The U.S. federal deficit totaled nearly $1.4 trillion through the first nine months of fiscal year 2026, according to the Congressional Budget Office. Treasury borrowing remained elevated while interest payments on the national debt increased, reflecting higher debt levels and sustained borrowing costs.
Key Takeaways
- The federal deficit approached $1.4 trillion during the first nine months of FY2026.
- Treasury borrowing averaged about $155 billion per month during the fiscal year.
- Net interest payments on the national debt reached approximately $857 billion.
- Higher debt levels and elevated interest rates increased federal interest expenses.
- Social Security, Medicare, and Medicaid spending also rose during the period.
The US federal deficit reached nearly $1.4 trillion during the first nine months of fiscal year 2026, according to the latest monthly budget review released by the Congressional Budget Office (CBO). The report showed continued growth in Treasury borrowing alongside higher interest costs on the national debt, increasing pressure on the federal budget.
The fiscal year began in October 2025, and by the end of June 2026, the cumulative deficit had reached just under $1.4 trillion. That figure exceeded the deficit recorded during the same nine-month period of fiscal year 2025, indicating higher government borrowing compared with a year earlier.
Treasury borrowing averaged roughly $155 billion per month through the fiscal year to date. At the same time, the total U.S. national debt stood at approximately $39.4 trillion, accumulated across multiple administrations. The figures add to concerns raised in a related report on how the US debt surpassed GDP, illustrating the scale of the federal government’s borrowing obligations.
What Did the Congressional Budget Office Report?
The Congressional Budget Office reported that the federal government’s net interest payments on public debt reached approximately $857 billion during the first nine months of fiscal year 2026.
That amount represents an increase of roughly $100 billion, or about 13%, compared with the same period in fiscal year 2025. According to the CBO, the increase resulted from both a larger outstanding debt balance and higher long-term interest rates.
The pace of borrowing has also remained substantial. Based on the fiscal year-to-date figures, Treasury borrowing averaged about $155 billion each month, equivalent to approximately $39 billion each week.
Interest Costs Compared With Other Federal Spending
The CBO data showed that interest expenses exceeded the combined spending for several federal departments and programs. Net interest outlays were approximately $20 billion higher than the combined expenditures for the Departments of Defense, Commerce, Homeland Security, Education, the Environmental Protection Agency, the Small Business Administration, and refundable coronavirus tax credit programs during the reported period.
The comparison illustrates the growing share of federal resources devoted to servicing existing debt rather than funding government operations or public programs.
Why Have US Interest Payments Increased?
The increase in US Treasury interest payments reflects two primary factors identified by the Congressional Budget Office.
First, the federal government is carrying a larger amount of outstanding debt than it did one year earlier. As total borrowing increases, the amount of debt requiring interest payments also rises.
Second, long-term interest rates remain higher than levels seen in earlier years. Debt issued or refinanced at higher yields increases the government’s financing costs, raising overall interest expenses even without significant changes in federal spending programs.
As a result, net interest payments reached approximately $857 billion during the first nine months of fiscal year 2026, equivalent to roughly $24 billion each week.
The CBO attributed the higher interest costs directly to the combination of increased debt and elevated borrowing rates.
What Is Driving Federal Spending Higher?
Alongside higher interest costs, mandatory spending programs continued to account for a significant share of federal outlays.
Changes in Social Security, Medicare, and Medicaid Outlays
According to the Congressional Budget Office, Social Security spending increased by approximately $62 billion, or 5%, during the reporting period. The increase reflected both higher average benefit payments and a larger number of beneficiaries.
Medicare spending rose by about $58 billion, representing an increase of 8%. The CBO attributed the growth to higher enrollment and increased payment rates for healthcare services.
Medicaid spending also expanded during the period, increasing by approximately $49 billion, or 10%. The report stated that higher costs per enrollee contributed to the increase.
These mandatory spending programs remain among the largest components of the federal budget and continued to grow during fiscal year 2026.
Population data released by the U.S. Census Bureau also showed that the country’s median age increased from 39.2 years in 2024 to 39.4 years in 2025. The Census Bureau also reported an increase in the ratio of men to women within the population aged 65 and older, reflecting continued demographic changes that affect federal benefit programs.
How Does the FY2026 Deficit Compare With Last Year?
The fiscal year 2026 deficit has already surpassed the amount recorded during the same point in fiscal year 2025.
Through the first nine months of fiscal year 2025, the federal deficit totaled just over $1.3 trillion. The latest CBO figures place fiscal year 2026 at nearly $1.4 trillion over the equivalent period.
The increase reflects growth in both spending and interest costs, while borrowing has continued throughout the fiscal year.
Average monthly borrowing reached approximately $155 billion between October 2025 and June 2026. Based on those figures, weekly borrowing averaged around $39 billion.
The higher deficit also coincided with increased interest obligations, making debt servicing one of the largest categories of federal expenditures during the reporting period.
What Are Fiscal Experts Saying About the Budget Outlook?
The latest budget figures have prompted renewed attention from organizations that monitor federal fiscal policy.
The Committee for a Responsible Federal Budget stated that the fiscal year 2026 deficit has already exceeded the comparable fiscal year 2025 level and indicated that total borrowing for the full fiscal year could exceed $2 trillion if current trends continue.
The organization also pointed to projected financial pressures facing Social Security and Medicare trust funds over the coming years, arguing that policymakers will need to address long-term budget sustainability.
Among the proposals supported by the committee is reducing annual federal deficits to approximately 3% of gross domestic product through a combination of spending restraint and increased revenue. Separate proposals for addressing fiscal challenges have also emerged, including Federal Reserve reform task forces focused on monetary policy and central bank governance.
The Congressional Budget Office’s latest monthly budget review provides updated data on current federal finances but does not recommend specific policy actions. Its report documents revenue, spending, borrowing, and debt service costs based on existing law and current fiscal conditions.
Frequently Asked Questions
What is the US federal deficit for fiscal year 2026 so far?
According to the Congressional Budget Office, the U.S. federal deficit totaled nearly $1.4 trillion during the first nine months of fiscal year 2026.
Why are US Treasury interest payments increasing?
The Congressional Budget Office said higher interest payments resulted from a larger national debt and higher long-term interest rates.
How much has the US government borrowed in FY2026?
Treasury borrowing averaged approximately $155 billion per month during the first nine months of fiscal year 2026.
What factors contributed to the higher federal deficit?
Higher net interest costs, along with increased spending on Social Security, Medicare, and Medicaid, contributed to the larger deficit compared with the same period in fiscal year 2025.
