How Much Is the Iran War Costing the US?

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How Much Is the Iran War Costing the US?

The Pentagon hasn't said how much the war with Iran is costing, but a new analysis from the Center for Strategic and International Studies, a bipartisan think tank, estimates that the first 100 hours of "Operation Epic Fury" cost $3.7 billion, or $891.4 million a day.

"Some of these costs are already budgeted, but most ($3.5 billion) are not," the center's Mark F. Cancian and Chris H. Park write in their analysis, published Thursday.

That estimate is in line with a preliminary one reportedly from the Pentagon, which The Atlantic said was $1 billion a day, citing an unnamed congressional official who spoke after a closed-door briefing for lawmakers this week by senior members of the Trump administration.

Rep. Brendan Boyle of Pennsylvania, the top Democrat on the House Budget Committee, requested yesterday that the Congressional Budget Office prepare an estimate that factors in both combat operations and other direct or indirect costs. In the meantime, Politico reported Friday that some Republican lawmakers have heard estimates that the Pentagon's war spending could be as high as $2 billion a day. "Trump officials in private briefings have declined to give lawmakers any specific numbers, according to six congressional Republicans granted anonymity to describe the internal discussions," Politico's Meredith Lee Hill reported.

Another cost estimate provided to CNN by Kent Smetters of the Penn Wharton Budget Model projected that the price of a two-month war could be between $40 billion and $95 billion. Smetters told Fortune that the total economic cost of the strikes could range from $50 billion to as high as $210 billion when disruptions to trade, energy markets and other factors are considered. (He also noted that the cost of the war pales in comparison to the potential damage if Iran got and used a nuclear weapon.)

The CSIS report projects that the daily cost of the military operation could come down. "The shift of U.S. forces to less expensive munitions and the steep decline of Iranian drone and missile launches will drive costs down," it says. "However, future costs will depend mostly on the intensity of operations and the effectiveness of Iranian retaliation."

Even if the daily costs do drop, the CSIS report projects that unbudgeted expenses going forward "will be substantial" and that the Pentagon will need additional funding because the costs of the war will be "politically and operationally" challenging to offset through budget cuts elsewhere. Early cost estimates have led to reports that the Pentagon may request some $50 billion in supplemental funding for the war effort and related costs, such as replacing munitions stockpiles.

"The political challenge for the administration will be that any funding action will become a focal point for opposition to the war," the CSIS report notes.

Money for munitions: Air operations cost about $125 million over the first 100 hours of the war and are expected to cost about $30 million for each additional day. The early cost of naval operations was about $65 million, with fleet operations incurring another $15 million a day at current size.

By far the largest cost of the war effort comes from munitions. "The United States has expended over 2,000 munitions of various types in the first 100 hours of the campaign," the think tank report says, noting that U.S. Central Command has provided few specifics thus far. "Using past U.S. air campaigns as a guide, this analysis estimates it will cost $3.1 billion to replenish the U.S. munitions inventory on a like-for-like basis, with the costs increasing by $758.1 million a day."

As the war has progressed and Iranian defenses have been degraded, the U.S. military can now use different types of munitions, shifting to ones that can be fired from closer to targets - which also cost less.

The CSIS report gives an example of the cost difference: While each Tomahawk cruise missile used in the opening phase of the war costs $3.6 million, equivalent bombs equipped with Joint Direct Attack Munition guidance kits cost $80,000 apiece. As a result, the new analysis predicts that "munitions costs will go down substantially as the U.S. strike operations switch to less expensive munitions."

A costly planning problem? The Atlantic's Simon Shuster and Nancy A. Youssef reported Thursday that the early days of the war revealed a costly gap in U.S. planning: "the United States and its allies used their most advanced anti-aircraft systems to shoot down swarms of cheap, easily replaceable Iranian drones."

For example, the U.S. has been shooting missiles that cost millions of dollars apiece to bring down drones that might run $30,000 each.

That suggests a failure to adopt lessons in drone warfare from Ukraine's fight against Russia. Ukraine has innovated less expensive ways to shoot down the Iranian-designed Shahed-136 drones launched at it by the thousands by Russia.

"Alternative means of defending against drone attacks-such as lasers-could bring down the cost of intercepting a drone from millions of dollars to a few bucks," Schuster and Youssef write. "But until recently, the U.S. had invested more in its multilayered defense against drones, which involves interceptors, combat air patrols, electronic warfare, and short-range missiles. The U.S. was planning for-and bought weapons aimed at countering-threats from far-away targets such as China, not close-range foes such as Iran."

Ukrainian President Volodymyr Zelensky said in a post on X this week that he had spoken with the leaders of the United Arab Emirates, Qatar, Jordan and Bahrain and would be speaking with others in the Middle East. He said he had agreed to provide Ukrainian expertise and aid in defending against drone strikes. "Our military possesses the necessary capabilities," Zelensky wrote. "Ukrainian experts will operate on-site, and teams are already coordinating these efforts."

What's next: Congress is preparing for a funding request from the White House and the Pentagon. Some fiscal conservatives are already signaling that they'll want any additional funding to be offset, while other lawmakers are reportedly eyeing other funding needs that could be included in a new spending package, from tariff relief for farmers to disaster aid.

US Lost 92,000 Jobs in February as Unemployment Rate Rose to 4.4%

The U.S. economy shed 92,000 jobs and the unemployment rate rose a tenth of a percentage point to 4.4% in February, the Bureau of Labor Statistics announced Friday. The results fell far short of expectations, as Wall Street analysts predicted job growth of about 60,000 during the month. The unexpected weakness raised concerns about an economy that now also faces serious headwinds from rising energy costs and rapidly escalating global conflict.

Job losses cut across industries, though they were likely amplified by one-time effects. The construction sector lost 11,000 jobs, due in part to exceptionally cold weather in many parts of the country. Restaurants and bars cut 30,000 jobs, which might also have been related to weather. Healthcare, a rare bright spot in hiring recently, lost 38,000 jobs, driven by healthcare worker strikes in California and Hawaii.

Continuing a longer-term trend, manufacturers cut 12,000 jobs. The sector has seen losses in 14 of the past 15 months, shedding 100,000 jobs since President Trump took office.

Federal employment continued to shrink as well, dropping by 10,000 in February. The federal government has cut 327,000 jobs since January 2025.

Financial firms were a bright spot, adding 11,000 jobs. And wage growth was solid, with average hourly wages rising 0.4% from the previous month and 3.8% from a year earlier.

What the analysts are saying: The February jobs report highlights the precarious state of the U.S. labor market.

"Just when it looked like the labor market was stabilizing, this report delivers a knock-down blow to that view," said economist Olu Sonola of Fitch Ratings, per the Associated Press. "It's bad news whichever way you look at it."

Navy Federal Credit Union Chief Economist Heather Long noted that the "US economy has LOST jobs since April 2025," with job growth between May 2025 and February 2026 totaling -19,000. "Companies are not hiring in the face of all of these headwinds and uncertainty," she wrote. "And even healthcare is starting to slow down."

Still, some analysts emphasized that monthly labor market data is bumpy, and it's too early to come to any firm conclusions. JPMorgan's Abiel Reinhart noted that when you look at January and February together, average job growth is about 30,000, not far off the 2025 average of 25,000 - soft, but not disastrous. Still, the "bad news is it's not clear this is good enough to stabilize the unemployment rate, which may still be gradually trending upward," Reinhart said in a report.

At the same time, there's no denying that job growth during the second Trump administration has been exceptionally weak. "In the 13 months since Trump took office, the economy has created a net total of 198,000 jobs compared with 1.4 million created in the last 13 months of the Biden administration," said Peter Baker of The New York Times.

Stagflation threat: Economists have been worried about the possibility of stagflation, in which unemployment and inflation rise at the same time. Inflation is still running above the 2% target set by the Federal Reserve. The recent increase in the cost of oil - prices shot above $90 a barrel on Friday after Trump demanded "unconditional surrender" from Iran - raises the odds that inflation could register another surge in the weeks and months ahead. Factor in a faltering labor market, and it could mean a period of stagflation that is painful for American workers and a serious challenge for the nation's central bank.

"The weak February jobs report is a problem for the Federal Reserve," Gus Faucher, chief economist at PNC Economics, said in a research note. "With inflation running at around 3%, above the central bank's target, and with inflation moving higher last year, the Federal Open Market Committee has expressed caution about near-term fed funds rate cuts, worried that they could stoke demand and push inflation even higher. High oil prices due to the conflict in Iran exacerbate that concern. But now the other part of the Fed's dual mandate, maximum employment, looks more at risk after the weak February jobs report. Rate cuts could support demand and stabilize the jobs market but could also push inflation higher."

RSM Chief Economist Joseph Brusuelas said he expects the threat of inflation to be weighed more heavily than the apparent weakness in the jobs market at the next Fed meeting in two weeks. "The risk of stagflation permeates this report," he said in a note Friday, "and all eyes will continue to be focused on the direction of energy prices and inflation."

Trump Admin Says Tariff Refunds Will Be Delayed

The Trump administration said Friday that it is unable to start refunding some of the tariffs paid by importers under the International Emergency Economic Powers Act, following the Supreme Court's ruling that those tariffs violate the law.

In a court filing, Brandon Lord of the U.S. Customs and Border Protection, which collects tariff fees, said the agency lacks the manpower and technology to immediately fulfill a judge's order to refund any IEEPA tariffs currently being processed. More than 330,000 importers have made 53 million payments associated with the IEEPA, worth about $166 billion.

The filing indicates that CBP may be able to begin making refunds in late April. "In light of the Court's March 5, 2026 amended order, CBP is now facing an unprecedented volume of refunds," the filing reads. "Its existing administrative procedures and technology are not well suited to a task of this scale and will require manual work that will prevent personnel from fully carrying out the agency's trade enforcement mission."

The filing also warns that "Personnel would be redirected from responsibilities that serve to mitigate imminent threats to national security and economic security."

Court of International Trade Judge Richard Eaton said earlier this week that he believes that CBP has everything it needs to start refunding the tariffs in question. "Customs knows how to do this," Eaton said at a court hearing on Wednesday. "They do it every day. They liquidate entries and make refunds."

Fiscal News Roundup

• Trump Says No Deal With Iran Until 'Unconditional Surrender' – CNN
• Mass Firings Leave National Security Ranks Thinned as War Raises Threats – Washington Post
• US Crude Oil Tops $90 a Barrel After Trump Demands Unconditional Surrender From Iran – CNBC
• US Launches $20 Billion Reinsurance Plan to Ease Gulf Oil Trade – Bloomberg
• The US Lost a Surprising 92,000 Jobs Last Month as the Unemployment Rate Ticked up to 4.4% – Associated Press
• Democrats Blame Trump for Weak Jobs Report as Republicans Play Defense – New York Times
• Fed's View of Stabilizing Employment Gets Tested by Surprise Slump – Bloomberg
• Trump's Trade War Has Hurt Farmers. There Are New Warning Signs for Republicans – Politico
• Trump Tariffs: Customs and Border Protection Tells Judge It Can't Comply With Refund Order – CNBC
• A $220 Million Ad Blitz and a Public Split With Trump Mark the End of Kristi Noem's DHS Tenure – Associated Press
• Trump Voucher Offers New Money for Public School Students, and Pressure for Democrats – Washington Post
• FDA Vaccines Chief Who Ran Afoul of Pharma to Depart – Politico
• U.S. Was Only Country in a Worldwide Survey to Say Most Fellow Citizens Are Bad People – Washington Post

Views and Analysis

• How Much Is the War With Iran Costing the US? – Anne Flaherty, ABC News
• Here's How Much the War With Iran Is Expected to Cost Every Day – Kaanita Iyer, CNN
• Democrats Seize on the Iran War's Enormous Daily Price Tag – Steve Benen, MS Now
• Massive War Price Tag Could Be a Massive Problem for GOP Leaders – Meredith Lee Hill, Politico
• War With Iran Is Turning the Energy Affordability Crisis Into a Calamity – James Baratta, American Prospect
• Americans' Relationship With Gas Prices Is Complicated – Justin Fox, Bloomberg
• 'Ugly': Trump's Job Market Shrinks as Oil Fears Mount – Sam Sutton, Politico
• Weak Jobs Data Underscores Fed's Dilemma as War Stokes Inflation Risk – Colby Smith, New York Times
• America Cannot Withstand the Economic Shock That's Coming – Gina Raimondo, New York Times
• Mass Hysteria. Thousands of Jobs Lost. Just How Bad Is It Going to Get? – Michael Steinberger, New York Times
• An Iranian Civil War Is Not in America's Interest – Fareed Zakaria, Washington Post
• 'MAGA Is Split': Trump's War in Iran Divides America First Loyalists – Nancy Cook and Joshua Green, Bloomberg