Iran War Drives U.S. Costs, Damage and Political Backlash

A nonpartisan Congressional Budget Office report says the six-month US war on Iran has already cost approximately $38 billion and is adding about $3 billion in costs each month. The conflict is also projected to raise US inflation by 0.5 percentage points during the first three months of 2027. The findings intensify criticism of the Trump administration over the war, which was launched by the United States and Israel in February and has disrupted global energy markets, contributing to higher prices and growing voter concern about the cost of living before the November midterm elections. The estimate is broadly consistent with Defense Secretary Pete Hegseth’s July congressional testimony, when he estimated the war’s cost at $37.5 billion and urged lawmakers to significantly expand the already large US military budget. Hegseth also rejected claims that the conflict was becoming a “quagmire,” despite the war lasting longer and costing more than initially expected. The report further warns that the conflict has strained US supplies of important munitions. Replenishing stockpiles could take as long as five years, potentially affecting the military’s ability to meet commitments elsewhere. The CBO estimate excludes borrowing costs and damage caused by Iranian attacks on US military installations in the Middle East, suggesting the total financial burden could be higher. The report follows a Pentagon inspector general review that documented munitions shortages, production bottlenecks, and the loss of dozens of US aircraft. The Trump administration has rejected claims that military supplies are dangerously low and continues to argue that the war is justified. President Donald Trump has said oil prices will fall sharply once the conflict ends, while Pentagon spokesperson Sean Parnell maintained that the military has the resources needed to strike whenever the president orders it.

Images obtained by BBC partner CBS News reportedly show extensive damage to US military sites in Saudi Arabia and Kuwait following Iranian strikes. The undated photographs, supplied by active military personnel, depict a Boeing E-3 Sentry radar aircraft severed in half at Prince Sultan Air Force Base, destroyed trailers and a shredded tent-like structure at Camp Buehring, and a damaged four-storey building at Camp Arifjan. The BBC has not independently verified the images, although BBC Verify previously confirmed a similar photograph of the destroyed E-3 aircraft. The attacks reportedly wounded 12 US personnel at Prince Sultan, two seriously. The photographs were published shortly after a Pentagon watchdog report confirmed that Iranian strikes damaged or destroyed hundreds of buildings and structures at US bases across the Middle East. The report estimated equipment losses at $3.7bn and total US war spending through 29 June at $33.4bn. It said dozens of aircraft had been damaged or destroyed, including five refuelling aircraft in Saudi Arabia. A Congressional Budget Office report estimated that equipment lost in battle, including aircraft, drones and a missile-defence system, could cost $1.9bn to replace. It also noted that the E-3 is no longer in production and would need to be replaced by the more modern E-7. Brian Katulis, a former national security official, argued that the damage demonstrated inadequate US defensive preparations and had weakened broader military readiness. He said US resources and assets had been diverted from Asia, potentially increasing China’s opportunities, while depleted munitions could make Russia more willing to challenge NATO allies. The extent of rebuilding remains unclear, partly because the Defence Department did not provide requested information to the CBO. The report comes amid growing political pressure to end the conflict, which began on 28 February with joint US-Israeli attacks on Iran. The US House of Representatives again voted to end US military action without congressional approval, while the Senate’s position remains uncertain. Republican Congressman Thomas Massie also announced an effort to impeach Defence Secretary Pete Hegseth, though the Trump administration defended him.

Exclusive photographs obtained by CBS News from active-duty service members show extensive damage at multiple U.S. military positions in the Middle East following Iranian missile and drone attacks. The sources provided the images anonymously because of strict military media restrictions and said the scale of destruction had not been adequately communicated to the American public. At Prince Sultan Air Force Base in Saudi Arabia, one photograph shows a Boeing E-3 Sentry aircraft with its tail completely severed from a charred fuselage. The aircraft’s rotating radar system is essential to airborne intelligence collection. Additional images from the base depict destroyed buildings and barracks, many of which were left standing only as hollow shells. Nearby concrete “T-wall” barriers, designed primarily to protect against grenades and mortar fire, remained intact but offered little protection against aerial attacks. Similar destruction was photographed at Camp Buehring in Kuwait, a remote desert staging area used by U.S. Army ground troops, armored vehicles and aircraft. The images show demolished trailers, damaged buildings and a destroyed vehicle. Another photograph depicts damage at Camp Arifjan, also in Kuwait. The report follows a Defense Department inspector general assessment that identified up to $3.7 billion in equipment losses during the conflict, including nearly 60 aircraft. The report stated that U.S. Central Command had recorded Iranian strikes against American bases in Kuwait, Bahrain, Qatar, the United Arab Emirates, Saudi Arabia, Iraq, Oman and Jordan. The Pentagon did not respond to CBS News’ request for comment. A service member disputed Defense Secretary Pete Hegseth’s description of attackers as “squirters,” saying the bases were not being effectively defended and were instead being watched as they were destroyed. The article also notes that a March 1 attack on Kuwait’s Port of Shuaiba killed six U.S. troops.

The Congressional Budget Office estimates that the U.S. war with Iran cost the Pentagon $38.1 billion through Aug. 1, with an additional $2 billion to $3 billion expected for every further month of fighting. More than half of the spending has gone toward replacing missiles and other munitions, while increased military flight operations cost $10.4 billion and higher fuel prices added $2.7 billion. The conflict has also sharply depleted U.S. missile-defense inventories. The CBO estimates that American forces have used as much as two-thirds of the nation’s interceptors since June 2025, partly while defending Israel from Iranian attacks. Rebuilding those stocks could take at least five years, even if production increases. The CBO also projects broader economic effects. Disruptions to oil and natural-gas shipments through the Strait of Hormuz, along with problems affecting Red Sea shipping, are expected to raise inflation. By early 2027, the war could add 0.5 percentage points to year-over-year personal consumption expenditures inflation and 0.3 percentage points to core PCE inflation. Fuel is expected to account for about 40% of the conflict’s effect on consumer prices. The Pentagon’s inspector general separately estimated that the war cost $33.4 billion through June 29, including $22.3 billion for expended munitions, $7.4 billion in operating costs and $3.7 billion in equipment losses. Iranian attacks damaged hundreds of structures across eight Middle Eastern countries and destroyed or damaged numerous aircraft, including F-15E and F-35A fighter jets, refueling aircraft, helicopters and drones. The conflict also generated State Department evacuation costs and damage to diplomatic sites. The reports are likely to intensify political debate over a war President Donald Trump initially said would last only weeks. Democrats are highlighting its effects on fuel, food and other prices, while Trump has justified the conflict as necessary to prevent Iran from developing nuclear weapons. The depleted missile inventories could also create serious risks in a future confrontation with China, including a conflict over Taiwan.

The US House of Representatives has voted for a third time to end the United States’ military conflict with Iran, approving a war powers resolution by 220 votes to 204. The measure would restrict President Donald Trump’s ability to continue military operations without congressional authorization, but none of the House resolutions has reached the president’s desk. Trump is expected to veto the latest resolution if it advances. The vote came as the conflict approaches seven months and becomes an increasingly important issue in campaigns for the upcoming US midterm elections. All House Democrats supported the resolution, joined by seven Republicans, including lawmakers from politically competitive districts and retiring Representative Nancy Mace. Supporters, led by Democratic Representative Seth Moulton, argued that Congress must exercise its constitutional authority over military action. Republican opponents, including Foreign Affairs Committee Chairman Brian Mast, maintained that Iran remains a continuing threat and defended Trump’s policy as an effort to end decades of conflict rather than initiate a permanent war. The conflict began on 28 February and has involved intermittent missile strikes, creating instability across the region. Disruptions to oil shipments through the Strait of Hormuz have contributed to higher fuel prices, while the Congressional Budget Office estimates that the war had already cost more than $38 billion by 1 August. The conflict is projected to cost an additional $2 billion to $3 billion each month and raise inflation by 0.5 percentage points through 2027. Congressional efforts to limit the war face significant obstacles. The Senate approved a similar resolution on its tenth attempt but reversed course after Trump criticized Republican senators. The article also outlines the War Powers Act, which requires congressional approval for sustained military operations after specific time limits. House Speaker Mike Johnson said the conflict was entering a new phase and predicted that gas and grocery prices would eventually decline.

New photographs obtained from active-duty US service members reportedly show extensive damage to American military bases and equipment in Saudi Arabia and Kuwait after Iranian missile and drone attacks during the war. The images depict destroyed aircraft, collapsed camps, damaged buildings, trailers, and burned vehicles. Service members told CBS News that the scale of destruction had not been fully communicated to the American public and challenged official claims about the effectiveness of US defenses. One photograph reportedly shows the remains of a $270 million E-3 Sentry surveillance aircraft destroyed in March at Saudi Arabia’s Prince Sultan Air Force Base. At the time, the US Air Force had 16 E-3 aircraft in service, with six stationed at that base. Other photographs show damage at Camp Buehring and Camp Arifjan in Kuwait, facilities used by US Army ground troops. Camp Arifjan is near Port Shuaiba, where six US troops were killed by Iranian drones at the beginning of the conflict. A service member disputed Defense Secretary Pete Hegseth’s assertion that only a small number of Iranian strikes had penetrated US defenses. The soldier claimed that the bases were not being effectively defended and that troops were watching them sustain repeated damage. US Central Command had not responded to a request for comment at the time of publication. The photographs were released shortly after a Defense Department Office of Inspector General report assessed the financial impact of the conflict. The report estimated approximately $3.7 billion in equipment losses, including nearly 60 aircraft. It placed the total cost of the first four months of the war at $33.4 billion, excluding infrastructure repair expenses. Together, the images and the report suggest that the material and financial consequences of the Iranian attacks were substantially greater than some public statements had indicated.

The article examines how the U.S.-Iran war is placing additional financial pressure on American households through sharply higher energy prices, rising Treasury yields, and increased government spending. Moody’s Analytics estimates that the conflict has added roughly $1,760 in costs per household since it began. Higher energy expenses account for about $930 of that amount, while increased interest rates contribute $425 and additional military spending accounts for $405. Collectively, U.S. consumers have spent more than $121 billion extra on energy. Oil prices have risen above $105 per barrel, while the average U.S. gasoline price has exceeded $4.32 per gallon—36% higher than a year earlier. Diesel prices have reached record highs, increasing transportation costs that could eventually be passed on through higher prices for groceries and other goods. Rising fuel costs are also contributing to faster inflation in categories such as air travel. At the same time, the 10-year Treasury yield has reached its highest level since 2007, pushing mortgage rates above 7% and raising borrowing costs for homes, cars, credit cards, and business investment. Economists warn that higher corporate financing costs could slow hiring and worsen an already weak “low hire, low fire” labor market. The financial strain is especially severe for lower-income households, which spend a larger share of their income on energy. Economists say increased energy costs have more than offset the benefits of larger tax refunds under President Donald Trump’s tax legislation. With inflation rising faster than incomes, real earnings and purchasing power are declining. Consumers are increasingly using savings to maintain spending, but economists warn that this cannot continue indefinitely. A pullback in consumer spending could threaten economic growth because household consumption represents most of U.S. GDP.