CBO Reports Iran War Cost $38 Billion and Depleted Munitions

The Congressional Budget Office (CBO) reports that the six-month conflict with Iran has cost the United States approximately $38 billion through August 1, 2026. The nonpartisan analysis indicates that munitions expenditures represent the largest cost at $21.7 billion, with the U.S. having depleted between one-half and two-thirds of its missile-defense interceptor inventory. The CBO warns that rebuilding these stockpiles could take five years or longer, potentially leaving the U.S. vulnerable to other adversaries like China.

Donald Trump has shifted toward economic pressure after Iran refused to relinquish its nuclear program. While the president claimed the U.S. is "producing more Exquisite and Elite Weapons than at any time in our History," the CBO and a Pentagon inspector general report highlight critical shortages of high-end munitions. The conflict has also caused significant physical damage, including the loss of 60 aircraft and hundreds of base structures across eight countries, resulting in 18 U.S. military deaths.

Economically, the war is driving U.S. inflation and borrowing costs. The CBO projects a 0.5 percentage point increase in inflation by early 2027 due to Iranian blockades of the Strait of Hormuz and disruptions in the Red Sea. These factors have pushed gasoline prices up by 45% and sent diesel to record highs.

Funding for the conflict, dubbed Operation Epic Fury, has been drawn from base budgets for training and maintenance because Congress has not approved a dedicated appropriation. The White House has requested between $67 billion and $70 billion in emergency funding, a move that has faced resistance from Democrats and some Republicans ahead of the November midterm elections.