US federal deficit nears $2 trillion as debt interest and entitlement spending surge

The Congressional Budget Office’s June review shows the U.S. fiscal year 2026 deficit reached $1.373 trillion through the first nine months, $35 billion higher than a year earlier, and is on track to approach $2 trillion for the full year. Federal spending rose $178 billion while revenues increased $142 billion. The largest spending increase came from net interest on the more than $39 trillion national debt, up $98 billion (13%) due to a larger debt balance and higher long‑term rates. Mandatory program outlays also grew sharply: Social Security benefits rose $62 billion (5%), Medicare $58 billion (8%) and Medicaid $49 billion (10%). Corporate tax receipts fell $86 billion following the “One Big Beautiful Bill,” while individual income and payroll taxes grew $169 billion. The national debt now exceeds the size of the economy, a level not seen since World War II. Maya MacGuineas of the Committee for a Responsible Federal Budget warned, “We will likely borrow $2 trillion or more this fiscal year – an astounding figure… This is likely the tip of the iceberg.” She cautioned that Social Security and Medicare trust funds could be exhausted within seven years if spending is not curtailed.