Rising federal spending outpaced revenue growth in FY2026, leaving the U.S. government with a $1.992 trillion budget deficit for the fiscal year. The gap is 12.23 percent larger than in FY2025, and means 26.94 percent of total outlays are not covered by receipts.
Highlights
- U.S. federal government posts a $26.900 billion deficit in September 2026 with $584.775 billion in outlays and $557.875 billion in receipts.
- FY2026 deficit widens to $1.992 trillion as net outlays rise 5.50 percent to $7.396 trillion, outpacing the 3.22 percent increase in receipts to $5.403 trillion.
- Congressional Budget Office projected a FY2026 deficit of $1.853 trillion, below the actual figure, and forecasts continuing large shortfalls in FY2027 and FY2028.
Fiscal year totals and September figures
As reported by the Joint Economic Committee, the federal government posts a $26.900 billion deficit in September, with monthly net outlays of $584.775 billion and net receipts of $557.875 billion.For the full FY2026 period, net outlays total $7.396 trillion while net receipts reach $5.403 trillion. That leaves the government spending $1.37 for every dollar of revenue collected, underscoring the gap between income and expenditure over the fiscal year.
Budget outlook and spending pressure
FY2026 net outlays are 5.50 percent above the $7.010 trillion recorded in FY2025, while net receipts rise 3.22 percent from $5.235 trillion a year earlier. The faster increase in spending than revenue contributes to the wider annual deficit.The latest 10-year Congressional Budget Office projection puts the FY2026 deficit at $1.853 trillion, below the reported outcome, and forecasts deficits of $1.887 trillion in FY2027 and $2.080 trillion in FY2028. The same projection estimates outlays of $7.772 trillion in FY2027 and $8.151 trillion in FY2028, with receipts expected to reach $5.885 trillion and $6.071 trillion in those years.
Our earlier article on rising long-term Treasury yields examined how borrowing costs above 5% are amplifying pressure on both households (through higher mortgage rates) and the federal government as annual deficits near $2 trillion. It also noted that higher interest rates can mechanically widen future deficits via larger debt-service costs, while political gridlock limits the prospects for near-term deficit reduction even as total U.S. debt continues to climb.
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