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The Congressional Budget Office reports the federal budget deficit reached $2 trillion in the first 11 months of fiscal year 2026.

The Congressional Budget Office reported that the federal government's annual budget deficit reached $2 trillion during the first 11 months of fiscal year 2026. While the total was $6 billion lower than the same period last year, the CBO noted that the deficit would have been $82 billion higher if not for shifts in the timing of payments around Labor Day in 2025.

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Federal spending increased by $147 billion, or 2%, compared to last year, primarily driven by mandatory spending programs such as Social Security, Medicare, and Medicaid. Interest expenses on the national debt also rose by $111 billion, or 12%, due to higher long-term interest rates and a larger national debt. Tax receipts rose by $154 billion, or 3%, during this period. Individual income tax receipts increased by $189 billion, while payroll taxes rose by $50 billion. These gains were partially offset by a $96 billion decline in corporate income taxes resulting from tax reforms under the One Big Beautiful Bill Act.

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