Politics
UNDERREPORTED
Federal deficit jumps 12% to $1.99 trillion as spending outpaces revenue
The U.S. federal deficit rose 12% to $1.99 trillion in FY 2026, while tax receipts grew 3% but overall spending increased 6% to $7.4 trillion.
After a 4% decline the previous year, the deficit expanded to $1.99 trillion, a 12% rise. Tax revenue climbed 3%, with individual income and payroll taxes each up 6%. Federal outlays reached $7.4 trillion, up 6%, driven mainly by mandatory programs. Discretionary spending grew modestly, including a 5% increase for the Pentagon despite the Iran war, while cuts hit semiconductor subsidies, the EPA and SNAP.
Why it matters
Rising deficits despite higher revenues signal growing fiscal pressure on the U.S. economy.
In this story
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