U.S. Fiscal 2026 Deficit Reaches $1.992 Trillion, Up 12%

The U.S. closed fiscal 2026 with a $1.992 trillion federal deficit, 12% above the prior year, extending a 25-year run of shortfalls as borrowing costs climbed.

Fiscal 2026 ended Sept. 30. The deficit rose from $1.775 trillion in fiscal 2025, making the latest gap the third largest on record, behind those in 2020 and 2021. The final figure is close to an earlier near-$2 trillion deficit estimate. The United States has recorded deficits in 25 consecutive fiscal years; its last surplus was in 2001.

Federal receipts and outlays both set records. Social Security spending approached $1.7 trillion, up from roughly $1.6 trillion in fiscal 2025. Medicare spending reached almost $1.1 trillion, compared with slightly less than $1 trillion a year earlier.

Net interest costs topped $1 trillion, up from $970 billion in fiscal 2025. Net interest subtracts the interest the Treasury receives from its gross interest costs. Gross interest payments on the national public debt exceeded $1.3 trillion. The total debt owed passed $40 trillion earlier this year and has more than doubled over the past decade.

Individual income taxes brought in more than $2.8 trillion, about 7% more than in fiscal 2025, helping offset the deficit. Corporate income-tax receipts fell about $70 billion to $381 billion. The decline was tied to tax cuts in the One Big Beautiful Bill Act, passed last year.

Gross customs duties reached a record, but refunds reduced total customs revenue. The refunds followed a Supreme Court ruling earlier this year that many tariffs imposed by President Donald Trump were unconstitutional.

September ended with a $27 billion deficit, compared with a $198 billion surplus in September 2025. The rising debt bill has weighed on bond-market sentiment, with 10-year and 30-year Treasury yields reaching 24-year highs last week.