Iran war cost hits $38bn, adds to inflation pressure as Trump and Republicans struggle to sell conflict ahead of midterms

The US-Israel war on Iran, seven months old and with no end in sight, has now cost American taxpayers $38 billion and is projected to add 0.5 percentage points to inflation in early 2027, according to a nonpartisan Congressional Budget Office (CBO) report released on September 16 Source 3. The assessment lands as the White House continues to downplay the conflict, calling it “small potatoes” and “not a big thing,” even as the war strains military readiness and casts a shadow over the Republican Party’s midterm convention in Dallas.

The CBO report, requested by House Budget Committee Democrat Brendan Boyle, estimates that costs are rising by $3 billion per month and that replenishing depleted munitions stockpiles could take up to five years. The inflation projection—a 0.5 percentage point increase in the first three months of 2027—directly links the war to one of the key voter concerns ahead of November’s midterm elections: the cost of living. The estimate aligns with July testimony from Secretary of Defense Pete Hegseth, who placed the war’s cost at $37.5 billion and urged Congress to approve a dramatic increase in the already record US military budget Source 3.

President Donald Trump has used a rotating set of minimising phrases to describe the conflict since it began on February 28. On September 4, during an Oval Office signing event, he called it “small potatoes” and said, “It’s not a big thing,” comparing it favourably to the January 3 operation to abduct Venezuelan President Nicolas Maduro, in which no US personnel were killed. Trump confirmed that 18 US service members have died in the Iran campaign Source 1. Vice President JD Vance, at a White House news briefing a day earlier, argued that there was “no active shooting” and that major combat operations lasted only six weeks. Trump said there was “a lot of truth” to that, calling the fighting a “military conflict” and insisting, “We do intermittent strikes … There’s no fighting.” Source 1

Yet the facts on the ground and in the markets tell a different story. On September 9, as Trump prepared to deliver a keynote address at the Republican midterm convention in Dallas, Brent crude oil prices rose above $100 per barrel for the first time since July—a direct consequence of the conflict’s disruption to global energy markets Source 2. The convention, billed as a “Trump-a-palooza” by supporters, was designed to centre the president in the final stretch of the campaign. But the war’s economic side effects cut awkwardly across the party’s usual advantage on economic issues.

Speaking to Al Jazeera at the convention, some supporters expressed confusion. Carter Eisinger, a 27-year-old electrician from Fargo, North Dakota, said he struggled to see how the war fit into Trump’s “America First” vision. “In my opinion, I don’t really see the connection of how a war in Iran helps us here in the country,” Eisinger told Al Jazeera, adding that he was willing to pay higher gas prices if the war was justified—but that he hadn’t seen that justification Source 2. These mixed views reflect a wider disconnect: the party is trying to rally voters around a president who has acknowledged 18 US deaths but calls the conflict “small potatoes,” even as a nonpartisan report projects explicit inflation pain for American households.

Brendan Boyle, in a statement, framed the CBO findings as damning. “Donald Trump’s disastrous war in Iran has already taken the lives of brave American servicemembers and left others wounded. Beyond that human toll, this nonpartisan CBO report makes clear that the war has also cost American taxpayers tens of billions of dollars and counting, while continuing to drive up costs.” Source 3

Trump has previously suggested the war “will end immediately” after the US midterm elections in November Source 2. But the CBO’s five-year estimate for munitions replenishment and the steady monthly cost of $3 billion raise a strategic question: even if active combat stops, the economic and military consequences of this war will outlast the current political calendar.