Trillion dollar gap: US budget deficit swells to nearly $2 tn in fiscal 2026

The US government spent nearly $2 trillion more than it collected in the 2026 fiscal year, widening its budget deficit to the higest in five years. Higher debt payments, tariff refunds and increased spending on social benefits and defence contributed to the rise.The shortfall increased by $217 billion from the previous year, reaching $1.99 trillion, according to figures released by the treasury department on Friday.The deficit, recorded in the year to September 30, was the largest in five years and the third-largest annual shortfall on record. It was also the first full fiscal year of President Donald Trump's second term. The last time the US recorded a bigger deficit was in fiscal 2021, when the shortfall reached $2.77 trillion amid spending on Covid-19 pandemic relief measures.The latest figures show that although government revenue rose to a record, expenditure grew considerably faster.