US budget deficit rises 12% to almost $2 trillion in fiscal 2026, Treasury says

The US government recorded a budget deficit of $1.992 trillion in the 2026 fiscal year, which ended on 30 September, about 12% more than the $1.775 trillion deficit a year earlier, the Treasury Department reported on Friday (US time).

It is the third-largest annual deficit on record, after 2020 and 2021, and the 25th consecutive year in deficit, CNBC reported. Both receipts and spending reached record totals for the year, according to a Treasury official quoted by CNBC.

Social Security was the largest spending item at nearly $1.7 trillion, followed by Medicare at almost $1.1 trillion. Net interest on the debt, which is gross interest paid minus interest received, exceeded $1 trillion, up from $970 billion in fiscal 2025, CNBC reported.

Individual income taxes brought in more than $2.8 trillion, up about 7%. Corporate income tax receipts were $381 billion, about $70 billion less than the year before, which CNBC attributed to tax cuts in the One Big Beautiful Bill Act passed last year.

Gross customs duties reached a record for the year, but total customs revenue was reduced by refunds paid after the Supreme Court ruled earlier this year that many of President Donald Trump’s tariffs were unconstitutional, the Treasury official said, according to CNBC.

For September alone, the government ran a deficit of $27 billion, compared with a surplus of $198 billion in September 2025.