--- title: Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds description: The report from the nonpartisan Congressional Budget Office estimates the war will cost the country another $2 billion to $3 billion each month it continues. canonical: https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/ author: Nik Popli article:opinion: false article:content_tier: free article:published_time: 2026-09-15T18:00:41.160Z article:modified_time: 2026-09-15T18:00:41.365Z article:section: Politics og:title: Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds og:description: The report from the nonpartisan Congressional Budget Office estimates the war will cost the country another $2 billion to $3 billion each month it continues. og:url: https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt4a2178bd5770b67b/6aa9627aef556ffbe3c2a678/GettyImages-2287743633.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: GettyImages-2287743633.jpg og:type: article twitter:card: summary_large_image twitter:title: Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds twitter:description: The report from the nonpartisan Congressional Budget Office estimates the war will cost the country another $2 billion to $3 billion each month it continues. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt4a2178bd5770b67b/6aa9627aef556ffbe3c2a678/GettyImages-2287743633.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds > Sponsored content. 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Brief is free at time.com/newsletters.  by [Nik Popli](https://time.com/author/nik-popli/)  ## Nik Popli Staff Writer Sep 15, 2026 6:00 PM UTC  President Donald Trump and Secretary of Defense Pete Hegseth at a Cabinet meeting at Camp David in Maryland, on July 31, 2026 President Donald Trump and Secretary of Defense Pete Hegseth at a Cabinet meeting at Camp David in Maryland, on July 31, 2026 Aaron Schwartz—AFP via Getty Images  by [Nik Popli](https://time.com/author/nik-popli/)  ## Nik Popli Staff Writer Sep 15, 2026 6:00 PM UTC The war with Iran has cost the U.S. government around $38 billion and contributed to growing inflation, according to a new analysis by the Congressional Budget Office, the nonpartisan agency that provides economic and budget estimates to Congress. The estimate, which covers the war’s direct costs through Aug. 1, is in line with the Pentagon’s [most recent public accounting](https://time.com/video/XNWCOyDt/) from July, when Defense Secretary Pete Hegseth told Congress that the war had cost $37.5 billion. A later [report](https://media.defense.gov/2026/Sep/09/2003993626/-1/-1/1/OEF%5FQ3%5FJUN2026%5FFINAL%5F508%20SECURE.PDF) from the Defense Department's inspector general determined that conflict cost an estimated $33.4 billion between February 28 and June 30. But the new CBO analysis finds that the price of the war is continuing to rise, estimating that the government will spend another $2 billion to $3 billion each month the conflict continues. It also notes that the war has significantly depleted U.S. munitions, including air-defense interceptors, potentially reducing the military’s capacity to respond to another major conflict. Taken together, the reports are a mixed bag for an Administration that has faced mounting questions over the consequences of a war President Donald Trump initially said would be over in a few weeks. Nearly $40 billion is a substantial sum, Democrats say, particularly at a time when the federal government is carrying more than $40 trillion in gross debt and most Americans consider affordability their top issue heading in the midterms. However, the estimate is considerably lower than some early projections of what the conflict could cost, giving the Administration an argument that the direct military price of the war has so far been more limited than some critics had feared. The bulk of the spending—$21.7 billion—comes from replacing munitions expenditures, the CBO found, including $13.1 billion for missile defense interceptors and $7.3 billion for land-attack cruise missiles. Other costs include repairing or replacing equipment, increased flying hours for air operations and transportation, and increased fuel costs. However, it does not factor in the cost of damage to U.S. bases and facilities in the Middle East. The separate report from the Defense Department's inspector general, released a day before the CBO’s, estimated the cost of repairing "physical damage from Iranian strikes" to U.S. diplomatic facilities in Iraq, Kuwait, Saudi Arabia, and the UAE at approximately $184 million. It also determined that throughout Operation Epic Fury the U.S. military has spent $22.3 billion on munitions and has lost around $3.7 billion in aircraft and equipment, including four destroyed F-15 fighter jets, seven KC-135 tanker aircraft, a dozen damaged or destroyed KC-135 refueling aircraft, and the loss of up to 30 MQ-9 Reaper drones. The CBO estimates that replenishing the stockpiles depleted by the war could take five years or longer, suggesting the true cost of the conflict could not be known until the Pentagon spends money to rebuild inventories and restore capabilities that existed before the war. Top Administration officials have repeatedly denied claims of U.S. munitions shortages ahead of the two reports, though the Defense Department [urged the defense industry](https://www.washingtonpost.com/technology/2026/08/08/pentagon-presses-defense-firms-build-weapons-iran-war-depletes-stocks/) to increase weapons manufacturing last month. The CBO’s accounting gives members of Congress an independent assessment against which to judge the Trump Administration’s requests to continue funding its military campaign in Iran. As Congress’s nonpartisan fiscal scorekeeper, the CBO’s findings frequently become the benchmark lawmakers use to debate the consequences of tax and spending decisions. However, the CBO report notes that its own estimates “are subject to considerable uncertainty” because it relied on government databases and public reports as the Defense Department did not respond to the CBO’s requests for information. Democrats are using the findings to argue that the money could have been better spent easing the cost of living. “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 leaving Americans to pay the price,” Rep. Brendan Boyle, the ranking member of the House Budget Committee, said in a statement. In March, Boyle asked the agency to examine the costs of military operations and the conflict’s effects on prices at home. Democrats were expecting the cost estimate to be higher than the CBO reached in its report, in part because they believed it would account for the cost of borrowing to finance the war. The $40 billion figure does not include debt service, or additional interest the government could pay over time. As a result, the CBO estimate is not a final accounting. Much of the information needed to assess the military’s expenditures remains classified or undisclosed, and the eventual bill will also depend on decisions still ahead about troop deployments, replenishing weapons, and rebuilding damaged American bases. Earlier this summer, the White House requested an additional $67.1 billion for the Pentagon, while House Republicans later advanced a spending framework containing roughly $73 billion in additional funding for defense and intelligence as Democrats pushed back, saying that they lack a clear picture of the war’s duration and ultimate requirements. Outside Washington, the costs are less abstract. The national average price of regular gasoline reached [$4.33 a gallon](https://gasprices.aaa.com/) on Tuesday, up from $4.01 a month earlier. [Diesel surpassed $6 a gallon](https://time.com/article/2026/09/11/us-diesel-prices-record-high-impact-groceries-american-consumers/), increasing the expense of moving goods across the country. An [Energy Department forecast](https://www.eia.gov/outlooks/steo/pdf/steo%5Ffull.pdf#page=32) released last Wednesday projected that gasoline would remain near $4 for the rest of the year. The CBO expects the war to add roughly 0.5 percentage points to inflation in the price index for personal consumption expenditures in the first quarter of 2027, driven largely by higher energy prices resulting from supply disruptions in the Strait of Hormuz and the Red Sea. Inflation reached an annual rate of 3.4% in August, according to figures released Friday, compared with 2.4% in February. The pace of the war has ebbed and flowed in recent months, with sporadic bursts of fighting and attacks across the region. Shipping through the Strait of Hormuz remains disrupted, renewed attacks have threatened commercial vessels, and Houthi strikes on Saudi energy infrastructure have complicated efforts to move oil through alternative routes. The uncertainty has helped push oil prices back above $100 a barrel. Trump has more recently asked Americans to accept higher prices as the cost of preventing Iran from acquiring a nuclear weapon. His assurances about the duration of that sacrifice, however, have changed. In March, he described the war as a “short-term excursion” that would end “soon.” Last week, speaking at a Republican convention in Dallas, he said the war would end “immediately after” the midterm elections. ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/"},"headline":"Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds","datePublished":"2026-09-15T18:00:41.160Z","dateModified":"2026-09-15T18:00:41.365Z","description":"The report from the nonpartisan Congressional Budget Office estimates the war will cost the country another $2 billion to $3 billion each month it continues.","url":"https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/","keywords":["Iran","Congress","Trump Administration"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/blt4a2178bd5770b67b/6aa9627aef556ffbe3c2a678/GettyImages-2287743633.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Nik Popli","jobTitle":"Staff Writer","url":"https://time.com/author/nik-popli/"}],"articleSection":"Politics","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/blt4a2178bd5770b67b/6aa9627aef556ffbe3c2a678/GettyImages-2287743633.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"GettyImages-2287743633.jpg","caption":"","creditText":"Aaron Schwartz—AFP via Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/politics/","name":"Politics"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/iran/","name":"Iran"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/article/2026/09/15/iran-war-cost-inflation-cbo-report/","name":"Iran War Has Cost U.S. Nearly $40 Billion and Fueled Inflation, CBO Finds"}}]}] ```