The Congressional Budget Office projects that the United States federal budget deficit will climb to approximately $2.1 trillion in fiscal year 2026. This increase is largely due to government expenditures rising more rapidly than tax revenues. As of the first 10 months of the current fiscal year, the federal government has already recorded a deficit nearing $1.8 trillion, which is an increase of about $169 billion compared to the same period the previous year.
A significant factor contributing to the expanding deficit is the rising cost of interest on the national debt. Over the first 10 months, interest payments surged by $117 billion—a 14% rise from the prior year. Meanwhile, federal spending saw an increase of $308 billion, whereas tax receipts only rose by $139 billion in comparison.
Spending on key government programs has also seen a notable rise. Social Security expenditures increased by $70 billion, Medicare by $66 billion, and Medicaid by $45 billion. While there was an uptick in individual and payroll tax collections, the decline in corporate tax revenue played a role in the overall financial picture. Additionally, tariff revenue has been impacted by refunds, further limiting the government’s income.
The CBO anticipates that government spending will remain in line with previous forecasts, yet it now predicts revenue will fall short by about $200 billion compared to earlier projections. This widening deficit raises concerns about the sustainability of U.S. government borrowing and the ballooning national debt.