NEW: Trump’s War in Iran Cost DoD Nearly $40 Billion and Drove Nearly Half of Inflation, According to CBO Report

Text of Report (PDF)

Washington, D.C. – Today, in response to an inquiry led by Senators Elizabeth Warren (D-Mass.), Jeff Merkley (D-Ore.), Ranking Member of the Senate Budget Committee, along with Minority Leader Chuck Schumer (D-N.Y.), the nonpartisan Congressional Budget Office (CBO) released new data on the cost of President Trump’s war in Iran.

The major findings include:

• Trump’s war with Iran cost the Department of Defense (DoD) nearly $40 billion as of Aug 1 – without including the cost of damage to “hundreds of buildings and structures at U.S. bases” in the region.
• The U.S. military will not be able to replace munitions destroyed in the war for at least five years.
• CBO estimates that more than 40% of inflation from the second quarter of 2026 is a consequence of Trump’s war.
• CBO estimates that inflation will be 0.5 percentage points higher in the first quarter of 2027 than it would have been without the war—ultimately driving interest rates higher and increasing borrowing costs for American families and businesses.
• CBO estimates that it will take “at least five years—even if production was increased” to replace the munitions destroyed.

CBO’s estimate did not include $113 million in costs incurred by State, including $79.2 million “to respond to contingencies stemming from the Iran conflict.” Additionally, given that the macroeconomic projections were based on data through August 17, 2026, and global oil prices and futures have increased since then, it’s likely that these estimates do not capture the full extent of the war’s continued impact on inflation.

“Trump’s illegal war with Iran is a one-two punch that’s burning a hole in Americans’ pockets and burning a hole in our munitions supply, hurting our military readiness,” said Senator Warren. “This war is a betrayal of the American people, and it needs to end.”

“After months of the Trump Administration hiding the true cost of his illegal war of choice with Iran, the American people are finally getting independent and objective answers on the cost of the conflict,” said Senator Merkley. “As prices for everything from groceries to gas skyrocket, we must end this abuse of taxpayer dollars and double down on ending Trump’s illegal war. It has cost America dearly.”

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