As U.S. and Israeli forces continue hammering Iranian targets for a second week, a prominent fiscal watchdog is sounding an alarm that has nothing to do with battlefield strategy: America’s soaring national debt may be its most dangerous vulnerability of all.
The Committee for a Responsible Federal Budget (CRFB), a nonpartisan Washington think tank, released a statement on Thursday warning that the ongoing military conflict with Iran has exposed the United States’ precarious fiscal position—and calling on Congress to act with unusual restraint if it moves to pass a war funding package.
“The conflict in Iran demonstrates why we need to keep our national debt at a reasonable level,” said Maya MacGuineas, president of the CRFB. “Without the fiscal space to respond to emergencies and other urgent needs, we are left vulnerable. How can we prioritize our national security when we’re spending more on interest payments than national defense?”
The warning comes as reports circulate that the White House may request as much as $50 billion in emergency defense funding to replenish weapons stocks drawn down by the strikes on Iran and as experts such as Penn Wharton’s Kent Smetters estimate a two-month war adding $65 billion onto the national debt. Some in Congress are already eyeing a sprawling package that would bundle in farm aid, disaster relief, and other initiatives—a move MacGuineas bluntly called a “Christmas Tree supplemental.”
The CRFB’s concerns are grounded in stark fiscal data. The U.S. national debt now stands at roughly 100% of GDP—the highest level since World War II—and the Congressional Budget Office projects it will balloon to 120% of GDP by 2036. Much of that trajectory was locked in last year when President Trump signed the One Big Beautiful Bill Act, which the CBO estimates will add $4.7 trillion to deficits through 2035. The legislation included more than $150 billion in defense-related spending through the reconciliation process—a figure the CRFB says may mean no supplemental war funding is actually necessary.
The CBO also projects the federal deficit will hit $1.9 trillion in fiscal year 2026, growing to $3.1 trillion by 2036, driven heavily by rising net interest costs. That dynamic—debt service consuming an ever-larger share of the budget—is precisely what MacGuineas warns makes wartime emergencies so financially treacherous.
The CRFB is not just calling for caution. This week, it released what it’s calling a “Break Glass Plan,” as in, break glass in case of emergency. It’s a pre-built framework for responding to an economic shock without blowing up the country’s fiscal foundation. The four-part plan calls for targeted near-term stimulus, a “Super PAYGO” rule requiring $2 in medium-term savings for every $1 of emergency spending, an automatic deficit reduction mechanism, and a bipartisan fiscal commission to enact longer-term structural reforms. The CRFB claims the plan could reduce deficits to 3% of GDP within four years and save an estimated $10.25 trillion over a decade.
“We may need such a plan sooner than any of us had hoped,” MacGuineas said.
The conflict with Iran, now in its second week, has killed more than 1,800 people, including eight U.S. service members, as U.S. Central Command reports striking over 1,700 targets across the country. Iran has retaliated with ballistic missile and drone attacks on U.S. bases and Gulf state infrastructure, while threatening to disrupt global oil flows through the Strait of Hormuz.
Against that backdrop, the CRFB’s message to lawmakers is direct: if more war funding is needed, pass only what is strictly necessary, offset the costs over time, and resist the temptation to load up the bill with unrelated spending. The nation’s debt load, the group argues, is no longer just a long-term policy problem—it’s an acute national security risk.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.
As U.S. and Israeli military operations against Iranian targets enter their second week, concerns about America’s escalating national debt are garnering attention, particularly from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal watchdog. The CRFB underscores that the conflicts with Iran make it evident that the country’s precarious fiscal situation risks undermining national security. Maya MacGuineas, the organization’s president, emphasizes the need for Congress to exercise fiscal restraint in any war funding legislation.
MacGuineas pointed out that the ongoing conflict has revealed critical vulnerabilities, stating, « Without the fiscal space to respond to emergencies and other urgent needs, we are left vulnerable. » This financial precariousness is underscored by the warning that the U.S. is spending more on interest payments than on national defense.
Speculation suggests that the White House may soon request around $50 billion in emergency defense spending to replenish military stocks depleted by the ongoing strikes. In contrast, analysts like Kent Smetters from Penn Wharton estimate that a two-month conflict could add approximately $65 billion to the national debt. Some members of Congress are proposing combining the war funding with various other aids, a move MacGuineas has criticized as a « Christmas Tree supplemental. »
The CRFB highlights stark figures about the national debt, which currently stands at about 100% of GDP — the highest since World War II. The Congressional Budget Office (CBO) projects this figure to rise to 120% of GDP by 2036. Much of this trajectory was set in motion by the Trump administration’s “One Big Beautiful Bill Act,” estimated to add $4.7 trillion to the deficit by 2035. The Act included over $150 billion in defense spending, leading the CRFB to argue that additional war funding may not even be necessary.
The CBO forecasts a federal deficit of $1.9 trillion for the 2026 fiscal year, expected to increase to $3.1 trillion by 2036, largely due to rising interest costs. MacGuineas warns that as debt service continues to consume a growing portion of the budget, this makes managing wartime finances increasingly treacherous.
In response to these concerns, the CRFB has proposed a « Break Glass Plan, » aimed at establishing a framework to manage economic shocks without exacerbating fiscal instability. The plan includes several strategies: targeted short-term stimulus, a “Super PAYGO” rule requiring $2 in savings for every $1 spent on emergencies, an automatic deficit reduction mechanism, and the establishment of a bipartisan commission to lead long-term reforms. The CRFB claims these measures could effectively reduce deficits to 3% of GDP within four years and save around $10.25 trillion over the next decade.
MacGuineas has expressed urgency, stating, « We may need such a plan sooner than any of us had hoped. »
As the conflict with Iran continues, over 1,800 fatalities have been reported, including eight U.S. service members. The U.S. Central Command has claimed to have targeted over 1,700 sites across Iran, while Iran has retaliated with missile and drone strikes against U.S. facilities and threats to disrupt oil supplies through the Strait of Hormuz.
Amid this volatile environment, the CRFB urges lawmakers to restrict new war funding to what is strictly essential, to offset these costs over time, and to avoid including unrelated expenditures. The organization contends that the national debt has moved beyond being a long-term policy issue; it has become a pressing national security threat.
