Treasury reports a $1.99 trillion federal deficit for fiscal 2026, the largest since fiscal 2021
Treasury puts the gap at an estimated 6.2% of the economy, up from 5.8% in fiscal 2025.
The federal government spent $1.99 trillion more than it took in during fiscal 2026 (the budget year that ended Sept. 30), Treasury reported Friday, Oct. 16. That is $217 billion more than fiscal 2025's $1.78 trillion and, per Reuters, the biggest yearly gap since fiscal 2021's $2.77 trillion, when pandemic relief swelled spending. Higher spending drove it, per Bloomberg and Reuters. The real number. Outlays hit a record $7.40 trillion, up $386 billion, while receipts rose $169 billion to a record $5.40 trillion, per Treasury. Measured against the economy the rise is smaller: 6.2% of GDP against 5.8%, and Treasury would not say what GDP estimate it used, Reuters reported. Still open. Bloomberg reports the result undercuts the administration's cost-cutting claims and keeps the debt on track for a record.
Where the Congressional Budget Office (CBO) says the $386 billion in new spending went:
- Net interest on the debt: +$115 billion
- Social Security: +$86 billion
- Medicare: +$77 billion
- Medicaid: +$55 billion
- Defense: +$48 billion