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Federal budget deficit projected to reach $2.1 trillion in FY2026
Fox Business • • business
Key Points:
- The Congressional Budget Office (CBO) projects the federal budget deficit for fiscal year 2026 to exceed $2.1 trillion, marking one of the largest shortfalls on record due to spending growth outpacing tax revenues.
- Federal spending increased by $308 billion in the first 10 months of fiscal year 2026, driven largely by higher costs for servicing the national debt and rising expenses for Social Security, Medicare, and Medicaid.
- Tax revenues rose by $202 billion, mainly from payroll and individual taxes, but corporate income tax collections fell by $89 billion due to expanded deductions under recent legislation.
- The increase in interest payments on the national debt, up 14% or $117 billion, is attributed to higher long-term interest rates and the growing $39 trillion national debt.
- Fiscal experts warn that the growing deficit and national debt levels are unsustainable, urging lawmakers to set realistic fiscal targets and take bipartisan action to address the country's worsening fiscal situation.
