US fiscal 2026 budget deficit rises to $1.99 trillion, largest in 5 years
SPY•The US budget deficit rose $217 billion to $1.99 trillion in fiscal 2026, the largest shortfall in five years. Record debt-service outlays reached $1.36 trillion, while tariff refunds contributed to a decline in net tariff income.
1. Deficit reaches five-year high
The US budget deficit rose from $1.78 trillion in fiscal 2025 to $1.99 trillion in fiscal 2026, the year ended September 30. It was the largest shortfall since fiscal 2021, when the deficit was $2.77 trillion, and the third-largest annual deficit ever.
2. Receipts and spending rise
Fiscal 2026 receipts set a record at $5.40 trillion, up 3% from the prior year, while outlays reached a record $7.40 trillion, up 6%. Debt-service outlays climbed 12% to a record $1.36 trillion.
3. Tariff refunds weigh on receipts
Net tariff income fell 11% to about $173 billion after a Supreme Court ruling triggered $145 billion of tariff refunds. A Treasury official put the estimated deficit-to-GDP ratio at 6.2%, compared with an actual 5.8% in fiscal 2025.
