The House passed a stopgap spending bill this week to avert a government shutdown, but the measure does little to relieve the Pentagon’s financial strain six months into the Iran war, or the pressure facing Defense Secretary Pete Hegseth. The continuing resolution keeps the government funded into early December largely at existing spending levels, but does not provide the tens of billions of dollars the Pentagon says it needs to cover Iran operations, replenish munitions, and sustain forces whose deployments have been extended.
The fiscal squeeze comes as Hegseth faces problems on several fronts: Senior military leaders are warning that prolonged Middle East operations are eroding readiness elsewhere, and Army Secretary Dan Driscoll is leaving after months of friction with the defense secretary. A senior administration official stated, "We’re seeing a lot of pressure applied to that office from a number of different directions, and on top of it is the budget," speaking on the condition of anonymity to discuss private conversations.
President Donald Trump on Tuesday stated that the U.S. had launched strikes on Iranian targets near the Strait of Hormuz, which drew retaliatory strikes hours later, despite Trump’s warning that a larger attack was "waiting in the wings" if they occurred. The renewed fighting adds strain to the Pentagon’s funding situation. The administration’s $1.5 trillion funding requests follow three tracks: $1.15 trillion through the regular appropriations process, $350 billion through the Republican-only reconciliation process, and a separate $67.1 billion Iran supplemental to cover war costs not included in this year’s budget.
The House advanced a $95 billion reconciliation package aimed largely at Iran war costs in July, but the measure is currently stalled due to a lack of Senate votes. House Republicans are urging the Senate to take it up when it returns on September 14. The Defense Department has made trade-offs within its operations and maintenance accounts, deferring maintenance and some troop training, and is feeling pressure due to higher-than-expected personnel costs, according to lawmakers and former defense officials.
Rep. Ken Calvert (R-California), chair of the House Defense Appropriations Subcommittee, remarked, "They don’t have enough money; let’s face it, the conflict costs money. We got to pay personnel, and you can’t neglect the O&M accounts as much as we are, because that ends up costing us even more. The ships are being deployed longer than they should be, and so that costs more money when they get into maintenance."
The USS Abraham Lincoln arrived at a port in Thailand this week after more than 250 days at sea during its extended deployment. The Navy is facing a shortfall of $6 billion to $8 billion just to cover Iran war costs, according to Adm. Daryl Caudle, the chief of naval operations. He stated, "The message for me to Congress is ‘I need my money,’ and all that’s tied to building a stronger Navy."
Several U.S. military leaders have advised Hegseth that prolonged large-scale operations against Iran are unsustainable and risk weakening their ability to confront threats elsewhere, as reported by The Washington Post. The warnings came in response to orders for some troops deployed to the Middle East to remain through September and others to stay into 2027.
The Pentagon on Wednesday rejected the suggestion that funding and leadership strains were hindering the department. Chief Pentagon spokesperson Sean Parnell stated, "Every leader across the Pentagon is working as a cohesive unit" and that U.S. troops "have everything they need," adding that the department had submitted its fiscal 2026 supplemental request and was awaiting congressional action.
Operation Epic Fury has so far cost the Pentagon more than $42 billion, led by $15 billion for missile interceptors and $10 billion for the U.S. targeting campaign, according to a recent estimate from the American Enterprise Institute. Officials acknowledge that replacing those missiles is expected to take years and require funding that Congress has not yet provided.
The Pentagon has requested lawmakers' permission to reshuffle $4.3 billion in funding already appropriated for 2026, with most of it — $3.76 billion — allocated for military personnel costs. The Pentagon plans to take millions from shipbuilding, aircraft procurement, and research and development to cover these bills. The administration’s request comes as lawmakers question Hegseth’s intervention in the military’s senior ranks, which contributed to Driscoll’s departure. Driscoll was particularly frustrated with the ouster of Gen. Randy George, the Army chief of staff, among others. Rep. Don Bacon (R-Nebraska), a former Air Force general, expressed disappointment with the firings of senior military leaders, stating, "The secretary has maybe a constitutional right to do this, but that doesn’t make it morally right, or wise."