This is an adapted excerpt from the July 21 episode of “All In with Chris Hayes.”
President Donald Trump’s war with Iran has been disastrous since the beginning, but it is now reaching a much more dangerous phase. On Tuesday, we learned something truly shocking — something that you almost never hear: The Pentagon is running out of money.
Yes, the best-funded military in the history of human civilization is almost broke.
Remember, Congress funds the Defense Department at increasingly higher levels every year, reaching nearly a trillion dollars in 2025. It is the agency with the largest discretionary spending by far; nothing really comes close.
We are running out of petroleum reserves, we are running out of interceptors and the Defense Department is running out of money.
Think of it this way: The U.S. military running out of money is as improbable as, say, losing money when you run a casino; it just should not be possible. But somehow, the guy who failed at running a casino, Trump, and the strategic geniuses he chose to lead our national defense have brought us to this point.
And things are looking dire everywhere. Our strategic petroleum reserves — basically our emergency stockpiles of crude oil — are at the lowest level since 1983, in part because the Trump administration began releasing reserves in an attempt to blunt the cost spike brought about by the war’s supply disruptions.
Our stockpile of missile interceptors is so low that they cannot stop incoming Iranian ballistic missiles that are killing and injuring American troops. According to Al Jazeera, the United States held about 2,300 Patriot missile interceptors in stock before the war, but as many as 1,400 have been used (in a war we did not need to start). That is about half of the entire stockpile.
That’s just one type of missile. Stockpiles are low all around, and as Al Jazeera reported, “Replenishing high-capability and costly weapons like the ones the U.S. has used in Iran will likely take several years.”
So, we are running out of petroleum reserves, we are running out of interceptors and the Defense Department is running out of money. And now, to bridge the gap until the 2027 fiscal year begins in October, the agency is already moving money around.
“Military exercises and trainings that help keep units prepared for combat are being limited or canceled,” four current and former officials told The Washington Post, adding that “the budget for equipment and facility and maintenance is also being drained to cover the shortfalls.”
Remember, this is happening as Trump restarted the war, and as things continue to escalate.
On Saturday, Iranian state media reported that the U.S. hit critical infrastructure, including an electricity and water desalination plant and tunnels and bridges. The attack impacted the water supply for about 10,000 people. (The U.S. has denied attacking civilian infrastructure in Iran.)
Over in Kuwait, the government said that Iran also struck its power and water desalination plant, leading their energy minister to urge people to ration power during peak hours. On Tuesday, Iran attacked a tanker in the Strait of Hormuz, forcing the crew to abandon ship. It was at least the third attack on a ship in the last two days.
Meanwhile, there is a new front in the war. The Houthi rebels in Yemen declared they would blockade the Bab el-Mandeb Strait in the Red Sea to choke off Saudi Arabia-linked shipping. At least two tankers full of Saudi crude oil bound for China and India were forced to turn around and head north for the Suez Canal, according to reports.
So, as the war expands, Defense Secretary Pete Hegseth, a former Fox News host, made an appearance on Capitol Hill on Tuesday. For nearly three hours, Hegseth spouted testimony full of empty boasts and lies about how the U.S. is winning this war, all while trying to pry billions of dollars more for those empty coffers.
Allison Detzel contributed.
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