U.S. Deficit Reaches $1.99 Trillion in Fiscal 2026

The U.S. federal budget deficit reached $1.99 trillion in fiscal 2026, a 12% increase from the previous year and the largest annual shortfall since 2021, Treasury figures released Friday showed. The fiscal year ended September 30. Receipts rose 3% to a record $5.40 trillion, while spending climbed 6% to a record $7.40 trillion. The resulting deficit was $217 billion higher than fiscal 2025’s $1.78 trillion shortfall. The 2026 gap was the third-largest annual deficit on record, after the shortfalls in fiscal 2020 and 2021. Net interest payments on federal debt reached a record $1.36 trillion, up $144 billion from the prior year. The Treasury figures show interest costs were exceeded only by spending on Social Security and the combined programs Medicare and Medicaid. Rising debt and interest rates contributed to the increase, according to reporting on the figures. Customs refunds also added to the shortfall. Treasury reporting put refunds at about $145 billion for the fiscal year, primarily associated with tariffs invalidated by a Supreme Court ruling. Net tariff receipts fell by $22 billion to about $173 billion, according to the figures. The Treasury estimated the deficit at...