The US military is facing a severe financial crisis, with the US Navy reportedly transferring funds from its payroll and other accounts to cover the costs of combat in the war on Iran. This information comes from documents obtained by the Guardian, as well as interviews with navy officials, contractors, and defense analysts.
The US-Israeli operation has depleted US munitions stockpiles and led to retaliatory Iranian strikes that have damaged strategic bases across the Middle East, placing pressure on military budgets. A Pentagon memo seen by the Guardian warns of "shortfalls in payroll" accounts due to their use for combat operations.
Experts and former officials indicate that accounts are running dry. Harlan Ullman, a retired naval officer, stated, "The piggy bank is broken." Non-emergency maintenance on shore-based facilities has reportedly been deferred due to the cash shortage.
The White House requested emergency funding from Congress for the war efforts, but the prospects for approval are described as dim due to the war's unpopularity. The navy's budget for 2026 is almost $300 billion, with funds allocated for various requirements, and legal limits exist on how money can be reallocated between these batches.
In a July 21 hearing, Senator Susan Collins noted that some military services face "near-term solvency challenges," with a staffer indicating the navy was among those referred to. A navy spokesperson stated that maintenance and operations funds have not been depleted and that the department is actively managing resources to meet pay obligations.