How Will Congress Fund a $300 Billion War With Iran?

Whatever you think of the war in Iran, there’s a separate question—independent of the military merits—that Congress must answer: How will it be paid for?

The Pentagon has requested $200 billion to fund the campaign. While circumstances could change the price tag, interest payments on that much debt would add $87 billion over 10 years. So that’s roughly $300 billion.

Defense Secretary Pete Hegseth, asked about this number, offered a memorable contribution to the fiscal debate: “Obviously, it takes money to kill bad guys.” That’s true. It’s also true that the money must come from somewhere.

And with total U.S. government debt now at $39 trillion (up from $36.5 trillion in January 2025) and cumulative budget deficits totaling $25 trillion over 10 years, that somewhere can’t be Uncle Sam’s credit card. Congress must offset the spending with budget reductions elsewhere, regardless of which of two main funding options it chooses.

The first option is to include the war spending in a supplemental appropriations bill. That’s a standalone spending measure outside the normal annual budget process, traditionally used to fund urgent and unforeseen needs like wars and disasters. Supplemental bills require 60 Senate votes to overcome a filibuster, meaning they need bipartisan support.

The second option is a budget reconciliation bill—the same fast-track process used to pass last year’s One Big Beautiful Bill. Reconciliation allows legislation to pass the Senate with a simple majority, but it comes with strict rules: It can only be used for provisions that directly affect federal spending, revenues, or the debt limit, and the Senate Parliamentarian can strike provisions that don’t meet these tests.

Congress used to offset its emergency spending. It doesn’t anymore. Research by Dominik Lett at the Cato Institute shows that since 1991, Congress has passed $12.5 trillion in emergency spending for wars, disasters, pandemics, financial crises, and in some cases things that were emergencies in name only, like $450 million for space exploration. Almost none of it was offset. If you add $2.5 trillion in interest to the spending, the total amounts to one-third of today’s debt.

Democrats are quick to note that the same Republican majority that voted for cuts to the growth of Medicaid and food-assistance spending (on the grounds that the country simply can’t afford them) is now being asked to approve $200 billion in war spending with no offsetting savings in sight. I’m sure the Democrats think they have a real “gotcha” moment on their hands. They don’t. Providing for the national defense is an explicit constitutional obligation of the federal government in a way that Medicaid is not.

This distinction matters, but the argument has its limits. First, even constitutionally acceptable spending must be paid for. The fiscal argument for offsetting a war’s costs doesn’t rest on one’s view of Medicaid, but on the knowledge that we’re inching toward the point where investors could be reluctant to lend the government money at preferential rates because they have lost confidence in Washington’s ability to repay them without resorting to inflation. It is also the right thing to do for future generations who will face higher inflation or taxes.

Second, offsetting the war spending creates necessary discipline that pure borrowing does not. When Congress must find $300 billion in cuts, it’s forced to ask whether every one of those dollars is actually necessary (or is actual war spending). Such discipline, I hope, will strip out the farm bailouts, the special-interest provisions, and the other nonemergency items that always creep into these spending bills precisely because no one is checking everything that gets through when it’s labeled “emergency” or “national security.”

Offsetting $300 billion may sound daunting, but it’s worth some perspective. The government will spend at least $94 trillion over the next decade. The extra cost of the Iran campaign amounts to three-tenths of 1 percent of that total. Start by targeting the taxpayer cash being stolen outright through fraud, such as by autism-therapy providers in Indiana recently exposed for billing $340,000 per child per year. That’s imperative, but the bigger opportunity lies in reforming health programs that consume an ever-growing share of the budget while delivering their greatest benefits not to patients but to hospitals, insurers, and states.

In the end, the $300 billion question isn’t really about Iran. It’s about whether Congress will admit that nothing the federal government does is free, and that the bill always comes due. The only choice is who pays for it and when.

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