Treasury expected to borrow $2 trillion this year-more than $166 billion every month

Key Points:

• The Office of Management and Budget (OMB) projects a $2.17 trillion federal deficit for fiscal year 2027, averaging about $181 billion in monthly debt issuance starting October, up from over $166 billion monthly this year.
• The Congressional Budget Office (CBO) had estimated lower deficits of $1.85 trillion for the current fiscal year and $1.89 trillion for the next year, highlighting a worsening fiscal outlook.
• U.S. national debt is approaching $39 trillion, with interest payments on this debt now rivaling combined government spending on education and defense, costing over $88 billion monthly.
• Experts warn that persistent $2 trillion deficits, once only seen in recessions, pose a serious risk of fiscal crisis and could lead to higher interest rates and reduced investment in the nation’s future amid global competition.
• There is bipartisan support for a 3% deficit-to-GDP limit, which would require roughly $10 trillion in deficit reduction over the next decade, but current deficits exceed 6% of GDP, indicating a significant gap to close.