The US budget deficit reached $2.0 trillion in fiscal 2026, the Congressional Budget Office (CBO) said on November 9. That was 12% above 2025.
CBO recorded $5.4 trillion in revenue and $7.4 trillion in spending. In other words, the gap was about $27 per $100 spent, a Likiweeks calculation from CBO totals.
What the US budget deficit measures
The Congressional Research Service explains the basic rule: a deficit means the government spends more than it takes in. Debt, by contrast, is borrowing built up over time. Borrowing to cover an annual gap adds to that debt.
The federal fiscal year is its accounting year, according to CBO’s budget guide. It runs from October 1 through September 30 and takes the name of the year in which it ends. Thus, fiscal 2026 covered October 1, 2025, through September 30, 2026.
CBO puts the deficit at 6.2% of gross domestic product (GDP), against a 50-year average of 3.8%. Its guide defines GDP as the value of goods and services produced in the economy. So the comparison shows how large the gap is for the economy, not just how many dollars it involves.
Spending behind the US budget deficit
The chart compares five types of spending in CBO’s review. However, its interest figure leaves out some payments and receipts counted in the broader net interest total.
Selected US federal spending, fiscal 2026
Source: CBO, Table 3
Data as of: 2026-09-30
Interest exceeded military spending. Selected categories only; Medicare is net of offsetting receipts.
| Category | Spending |
|---|---|
| Social Security benefits | 1,654 USD billion |
| Net interest on public debt | 1,142 USD billion |
| Medicare | 1,069 USD billion |
| Defense Department military activities | 917 USD billion |
| Medicaid | 723 USD billion |
CBO’s guide explains that “mandatory” spending usually follows rules set in law, such as who gets benefits and how much. In contrast, Congress sets funds for “discretionary” programs through spending bills. Thus, the labels describe how funds reach a program, not how useful it is.
The guide also explains why Medicare’s figure is net: some income, including premiums, counts as a reduction in recorded spending. So totals need the same labels to make a fair comparison.
Debt and the next forecast
CBO puts debt held by the public at 100% of GDP. That total leaves out debt owed to government accounts, the Congressional Research Service explains. For example, gross debt also counts debt held within the government. The two totals therefore measure different things.
Interest links past borrowing to each year’s budget. The Congressional Research Service explains that interest costs already count toward the deficit. So they are not an extra bill to add to the reported gap.
CBO plans to release its next budget and economic outlook in early 2027.
Sources: CBO fiscal review, CBO budget guide, Congressional Research Service
