One Number Ties It All Together: $38 Billion and a Nation in Crisis Mode
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A single figure released by the Congressional Budget Office this week landed at the center of nearly every major story in American politics: $38 billion spent on the Iran conflict so far, accounting for more than a third of this year's inflation increase, with weapons stockpiles the CBO describes as critically depleted. To put the scale in context, the entire annual budget of the Department of Education runs to roughly $80 billion — meaning the U.S. has spent nearly half that sum in a single military engagement.
The economic fallout is bleeding into every corner of American life, even as the Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75 to 4 percent — its first hike in three years — citing persistent inflation worsened by soaring oil prices. President Trump responded by publicly demanding 1 percent interest rates, opening a sharp public feud with his own central bank. S&P futures were trading around 7,685, up roughly 62 points, suggesting markets read the move as a signal that the Fed views inflation, not recession, as the primary threat.
On Capitol Hill, Treasury Secretary Bessent clashed with Democrats at a House committee hearing over responsibility for the inflation picture — the administration seeking credit for growth indicators while attributing price pressures to prior Fed accommodation and inherited spending. Democrats pointed to the CBO's Iran war figure as a concrete anchor for the argument that the administration's own policy choices are a significant driver. Representative Thomas Massie forced an impeachment vote on Defense Secretary Hegseth over the conflict's legal basis under the War Powers Resolution; the measure was tabled, but it placed every Republican on record ahead of the midterms.
Against that backdrop, Trump announced $138 million in new super PAC spending to defend GOP House and Senate majorities — a surge after months of criticism that MAGA Inc. was sitting on a $400 million war chest. With inflation data and war costs dominating headlines, the political landscape looks very different than it did six months ago.