WASHINGTON — The military conflict between the United States and Iran has cost the Department of Defense more than $38 billion through August 1, according to a newly released assessment by the nonpartisan Congressional Budget Office (CBO).
The report warns that the ongoing hostilities will continue to strain federal finances, costing an additional $2 billion to $3 billion or more each month depending on the intensity of the fighting.
The conflict, which erupted following U.S. and Israeli strikes targeting Iran on February 28, is now well into its seventh month with no clear end in sight. According to the CBO, the bulk of the $38 billion expenditure has gone toward replacing munitions expended during combat and equipment lost in battle, alongside increased fuel costs for the military.
The financial toll is also rippling through the broader U.S. economy. The CBO noted that the war is expected to contribute to persistent inflation through the first quarter of 2027, projecting inflation rates to be roughly 0.5 percentage points higher than previous estimates. This inflationary pressure is largely being driven by disruptions to global energy markets, particularly the reduction of oil and natural gas shipments through the critical Strait of Hormuz and ongoing shipping troubles in the Red Sea.
The budget office’s figures align closely with previous testimony given by Defense Secretary Pete Hegseth, who told the Senate in July that the war had racked up roughly $37.5 billion in expenses. However, the CBO's estimates do not account for costs related to military personnel killed or injured in the conflict, nor do they factor in longer-term veterans’ healthcare and disability compensation.
Lawmakers have quickly seized on the findings. Representative Brendan Boyle, the top Democrat on the House Budget Committee who requested the report, slammed the mounting financial and human cost of the engagement.
"Beyond the war's 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," Boyle said in a statement. "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 leavi
The White House previously requested $87.6 billion in supplemental funding in June—a significant portion of which was targeted at the war effort—though Congress has yet to pass it. The CBO noted that its estimates carry considerable uncertainty because the Department of Defense declined to provide direct information for the assessment, forcing the budget office to rely instead on public databases and official reports.
Meanwhile, a separate Pentagon inspector general report released earlier this week warned that the prolonged conflict has resulted in critical "strategic inventory shortfalls," raising concerns about military readiness as the war continues to unfold against the backdrop of upcoming U.S. midterm elections.
