Iran War Causing ‘Shortfalls’ in Navy Payroll Six Months Into Conflict: Report

The United States’ war with Iran has caused “shortfalls in payroll” in the Navy, according to a report.

The Navy has transferred money from its payroll and other sources to cover the cost of the ongoing contract, The Guardian reported Friday, citing documents and interviews with sources. It comes as the war, which began on Feb. 28, reached its six-month mark and shows no signs of de-escalating.

“The Department of the Navy is actively managing its resources to meet current pay obligations on time,” a Navy spokesperson told The Guardian. “We continue to work closely with Congress to address ongoing operational demands and sustain our personnel and readiness throughout the fiscal year.”

The publication said that one Department of Defense (DOD) memo alluded to “shortfalls in payroll” in Navy funding because the department had been “raiding” them to fund the war.

It added that one official and one navy contractor, both unnamed, said officials had deferred non-emergency maintenance and shore-based facilities because of financial concerns.

As the military operation continues overseas, the costs associated with the campaign mounting will continue to draw scrutiny from lawmakers and create concerns about its financial sustainability.

Military.com reached out to the Navy for comment.

Rising Cost of Iran War

It comes amid rising concerns about the cost of the conflict.

In July, Defense Secretary Pete Hegseth told Senate Appropriations Committee lawmakers that not fully funding the Department of Defense (DOD) to the tune of $1.5 trillion is the “greatest threat” the United States faces at home and abroad.

The administration has requested a $1.5 trillion defense budget from Congress, which includes a specific request for roughly $70 billion more to fund ongoing operations and naval blockades in the Middle East.

The Navy has a budget of almost $300 billion for 2026, separated into different batches including personnel, shipbuilding and weapons procurement.

War With Iran Endures

U.S. Treasury Secretary Scott Bessent earlier this week announced an “economic D-Day” against Iran, aiming to financially squeeze Iran amid already levied sanctions.

The goal, Bessent said, is to force the regime to come to the negotiating table and make concessions.

The new round of sanctions is also a warning shot towards every country that does business with the Islamic Republic, which could lead to retaliatory measures like the United States severing financial ties. As a result, Iran’s currency hit a record low on Monday.

The DOD announced last week that more than 750 Americans have been wounded in the war.