U.S. Deficit Climbed to $1.99 Trillion as Spending Outpaced Revenue

The U.S. federal deficit widened to $1.99 trillion in fiscal 2026 as outlays rose faster than receipts, with higher interest costs and more than $100 billion in tariff refunds adding pressure. The shortfall increased from $1.78 trillion in fiscal 2025. Total spending grew 6% to $7.4 trillion, while receipts rose 3% to $5.4 trillion, extending earlier coverage of the fiscal 2026 deficit . Higher defense and Social Security expenses, along with an increase of more than $100 billion in interest costs, contributed to the spending rise. Falling corporate tax revenue also limited receipts. The government faced more than $100 billion in tariff refunds after the Supreme Court invalidated tariffs imposed by Trump on national-security grounds. Federal debt surpassed $40 trillion in August.

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