The House passed a stopgap spending bill this week to avert a government shutdown, but the measure does little to relieve the Pentagon’s mounting financial strain six months into the Iran war — or the pressure facing Defense Secretary Pete Hegseth.
While the continuing resolution keeps the government funded into early December largely at existing spending levels, it 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 other 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.
“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,” said a senior administration official — one of several current or former officials who spoke on the condition of anonymity to discuss private conversations.
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President Donald Trump on Tuesday said the U.S. had launched strikes on Iranian targets near the Strait of Hormuz that drew retaliatory strikes hours later, despite Trump’s warning that a larger attack was “waiting in the wings” if they occurred.
The renewed fighting puts additional strain on the Pentagon’s already-complicated funding picture. The administration’s $1.5 trillion funding requests follow three tracks, with $1.15 trillion moving 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 built into this year’s budget.
The House moved part of that strategy forward in July by advancing a $95 billion reconciliation package aimed largely at those Iran war costs, but the measure is stuck because it lacks the votes to pass the Senate. House Republicans are pushing the Senate, when it returns Sept. 14, to take it up and pass it.
The Defense Department has made trade-offs within its operations and maintenance accounts, deferring maintenance and some troops training, and it’s feeling pressure because of higher-than-expected personnel costs, according to lawmakers and former defense officials.
“They don’t have enough money; let’s face it, the conflict costs money,” said Rep. Ken Calvert (R-California), the chair of the House Defense Appropriations Subcommittee. “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 pressure is particularly acute for the Navy, which has extended ship deployments and carries a large share of the combat burden in the Middle East. Adm. Daryl Caudle, the chief of naval operations, told reporters last week the Navy was facing a shortfall of $6 billion to $8 billion just to cover Iran war costs. He also noted that “record reenlistments” are straining military personnel accounts.
“The message for me to Congress is ‘I need my money,’ and all that’s tied to building a stronger Navy,” Caudle said.
Several U.S. military leaders have advised Hegseth that prolonging large-scale operations against Iran is unsustainable and risks weakening their ability to confront threats elsewhere, The Washington Post reported. The warnings came in response to orders that some troops deployed to the Middle East remain through September and some others stay into 2027.
The Pentagon on Wednesday rejected the suggestion that the funding and leadership strains were hindering the department.
Chief Pentagon spokesperson Sean Parnell said “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 American Enterprise Institute estimate. Officials acknowledge replacing those missiles is expected to take years and require funding Congress has not yet provided.
The Pentagon has asked lawmakers for permission to reshuffle $4.3 billion in funding already appropriated for 2026. Most of it — $3.76 billion — would go toward military personnel costs, with the Pentagon taking millions from shipbuilding, aircraft procurement and research and development to cover those bills.
The administration’s request comes as lawmakers are questioning Hegseth’s intervention in the military’s senior ranks — a factor that fueled Driscoll’s departure. Driscoll was particularly frustrated with the ouster of Gen. Randy George, the Army chief of staff. He was among the half-dozen senior officers Hegseth has reportedly pushed out, thinning the service’s top ranks.
Rep. Don Bacon (R-Nebraska), a former Air Force general, said Tuesday he shared Driscoll’s frustration and was “disappointed with all the firings of the generals and admirals,” calling it “one of the big negatives” with Hegseth.
“The secretary has maybe a constitutional right to do this, but that doesn’t make it morally right, or wise,” Bacon said. “This has been a problem for all the services right now. We’ve lost service chiefs, joint commanders, like Cyber Command, and it’s not been healthy.”
Rep. Mike Rogers (R-Alabama) said he was “tired of all the churn.” “I want to see some stability,” he added.
Current and former officials said the effect is increasingly visible below the top ranks where acting leaders are left to manage major decisions without knowing how long they or their superiors will remain in place.
That uncertainty, and the increasing lawmaker frustration surrounding it, has created additional tension between the Pentagon and Congress that is making it harder to solve the Defense Department’s growing budget shortfall.
Sen. Mike Rounds (R-South Dakota) said the administration “was incorrect” to assume it could achieve a defense increase through the partisan reconciliation process rather than building bipartisan support from the outset.
“It needs to be both Republicans and Democrats at the table because they [lawmakers] have to be accountable, but they also have to be informed,” Rounds said. “And I think the administration needs to change its focus, and they need to bring this back to a bipartisan effort with regard to the defense of the country.”
In the meantime, Trump administration officials have already moved money between accounts in unorthodox ways. The Navy was forced to transfer money from its payroll and other sources to cover the costs of combat,The Guardian reported last week.
During last October’s government shutdown, the Pentagon tapped $8 billion in research and development funding buckets to pay troops, a move that raised legal questions at the time.
“It showed that they were willing to push the limits on those norms, and they got away with that,” said Todd Harrison, an American Enterprise Institute defense budget expert.
With both chambers of Congress in Washington for only three weeks in September before the midterm elections in November, Harrison saw a “narrow window” for reconciliation between the election and the new Congress in January. Any regular budget bills would need 60 votes to overcome a filibuster in the Senate, which Harrison doesn’t expect to happen until at least the new Congress.
One scenario, Harrison said, is that Democrats retake one or both chambers in November, spurring Republicans to package Iran and the regular defense budget in a massive, single reconciliation package they could attempt to ram through before the new Congress is seated.
“The election could completely reshape the art of the possible,” Harrison said.
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