US federal budget deficit reaches $2 trillion in fiscal year 2026

The United States federal budget deficit reached approximately $2 trillion in fiscal year 2026, according to data from the Congressional Budget Office (CBO). This represents a 12% increase from the $1.775 trillion deficit recorded in fiscal year 2025.

While federal tax receipts grew by 3% to over $5.4 trillion, spending rose by 6% to nearly $7.4 trillion. The largest driver of the deficit was net interest expenses on the national debt, which increased by $115 billion (11%) due to a larger total debt and higher long-term interest rates.

Other significant spending increases included: • Social Security: Rose by $86 billion (5%) due to more beneficiaries and higher average benefits. • Medicare and Medicaid: Both saw an 8% increase in spending, driven by higher enrollment and rising costs per enrollee. • Military spending: Increased by 5%, or $48 billion, with notable growth in research and development.