Sen. Rand Paul (R-Ky.) says the biggest threat to America’s national security isn’t Iran. It’s the nearly $40 trillion the country owes.
Defense Secretary Pete Hegseth asked Congress on Tuesday for an additional $67 billion to fund the war in Iran, on top of a proposed jump in the Pentagon’s base budget from roughly $1 trillion to $1.5 trillion. He also disclosed the war has already cost taxpayers $37.5 billion, up from a $29 billion estimate in May.
“It is completely and utterly fiscally irresponsible,” Paul said in a Bloomberg interview on Tuesday.
A War Nobody Voted On
“We are more in danger of devaluing our currency than we are of Iran invading the United States,” Paul said, echoing Admiral Mike Mullen’s famous warning that debt, not any foreign adversary, is the top threat to national security.
The national debt sits near $39.6 trillion, and traders on Kalshi price a 97% chance it crosses $40 trillion under the current administration, with the market forecasting a peak of $48 trillion.
Net interest payments are projected to top $1 trillion this fiscal year, according to the Congressional Budget Office, more than the government expects to spend on national defense. Polymarket traders assign an 18% chance of another U.S. debt downgrade before 2027.
Paul also argued the war lacks constitutional footing, noting Congress never voted on it. “The initiation of war, the declaration of war, was given specifically to the legislature,” he said.
Traders See a Deal Slipping Away
Paul said the bombing campaign has left Washington “farther away” from a deal, not closer.
Odds of a final U.S.-Iran nuclear deal by July 31 recently collapsed to around 1% on Polymarket. Year-end is priced at 33%.
Traders also assign a 30% chance the U.S. launches a ground invasion of Iran before 2027, up 3% from Tuesday, a scenario Paul suggested would require a couple hundred thousand troops.
Defense Stocks Aren’t a Sure Bet
Whatever Congress decides, the restocking cycle is already in play. The supplemental request earmarks $21 billion for munitions alone, according to an OMB letter to Congress, while more than half of the proposed $1.5 trillion budget would reportedly go toward restocking munitions and weapons systems.
The trade has been uneven, however. Lockheed Martin (NYSE:LMT) hit an all-time high near $692 in March amid the escalation, but has since given back most of those gains following a disappointing first-quarter report.
Meanwhile, the inflation Paul warned about is showing up at the pump. Brent crude traded near $94 on Wednesday, up roughly $3 from the prior session, after an eleventh consecutive night of U.S. strikes, a tailwind for Exxon Mobil (NYSE:XOM) and Chevron Corp (NYSE:CVX).
Image: Shutterstock
Kalshi and Benzinga have an existing data collaboration agreement.
