War Costs Make Up a Third of the $87.6 Billion Supplemental Request

Funding for the Defense Department

The supplemental requests $67.1 billion for the DOD. The transmittal letter notes that the request includes “military personnel and readiness expenses, operational costs to rebuild stocks expended by DOW, classified programs, and other key expenses” incurred during Operation Epic Fury. Russ Vought, the Office of Management and Budget director, told Congress on June 30 that the Iran war has cost about $30 billion—about half the funds requested for the DOD. Implicitly, the rest is not directly tied to the Iran war.

There are 10 line items listed for the DOD, but they lack the detailed explanations that are provided for other departments. Allocating these items to the three categories, therefore, involves some guesswork. A more accurate accounting will be possible when the White House publishes appropriation details and justification documents. Several items in the DOD request (munitions, operational costs, cybersecurity and autonomy, and classified programs) are too broad to fit entirely within a single category and are therefore allocated across several categories.

CSIS allocated the DOD’s 10 line items between Iran war costs and other national security costs based on previous war supplemental requests and so that the DOD’s total war cost matched Vought’s $30 billion. They are listed below in the order they were presented in the transmittal letter.

1. $1.7 billion for readiness: The DOD incurred costs to mobilize and deploy units to the Middle East.
2. $17.3 billion for operational costs: This presumably encompasses costs to operate units at a higher tempo and to replace aircraft and equipment losses. Some of the requested funds may cover costs from Operation Southern Spear and Absolute Resolve—war costs but for different wars.
3. $0.8 billion for National Guard support: National Guard units have deployed for the Iran war. Since this item may also cover the cost of National Guard deployments to the Southwest border or S. cities, half was attributed to the war.
4. $1.5 billion for fuel costs: This reflects higher DOD fuel costs due to war-related global energy disruptions.
5. $1.2 billion for administration priorities: No details are offered here, and these are presumed to be unrelated to the war.
6. $21 billion for munitions: Munitions procurement is a priority for the administration. Operation Epic Fury has exacerbated an existing inventory shortfall. The amount appears to not represent a 1:1 replacement of all expenditures. CSIS estimates $7.6 billion to be for war use. The request may prioritize needs in other theaters, such as the Pacific, or investments in the 14 “critical munitions” identified by the Munitions Acceleration Council. Some munition expenditures thus will have to be covered by the base budget or the reconciliation—the other two mechanisms the administration plans to use to fund the DOD in FY 2027.
7. $5.1 billion for cybersecurity and autonomy: While this amount is far larger than what was likely driven by the war, there may have been some wartime costs associated with offensive and defensive operations. Thus, $0.5 billion is assumed to be for wartime costs. The remainder likely funds the development of future capabilities.
8. $2.4 billion for drones: This is not described as funding replacements for the 25 MQ-9 drones lost during the war. Instead, it appears to fund future drone capabilities, adding to the amount requested in the reconciliation bill. “Drone dominance” is a stated priority for the DOD.
9. $4 billion for airborne moving target indication and space data network backbone: This funds development programs the DOD believes the U.S. military will need in the future.
10. $12.1 billion for other classified programs: Details are lacking. As with cybersecurity, the amount is far larger than would be driven by wartime operations. Thus, $1 billion is assumed to be for war-related activities in the intelligence community, with the rest going toward classified acquisition programs and intelligence community activities not directly related to the war.

A major omission is the repair and rebuilding of damaged bases. Damage was extensive, with The Washington Post identifying 228 destroyed structures. The DOD is reviewing U.S. posture in the region and has stated that it may not rebuild all of the damaged bases, so this omission is defensible.

Funding for Other Departments

Eight other agencies would receive funds in the supplemental request.

Figure 1 shows this categorization graphically for easier comparison.

Below is an agency-by-agency analysis and explanation for allocating items to the three categories: war costs, nonwar national security activities, and unrelated activities.

• Agriculture, $11,100 million total: Funding for the Department of Agriculture is the second largest request in the supplemental, after the DOD. It provides support for “row and specialty crops” and “damages from winter storms”—activities unrelated to the Iran war or national security.
• State, $3,361 million total: $400 million funds embassy repairs and U.S. citizen support for evacuation due to the Iran war, and $1.5 billion supports security improvements for U.S. diplomatic presence around the world. The remainder funds Ebola response.
• Homeland Security, $2,044 million total: Most would go to the Coast Guard, which surged operations for port security and to replace Navy assets in the Western hemisphere. Some equipment purchases included in this funding may not be war related—for example, “legacy communications equipment” —but details are lacking. $13 million funds a “classified request” unrelated to the war.
• Labor, $1,000 million total: This funds nonmilitary pension plans and is unrelated to the war or national security.
• Transportation, $1,000 million total: A Trump administration proposal to renovate New York’s Penn Station would receive funding.
• Energy, $768 million total: All supports war-related activities: $672 million for the “complete and verifiable termination” of Iranian nuclear weapons program and $95.5 million for “classified activities related to the war.”
• General Services Administration, $600 million total: Funds are requested for the maintenance of government facilities, including elevator repair and heating and air-conditioning.
• Interior, $500 million total: This funds National Park repairs on the World War II Memorial and tidal basin seawall.
• Treasury, $36 million total: This “classified request” is described to be unrelated to the war.
   

Supplemental Versus CSIS War Cost Estimate

CSIS’s recent estimate, published on June 23, put the costs of the Iran war at approximately $40 billion, including $4.0–9.4 billion for repairing and rebuilding damaged bases. Analysis of the supplemental request puts the Office of Management and Budget estimate of war costs at $32.7 billion for the DOD and other federal agencies.

While the totals are comparable, there are inconsistencies in what is included, as shown in Table 4. The lack of detail in the DOD figures makes exact comparisons difficult.

Other estimates of war costs are far higher than any of these figures. An estimate of a trillion-dollar war assumed Operation Epic Fury would be far longer and more intense than it has been. Estimates in the hundreds of billions did not account for the decline in the daily cost of the war after the first few days. This was due to U.S. forces using cheaper, shorter-range strike munitions as the coalition achieved air superiority, as well as the large decline in Iranian launches that required fewer interceptors. A detailed discussion of the difference between the various estimates can be found here.

The Budget Battle Ahead

The supplemental will likely become part of the broader budget battle as Congress considers the FY 2027 budget government wide. However, the supplemental will receive additional attention as it will likely become a focus of opposition to the war.

The administration has sent a $4.3 billion reprogramming request to Congress that would move FY 2026 funds around. Most of the money would go to Army personnel and operations. It is likely driven by an increasing number of soldiers, which had been planned for FY 2027, and not the war. A forthcoming CSIS analysis will discuss these budget dynamics.

Meanwhile, as of July 13, the war continues. Iran has repeatedly attacked ships in the Strait of Hormuz, and the United States has responded with strikes. President Trump has declared the ceasefire to be “over” and that the United States should “finish the job.” The framework agreement signed on June 18 gives 60 days to hammer out a final deal, but the future of U.S.-Iran diplomacy is in doubt. A full return to major combat operations would incur more costs and require developing new estimates.

Mark F. Cancian (Colonel, U.S. Marine Corps Reserve, ret.) is a senior adviser with the Defense and Security Department at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Chris H. Park is a research associate for the Arleigh A. Burke Chair in Strategy at CSIS.