharply against critics, insisting the war remained on track.

But the munitions problem is concrete and difficult to dismiss. Reports have shown that the war has exhausted supplies of critical weapons systems, constraining the military's ability to meet commitments elsewhere in the world. A separate report from Pentagon inspectors general, released just before the CBO analysis, documented munitions shortfalls, production bottlenecks, and the loss of dozens of American aircraft during the fighting. Pentagon spokesperson Sean Parnell responded to the munitions reports by asserting that the military had everything needed to strike whenever the president ordered.

The Trump administration has rejected the characterization of supply problems and continued to defend the war's necessity. In a social media post on Monday, Trump predicted that oil prices would plummet once the conflict ended, and suggested that outcome was imminent. He also argued that aside from temporary oil volatility, prices were already falling sharply.

Brendan Boyle, a senior Democrat on the House Budget Committee who requested the CBO study, framed the findings differently. He noted that American servicemembers had been killed and wounded, that taxpayers had borne a mounting bill, and that the war was continuing to drive up costs for ordinary Americans. The report does not account for borrowing costs tied to the war or damage from Iranian attacks on U.S. military installations in the Middle East, meaning the true fiscal and strategic toll may be larger than the $38 billion figure suggests.

As the midterm campaign intensifies and voters weigh the war's impact on their household finances, the gap between the administration's optimism and the CBO's sober accounting has become a central point of political contention.