U.S. Federal Budget Deficit Near $2 Trillion in Fiscal Year 2026

The Treasury Department reported that the federal budget deficit for the fiscal year that ended on September 30 was $1.992 trillion, about 12 percent higher than the prior year’s $1.775 trillion shortfall. This marks the third-largest annual deficit in U.S. history and the 25th consecutive year the government has operated in the red.

U.S. Budget Deficit Swells To Nearly $2 Trillion For Fiscal 2026, Marking 25th Straight Year In The Red US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it The Epoch TimesCNBC

Deficits have widened since the pandemic-era stimulus of 2020-2021, when emergency spending pushed the gap above $2 trillion. A combination of higher interest rates, a Supreme Court-mandated refund of roughly $145 billion in tariff revenues, and the 2025 “One Big Beautiful Bill” corporate tax cuts have reignited the shortfall. Treasury Secretary Scott Bessent linked the increase to “tariff refunds” and to a “war” that elevated borrowing costs.

New York Times

• Deficit: $1.992 trillion (?12 % higher YoY).

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• Receipts: $5.40 trillion, a record increase of 3 %.

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• Outlays: $7.40 trillion, up 6 %.

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• Debt-service outlays: $1.36 trillion, a 12 % jump; net interest exceeded $1 trillion for the first time.

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• Social Security: $1.667 trillion (largest single expense).

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• Medicare: $1.073 trillion; Health care: $1.026 trillion.

The Epoch Times

• Defense: $965 billion.

The Epoch Times

• Corporate income tax receipts: down about $70 billion, attributed to the tax-cut package.

CNN

• National debt: surpassed $40 trillion, with the deficit representing about 6.2 % of GDP.

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

Bond traders have responded to the expanding debt load with higher yields; the 10-year Treasury note reached its highest level since 2002, pushing mortgage and consumer loan rates upward. The heightened borrowing cost raises the government’s expense on future debt issuance and tightens fiscal flexibility ahead of the upcoming midterm elections. Voter surveys show a majority view the growing debt as a threat to inflation and affordability, increasing pressure on lawmakers to address the trajectory.

The Epoch Times

He also suggested the deficit may have peaked under the current administration.

U.S. Budget Deficit Swells To Nearly $2 Trillion For Fiscal 2026, Marking 25th Straight Year In The Red

Michael A.

The Epoch Times

Sources differ on the precise deficit figure: some describe it as “nearly $2 trillion,” others cite $1.99 trillion, while Treasury data specify $1.992 trillion. The extent to which Supreme Court rulings on tariffs versus broader economic conditions contributed remains variably quantified across reports.

US budget deficit swells to $1.99 trillion, its biggest in 5 years, and the peso feels it

• “It is up this year because of tariff refunds,” — Scott Bessent, treasury secretary

The Epoch Times

• “Clearly, we can’t keep going like we have. Our fiscal path has been running backwards for far too long; it’s time to start working on the path forward,” — Maya MacGuineas, Committee for a Responsible Federal Budget

The Epoch Times

Congress will confront the debt-ceiling limit next year, and the new Congress is expected to debate measures to curb the deficit as the nation approaches the upcoming election cycle.

New York Times