The US federal budget deficit is on track to cross $2 trillion in fiscal year 2026, marking one of the largest shortfalls ever recorded. The widening deficit is being driven by federal spending growing much faster than government tax revenues, putting increasing pressure on US government finances.
According to the nonpartisan Congressional Budget Office (CBO), the federal government recorded a deficit of nearly $1.8 trillion during the first 10 months of fiscal year 2026. The figure is $169 billion higher than the deficit recorded during the same period in fiscal year 2025. The US fiscal year ends on September 30.
Federal spending increased by $308 billion compared with the previous year, while tax receipts rose by only $139 billion during the period. The widening gap between spending and revenue has pushed the deficit higher.
Based on data available through the end of July, the CBO now estimates that the full-year 2026 deficit could reach around $2.1 trillion. That would be $200 billion higher than the deficit recorded in fiscal year 2025, highlighting the growing borrowing requirements of the US government.
