Good evening. It looks like the Kennedy Center for the Performing Arts could be closed for a while. A federal judge ruled today that President Trump could not attach his name to the cultural center in the nation's capital, prompting the organization's board to close the facility for extensive renovations. "The closing will take place immediately," Trump said on his social media platform, adding that the renovations will not begin until a court "rules on the Board's approved name" - a name that includes his own.
Here's what we're watching in fiscal news.
Iran War Cost $38 Billion Through July: CBO
Combat operations during the war with Iran cost approximately $38 billion as of August 1, 2026, according to a new analysis from the Congressional Budget Office.
That estimate reflects the cost of munitions used in combat ($21.7 billion) and equipment lost in battle ($1.9 billion), as well as the cost of increased flying hours ($10.4 billion) and jet fuel ($2.7 billion). It does not, however, include activities that were budgeted before the war, such as basic operating costs for the U.S. military, nor does it include second-order effects, such as how the increase in fuel prices raises costs for the federal government. It also ignores the cost of rebuilding U.S. bases in the Middle East that were damaged by Iranian missile attacks.
Costs are continuing to rise, the CBO said, but the cost of ongoing operations depends on the level of violence. As a rough estimate, the CBO said operations during periods with relatively low levels of violence, as in May and June, cost about $2 billion per month. As violence escalates and the pace of operations picks up, as in July, the cost rises to about $3 billion per month.
The war with Iran also has broader economic costs, including higher interest rates and inflation. The CBO estimates that the inflation rate, as measured by the price index for personal consumption expenditures, will be 0.5 percentage points higher at the beginning of 2027 than projections indicated before the start of the war, due largely to higher energy prices.
The CBO noted that it developed its cost estimate using government databases and publicly available information, because the Department of Defense "did not respond to CBO's requests for information." As a result, the CBO analysis is "subject to considerable uncertainty." Nevertheless, the CBO's cost estimate comes close to the $37.5 billion estimate provided by Defense Secretary Pete Hegseth in congressional testimony in July.
Pentagon details damages: The Defense Department's inspector general released a report Monday that provides details on U.S. military losses in the Middle East, including damages inflicted by Iran on U.S. bases in the region, through June 30.
During that time, "Iranian strikes damaged and destroyed hundreds of buildings and structures at U.S. bases in Kuwait, Bahrain, Qatar, UAE, Saudi Arabia, Iraq, Oman, and Jordan," the report says. "In addition, dozens of U.S. aircraft were destroyed or damaged during [Operation Epic Fury]."
The report also says that the war has resulted in "strategic inventory shortfalls" for some types of munitions, and exposed "industrial base bottlenecks" that are slowing the resupply of munitions. The bottlenecks include the production of rocket motors, the availability of explosives and propellants, and a shortage of skilled labor.
In terms of overall cost, the report says the Pentagon's chief financial officer estimated that the war had cost $33.4 billion through mid-June.
Americans' Median Household Income Hit a Record High in 2025
Americans' median household income rose 2.6% to $87,460 last year, the Census Bureau said Tuesday. The total, which is adjusted for inflation, is the highest on record since the agency began tracking the income data in 1967.
It also marks a rise above pre-pandemic levels, topping the $85,320 recorded for 2019. Even so, years of relatively stagnant income growth and persistently higher inflation have eroded Americans' purchasing power and made affordability concerns a prime political issue. "Household income has risen 2.5% since 2019," Christopher Rugaber of the Associated Press notes. "Yet over the previous six-year period, from 2013 to 2019, a period of very low inflation and declining unemployment, it jumped 19%."
Median after-tax income rose by 3.1%, from $73,760 in 2024 to $76,060 in 2025.
The official poverty rate, meanwhile, fell 0.5 percentage points to 10.2%, while an alternative measure of the poverty rate that accounts for government programs, taxes and certain out-of-pocket expenses was 13.1%. Social Security remains the largest antipoverty program, as the Census Bureau says it moved 28.8 million people out of poverty in 2025, based on the alternative measure.
The Census report showed little change in income inequality, as the top 10% of households by income saw an average increase of 1.7% last year to just over $261,000, while the poorest 10% saw a 0.8% decline to just over $20,000.
Number of Uninsured Americans Held Steady Last Year
Nearly 27 million Americans, or 7.9% of the population, went without health insurance for all of 2025, the Census Bureau reported Tuesday. The number of uninsured - 26.7 million - changed little from 2024, but that does not fully reflect Republican changes enacted to Medicaid and the Affordable Care Act marketplace last year.
The GOP's One Big Beautiful Bill Act included sweeping changes to Medicaid that are projected to reduce future spending growth by tightening eligibility for the program. The Congressional Budget Office estimated earlier this year that new work requirements, more frequent eligibility checks and other changes in Republicans' 2025 law will have total average annual Medicaid enrollment fall to 74 million by 2034, a 13% reduction compared with the 85 million projected in June 2024. The biannual eligibility checks and new work requirements take effect at the end of this year and the beginning of 2027, respectively.
Congress also allowed enhanced Obamacare subsidies to expire at the end of 2025, raising the out-of-pocket cost of Affordable Care Act plans for millions of enrollees.
"Analysts expect to use the Census data released on Tuesday as a benchmark in the years ahead to measure the effects of the OBBBA on insurance coverage," Gabrielle M. Etzel writes at the Washington Examiner.
Where Americans get their insurance: Employment-based health insurance remains the most common for Americans, covering 53.5% of the population for at least part of 2025, the Census Bureau said. Medicare (20.1%), Medicaid (17.1%) and direct-purchase coverage (10.5%) were next most common. In all, 35.8% of individuals were covered by public health insurance last year, about the same as in 2024, as Medicare coverage increased by 0.6 percentage points while Medicaid coverage decreased by 0.5 percentage points.
Quote of the Day
"The data is clear. He's added accelerant to the fire. He's had the exact opposite impact that he wanted."
− Tim Mahedy, CEO of Access/Macro and a former official at both the Federal Reserve Bank of San Francisco and the International Monetary Fund, as quoted in a CNN article detailing the failure of Treasury Secretary Scott Bessent's efforts to drive down interest rates on longer-term U.S. government bonds. The yield, or interest rate, on the benchmark 10-year Treasury hit a 19-year high of 5.04% on Tuesday before dropping back to 5%.
Other analysts argue that Bessent's intervention in the bond market has had no impact, but that investors remain wary of the rise in crude oil prices and other factors. Either way, the bond market has demonstrated that Bessent has less sway than he suggested recently when he said, "I am the house now," and dared investors to bet against him.
"Bond yields are higher now than before Bessent intervened," CNN's Matt Egan writes, adding that it's "an increase that will make it more expensive for consumers to get a mortgage, mom-and-pop shops to get a small business loan and for Washington to borrow"
Fiscal News Roundup
- Iran War Has Cost the US More Than $38 Billion, Budget Office Says – Associated Press
- CBO Warns the Iran War Is Driving Up Inflation – Washington Sun
- 10-Year Treasury Yield Hits Highest Level Since 2007 as Traders Bet a Fed Rate Hike Is Coming – CNBC
- Democrats Favored Over Republicans on Health Care, Immigration, Economy: Survey – The Hill
- American Incomes Finally Top Pre-Pandemic Levels, Fighting Against Inflation All the Way – Associated Press
- Median US Income Rises to Highest on Record Even as Americans Feel Affordability Pinch – CNN
- Family Income Rose and Poverty Fell in 2025 - but Safety Net Cuts Could Erase Gains – NPR
- Health Insurance Coverage Steady in 2025 Despite Democrat Fears Over GOP Reforms – Washington Examiner
- US Strips Millions in Military Aid From Europe and Mideast to Back Trump-Aligned Nations in Americas – Associated Press
- US Military Confirms It Has Deployed Weapons in Space – CNN
- Hollywood Presses Congress on Trump-Backed Film Tax Incentive – Politico
- Foreign Companies Have Netted Millions in Tariff Refunds. Taxpayers Foot Part of the Bill – Talking Points Memo
- Trump Slams the Supreme Court for Rejecting His Push to Restrict Mail Ballots – Associated Press
- Trump Says Kennedy Center Is Closed Hours After a Judge Ruled He Can't Put His Name on It – Politico
Views and Analysis
- The National Debt Never Scared Me. It Scares Me – Jared Bernstein, New York Times
- The Time Scott Bessent Tried to Outsmart the Bond Market – Matt Egan, CNN
- The Rationale for Raising Rates Is Crystal Clear – Bill Dudley, Bloomberg
- The Fed Meeting Is a Pivotal Moment for the Bond Market – John Towfighi, CNN
- The US-Canada Rupture Is a Lesson in Declining Leadership – Gautam Mukunda, Bloomberg
- If You Thought Immigration Policy Couldn't Get Any Crueler – Stephen Yale-Loehr, New York Times
- How Should the Federal Reserve Deal With the AI Bubble? – Robert Kuttner, American Prospect
- How the Great Gas Crisis of 2030 Will Play Out – David Fickling, Bloomberg
- Why Republicans Struggle to Prove the Danger of Socialism – Marc Short, Washington Post
- Trump Has Made More Trades Than All of Congress Combined – Gregory Korte and Adreinne Tong, Bloomberg