FY2026 budget deficit of $1.992 trillion is five-year high

• September 2025 saw a $198 billion surplus.
• Outlays came in at $585 billion, compared with $346 billion a year earlier.
• Receipts totalled $558 billion versus $544 billion in the same month last year.
• The full-year deficit for fiscal 2026 was $1.992 trillion, up from $1.775 trillion in FY2025 and the highest in five years.
• Gross interest on the debt hit a record $1.36 trillion in FY2026, a $144 billion or 12% increase.

Interest payments have become the primary factor behind the deficit. The $144 billion jump in interest expenses represents roughly two-thirds of the $217 billion widening in the annual shortfall. With the Treasury continuing to refinance debt at elevated rates and the Federal Reserve considering rate increases rather than reductions, that figure is set to climb further.

Customs data provided the most noteworthy details in the report. Gross customs income stood at $25.27 billion, close to the recent average. However, refunds totalling $19.36 billion absorbed 77% of that amount, resulting in net customs revenue of only $5.91 billion.

The shift from a $198 billion surplus to a $27 billion deficit on a monthly basis was driven largely by spending, which surged $239 billion year over year, while revenue increased just 2.6%. Comparisons with September of the prior year are often distorted by payment schedules, making the annual figure the key metric.

Regardless, the headline captures the situation: the United States is in a deep fiscal deficit, and current economic conditions represent the good times. Difficult periods lie ahead, and there is no prospect of growing out of the problem.