The US defence is said to be reeling under an acute financial crisis due to a shortage of funds to fuel the military operation against Iran in the Middle East, as the war has depleted US munitions, while Iranian strikes on US strategic bases across the Middle East have added to the pressure, prompting the US Navy to transfer money from its payroll and other sources to cover the costs of combat, The Guardian report claimed.
According to the report, The Guardian authored the report based on documents obtained by it and interviews with Navy officials, contractors and defence analysts, stating that the war, which began on 28 February under the Trump administration, caused a major financial crunch in military spending.
The US Navy is said to be one that bears the most impact of the war because of its active role in the opening attacks and its being later tasked with an extensive naval blockade, and is reportedly struggling to meet several financial commitments. The waning popularity of the war has put the White House's request for emergency funding from Congress in jeopardy.
A Pentagon memorandum on Navy funding warned of “shortfalls in payroll” accounts, reportedly incurred due to the diversion of money to fund the war in the Middle East, with the situation described by officials and former military personnel as grim.
A Navy official familiar with the financial arrangements said money allocated for payroll had been shifted to meet Middle East operational requirements and was being replaced with funds from other accounts that had not yet been spent, so as to ensure the force on overseas duty received its salaries.
The impact of the financial strain was such that, as described by a Navy contractor and official, it forced the US Navy to postpone some non-emergency maintenance at shore-based facilities.
Defence Secretary Pete Hegseth told Congress in July that the war had already cost $35.7 billion and warned that the military faced “critical shortfalls”, though it is unclear whether that figure represents the full cost of the conflict.
The administration has sought $67 billion in emergency defence funding from Congress; however, no specific amount was noted to be allocated to the Navy, while Congress has separately considered major defence spending measures that include funds for the war in Iran.
Defence analyst Todd Harrison said the financial difficulties were known within the service but were not being discussed publicly, suggesting that political considerations may be influencing the Pentagon's reluctance to highlight the impact on future military readiness.