Federal deficit totaled $1 trillion in beginning of FY2026, CBO says

The CBO estimated the government brought in $2.1 trillion in the first five months of the fiscal year, roughly $206 billion more than the same time period last fiscal year.

Maya McGuineas, president of the Committee for a Responsible Federal Budget, called on Congress to decrease federal spending deficits.

“Another month of this fiscal year means another month of borrowing,” McGuineas said. “This cannot be sustainable.”

Collection of customs duties, or money received from tariffs, increased by $109 billion in the first five months of fiscal 2026 compared to the previous fiscal year.

Payments received by corporate income taxes decreased by $33 billion in fiscal year 2026. The government also received a $77 billion increase from income and payroll taxes and a $52 billion increase in withholdings from paychecks.

The government spent $3.1 trillion in the first five months of fiscal year 2026, a $64 billion increase from the same time period last fiscal year.

Spending on Social Security, Medicare and Medicaid made up the largest portions of government expenditures over the last five months. Social Security benefits spending rose by $48 billion, in part due to the enactment of the Social Security Fairness Act that increased payments for certain recipients, beginning in March 2025.

Medicare payments increased by $34 billion, which included a $16 billion settlement for Part D prescription drug plans in November 2025. Medicaid payments increased by $22 billion, due to rising enrollment costs.

February in particular saw a substantial increase in the deficit compared to the same period last year. The federal government took on $308 billion in February 2026, $1 billion more than in February 2025.

The CBO explained this deficit figure would have been substantially larger if payments for the federal government were not changed since Feb. 1 and March 1 fell on weekends. In February, defense spending increased by $6 billion; interest on debt increased by $6 billion; and Social Security increased by $10 billion. 

Overall, CBO projected the government would see a $1.9 trillion deficit for fiscal year 2026, with the debt to surpass records by 2030. MacGuineas called on Congressional leaders to take a firm approach against deficit spending and enact a 3% deficit-to-GDP target.

“Our fiscal problems will not solve themselves,” MacGuineas said. “We need policymakers to come together, agree to reduce deficits – a 3% deficit-to-GDP target would be a great start – and put our national debt on a downward sustainable path as a share of the economy.”