Overview
- The Congressional Budget Office said in its monthly update on Monday that the federal government ran a nearly $1.8 trillion deficit through the first 10 months of fiscal year 2026 and now expects the full‑year shortfall to be about $2.1 trillion.
- CBO flagged roughly $200 billion of weaker revenue versus its February baseline, mostly because tariff collections fell after a February Supreme Court ruling and U.S. Customs and Border Protection has returned about $100 billion in duties so far.
- Federal outlays rose sharply with net interest payments up about $117 billion and higher spending for Social Security, Medicare and Medicaid accounting for most of the year‑over‑year increase in spending.
- The upward revision leaves borrowing on track to push gross federal debt toward $40 trillion and has prompted fiscal groups, including the Committee for a Responsible Federal Budget, to call for targets and bipartisan policy fixes.
- With the fiscal year ending September 30, the key near‑term risks to watch are continued tariff refund timing, further rises in interest costs that would boost borrowing needs, and any congressional choices that could change revenue or spending trajectories.