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CBO says Iran war driving up inflation, puts price tag at $38 billion

JUANA SUMMERS, HOST:

Two new independent reports are offering the most detailed looks yet at the cost of the war in Iran. The war has caused shortages in U.S. munitions, created bottlenecks in supply chains and generated a price tag that's already well over $30 billion. NPR national security correspondent Greg Myre is here with us now. Hey.

GREG MYRE, BYLINE: Hi, Juana.

SUMMERS: So, Greg, tell us who produced these reports, and what else can you tell us about the findings?

MYRE: So the Congressional Budget Office produced one, and the other is by the Pentagon's inspector general. And both of these are independent and nonpartisan. And, Juana, a couple of things jumped out at me. Both reports provided details on the extensive damage to U.S. bases and military equipment that the Pentagon has been very reluctant to talk about. The Pentagon inspector general report said, quote, "Iranian strikes damaged and destroyed hundreds of buildings and structures at U.S. bases," and then it listed eight separate countries in the region where this has happened. Also around 60 U.S. aircraft have been damaged or destroyed. About half of these are Reaper drones, which cost at least $30 million apiece - but a lot of manned aircraft as well, about a dozen refueling aircraft, several fighter planes. And we should remember, in past wars, the Pentagon held multiple briefings every week, and we might get this kind of information, but briefings have been extremely rare under Defense Secretary Pete Hegseth.

SUMMERS: Right. Well, Greg, what do these new reports say specifically about the cost of the war so far?

MYRE: Yeah, you know, they've actually been pretty similar to what we have been hearing. The Congressional Budget Office put the number at $38 billion so far. The Pentagon inspector general came up with more than $33 billion, and these sets of numbers bracket the figure of 37 billion that Hegseth gave back in July. So just a couple of caveats here. All three figures use slightly different cutoff dates, so they really do seem to be pretty much on the same page when you allow for that.

But they did not factor in the cost of rebuilding these damaged bases. And two expenditures really dominate. Weapons accounted for more than $20 billion of the spending, and then all those plane flights, transporting troops and material to the region and then carrying out thousands of airstrikes, that cost more than $10 billion, according to the Congressional Budget Office. Now, all the spending is already driving inflation for Americans and will continue to do so. The CBO predicts inflation will be about a half percentage point higher in the first part of next year than it would be without the war.

SUMMERS: And the Trump administration, what's the response been there?

MYRE: Yeah, the Pentagon hasn't said anything. Now, the president did go on Truth Social yesterday before these reports came out, and he said the U.S. was, quote, "producing more exquisite and elite weapons than at any time in our history." And, you know, Hegseth and military officials have said repeatedly they think they have all the resources they need. But both these reports said the U.S. was burning through certain weapons like Patriot interceptor missiles that the CBO says the military may have used up two-thirds of them, and they can't be replaced quickly. And the U.S. still has large stockpiles of many weapons, but the reports indicate the Iran war has strained some munitions, particularly these high-end defensive weapons.

SUMMERS: And, Greg, I do want to ask because you mentioned Hegseth. Today Republican Congressman Thomas Massie of Kentucky, he introduced an impeachment resolution against the defense secretary. What's your read on this?

MYRE: Yeah, you know, it's really symbolic and not substantive at this point. Massie alleged that Hegseth has waged the Iran war illegally because there was no authorization from Congress. And this was one of eight charges he levelled at Hegseth. But in practical terms, there's no sign this will go anywhere. Republicans control both houses. They have no desire to accuse Hegseth and the Trump administration of botching the war with an election on the way.

SUMMERS: NPR's Greg Myre, thanks as always.

MYRE: Sure thing, Juana. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Greg Myre is a national security correspondent with a focus on counter-terrorism.