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US Iran War Causing 'Shortfalls' in Department of Defense, Navy and US Military Payroll

A Pentagon memo warns of payroll shortfalls as emergency funding is sought and non-emergency maintenance is deferred, officials and analysts said.

  • On Friday, reports emerged that the U.S. Navy is reallocating personnel payroll funds to finance President Donald Trump's ongoing war against Iran, with a Pentagon memo warning of shortfalls in payroll accounts.
  • The conflict with Iran reached its six-month mark on Friday, August 28, forcing the Pentagon to raid accounts originally earmarked for service members as the war became a costly battle over the Strait of Hormuz.
  • Retired naval officer Harlan Ullman stated, "The piggy bank is broken," while officials revealed imaginative workarounds to bridge funding gaps. The Navy is deferring non-emergency maintenance to manage rising blockade costs.
  • American Enterprise Institute analyst Todd Harrison suggested Pentagon officials avoid public discussion to mask political liabilities, noting they prioritize combat funding over future military readiness despite a Navy spokesperson dismissing payroll risks.
  • Defense Secretary Pete Hegseth estimated the war would cost at least $37.5 billion through September 30, while the administration requested $67.15 billion from Congress. Trump claims the U.S. maintains a blockade and is prepared to continue operations indefinitely.
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The United States Navy is facing a serious financial crisis due to the costs of the war with Iran and has had to reallocate money to pay salaries to finance military operations, according to documents obtained by The Guardian. The conflict would have cost $35.7 billion already, and experts warn that the funds are about to be exhausted.

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연합뉴스-Yonhap News Agency broke the news in Seoul, Korea (the Republic of) on Friday, August 28, 2026.
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