Federal Deficit Hits $1.99 Trillion in Fiscal 2026 as National Debt Tops $40 Trillion

The federal deficit for fiscal year 2026, which ended Sept. 30, reached roughly $1.99 trillion, Treasury Department data released Oct. 16 show -- a 12% increase over fiscal 2025 and the third-highest deficit on record. Federal debt surpassed $40 trillion for the first time. Receipts rose 3% to a record $5.4 trillion and spending rose 6% to a record $7.4 trillion, while net interest costs hit a record $1.36 trillion, accounting for more than half of the year's increase in the deficit.

Tariff revenue fell about 11% to roughly $173 billion after the Supreme Court struck down several tariffs earlier in the year, triggering an estimated $145 billion in refunds; the Congressional Budget Office separately estimated in August that the administration's trade policy would add about $900 billion to deficits over the next decade.

Treasury Secretary Scott Bessent has said the US can "grow our way out of" the debt; a Boston University finance professor called the spending path "not sustainable." Trump has proposed additional $5,000 payments to most adults after the November midterms, which the Tax Foundation estimated could cost roughly $1.25 trillion.