Donald Trump’s war on Iran has pushed the US military into a severe financial crisis, with the US Navy forced to transfer money from payroll and other accounts to cover combat costs, according to documents obtained by the Guardian and interviews with navy officials, contractors, and defense analysts.

The US-Israeli operation has depleted US munitions stockpiles and triggered retaliatory Iranian strikes that damaged strategic bases across the Middle East, increasing budgetary pressures across the military.

A Pentagon memo reviewed by the Guardian warned of “shortfalls in payroll” accounts due to the Navy “raiding” them to fund combat operations. Experts and former officials say these accounts are running dry. Retired naval officer Harlan Ullman said, “The piggy bank is broken.” Ullman, a member of the National Commission for the Future of the Navy, clarified he was not speaking on the commission’s behalf.

One official and a navy contractor reported that non-emergency maintenance on shore-based facilities has been deferred because of the cash crunch.

The war, which began on 28 February, quickly strained existing military budgets, especially the Navy’s, which launched initial attacks and later managed an extensive naval blockade.

During a Senate appropriations committee hearing on 21 July, Senator Susan Collins stated, “I’m told some military services face near-term solvency challenges,” with a staffer confirming the Navy was among those services.

In response, a Navy spokesperson said maintenance and operations funds have not been depleted and that the Department of the Navy is actively managing resources to meet current pay obligations on time.

In mid-May, Admiral Daryl Caudle, chief of naval operations, warned Congress that the budget crunch would become critical by July, noting, “The FY ’26 budget didn’t bake in Epic Fury. I do fear that I’ll have to start making decisions in the July timeframe on how I do force generation.”