The Pentagon’s direct military expenditures in the ongoing war with Iran have surpassed $38 billion, according to an assessment by the nonpartisan Congressional Budget Office (CBO). The agency warned that if hostilities continue at their current intensity, the US Treasury will face an additional operational drain of at least $3 billion or more every month.
The CBO’s independent evaluation was released on Tuesday (September 15, 2026), citing reporting by the Associated Press. The report detailed that as of August 1, 2026, baseline military costs for the campaign had crossed $38 billion, with total projections subject to significant upward revisions depending on combat intensity.
The CBO explicitly highlighted that the conflict will exert upward pressure on US inflation through the first quarter of 2027, potentially raising overall inflation by approximately 0.5 percentage points above earlier baseline projections. This spike is primarily driven by supply disruptions through the Strait of Hormuz—impacting global crude oil and natural gas shipments—and ongoing maritime blockades in the Red Sea elevating global freight and commodity prices.
Commissioned at the request of Representative Brendan Boyle, the ranking Democrat on the House Budget Committee, the CBO’s findings closely align with testimony from Defense Secretary Pete Hegseth, who previously cited military expenditures at $37.5 billion during a Senate hearing. The CBO confirmed that the vast majority of these funds have been directed toward replenishing depleted stockpiles of advanced missiles, munitions, and tactical hardware. Crucially, this tally excludes long-term healthcare, disability benefits, and combat casualty compensation for service members.
The report arrives as the conflict—which began on February 28—enters its seventh month with no immediate diplomatic resolution in sight. With the upcoming midterm elections approaching, the mounting financial burden of the war and rising domestic inflation have emerged as central political battlegrounds.
