WASHINGTON — The U.S. government borrowed nearly $2 trillion more than it collected in the 2026 fiscal year, which ended Sept. 30. The Congressional Budget Office (CBO) put the budget deficit at $1.993 trillion in data released Thursday, Fox Business reported.
That is about $218 billion, or 12%, higher than the $1.775 trillion deficit in fiscal 2025.
Deficit versus debt
The deficit is the gap in a single year between what the government spends and what it takes in. The national debt is the total of all past deficits added together. The debt has now passed $40 trillion.
Where the money went
- Revenue: rose about 3% to more than $5.4 trillion.
- Spending: rose about 6% to nearly $7.4 trillion, according to preliminary figures.
- Interest costs: the government’s interest payments on its debt are a growing part of the increase. For the full year, net interest costs on the debt rose by $115 billion, or 11%, the largest increase of any budget category.
Spending on Social Security and Medicare also grew as more people retire and health costs rise.
How it compares
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said the 2026 deficit is among the largest in U.S. history outside of a war or recession. In February, the CBO had projected a deficit of $1.9 trillion for the year, so the final figure came in somewhat higher.
Why it matters
When the government runs large deficits, it has to borrow more by selling Treasury bonds. Larger debt means larger interest payments, which then use up money that could go to other programs or lower taxes. Economists say that over time, heavy borrowing can also push up interest rates for businesses and households. For more on inflation and rates, see our report on the Fed chair’s inflation warning.
The numbers are preliminary, and the Treasury Department will release its own official year-end figures later.
