The cost of President Trump’s Iran war is enormous and continues to grow. Reports indicate that during a private meeting with congressional members on Tuesday, Pentagon officials estimated the conflict’s expenses surpassed $11.3 billion in its first six days. Notably, these numbers don’t account for pre-strike costs like deployed hardware and personnel.
Kent Smetters, faculty director of the Penn Wharton Budget Model, predicts the daily cost is now around $800 million. Other assessments—including one from John Phillips, a British safety, security, and risk consultant—put the daily expense at $1 billion. Smetters told that if the conflict lasts two months total (or seven more weeks), it will add $65 billion in net new costs for U.S. taxpayers.
These figures emerge against a backdrop of deteriorating U.S. finances, driven by skyrocketing national debt and growing interest obligations. In its February 11 report, the Congressional Budget Office (CBO) projected a $1.853 billion gap between spending and revenue for Fiscal Year 2026. This gap arises because the U.S. spends 33% more than the Treasury brings in via taxes. A 60-day Iran war would push the deficit up by $65 billion plus $1.4 billion in interest—totaling about $66.4 billion. This 3.6% increase would lift the deficit’s share of GDP from the projected 5.8% to 6.0%. The $66.4 billion would be added to the deficit, increasing the amount the U.S. must borrow (plus interest) each subsequent year.
However, the war’s impact shouldn’t be considered in isolation. Just days before the initial attack, the U.S. Supreme Court (SCOTUS) also hurt the budget by invalidating Trump’s tariffs. The Committee for a Responsible Federal Budget estimates that if Trump replaces the former border tariffs with a 10% across-the-board rate, the U.S. will collect $74 billion less this year than under the prior system. Combining that $74 billion loss with the $65 billion in war spending nearly doubles the budget damage to $139 billion, boosting the CBO’s projected deficit by 7.5%. It’s important to note that tariff losses aren’t mostly a one-time cost like war spending. If the reduction in Trump-era import duties becomes permanent, it would mean a recurring, structural annual increase in deficits.
Without a plan to reopen the Strait of Hormuz, KPMG chief economist Diane Swonk fears the conflict could last up to six additional months, driving oil prices above $130 per barrel. Some analysts believe prices could reach $200. Even if the campaign extends only a few more weeks, the harm to America’s vulnerable financial situation will be significant.