The United States closed fiscal 2026 with a budget deficit of 1.992 trillion dollars, about 12 percent higher than the 1.775 trillion dollars recorded in fiscal 2025, the Treasury Department reported on Friday. Only the pandemic years of 2020 and 2021 produced larger annual deficits, and fiscal 2026 was the 25th straight year in deficit. The last surplus was in 2001.
September alone swung sharply. The month recorded a deficit of 27 billion dollars, against a surplus of 198 billion dollars in September of the previous year.
Spending on the largest programmes kept rising. Social Security cost nearly 1.7 trillion dollars, up from roughly 1.6 trillion dollars in fiscal 2025, and Medicare cost almost 1.1 trillion dollars, up from slightly under 1 trillion dollars. Net interest on the debt topped 1 trillion dollars, from 970 billion dollars a year earlier, and gross interest paid exceeded 1.3 trillion dollars. Total federal debt passed 40 trillion dollars earlier this year and has more than doubled over the past decade.
Receipts were a record in aggregate, a Treasury official said, but the mix shifted. Individual income tax receipts rose about 7 percent to more than 2.8 trillion dollars, while corporate income tax receipts fell about 70 billion dollars to 381 billion dollars, a decline attributed to the tax cuts in the One Big Beautiful Bill Act. Gross customs duties hit a record, though total customs revenue was reduced by refunds, running into billions of dollars paid back to retailers, after a Supreme Court ruling earlier this year that many of the Trump tariffs were unconstitutional.
The figures land a week after 10 year and 30 year Treasury yields reached 24 year highs. Treasury Secretary Scott Bessent told CNBC in August that the United States can grow its way out of the debt. The fiscal 2026 outcome tests that claim against an interest bill that is now itself one of the largest lines in the budget.