Current Federal Debt and Deficit
Every month, the U.S. Treasury releases data on the federal budget, including the current deficit or surplus. The following reflects budget data for August, the eleventh month of fiscal year (FY) 2026. It indicates that the nation has already amassed an approximately $2 trillion deficit and its first annual $1 trillion net interest bill.
Current Federal Deficit
$167B
Federal Budget Deficit for August FY26
$345B
Federal Budget Deficit for August FY25
The federal government reported a $167 billion deficit in August FY26, down $178 billion from the $345 billion deficit recorded in August FY25. However, September 1, 2025, fell on a weekend, shifting certain payments into August of that year. Additionally, August 1, 2026, also fell on a weekend, which shifted certain payments into July 2026. Without those timing shifts, the August FY26 deficit would have been $9 billion larger than the previous year.
Spending in August FY26 was $527 billion, $162 billion less than in August last year. Excluding the timing shift effects, spending was $25 billion more than in the same period last year. The largest driver of the increase was a $14 billion rise in outlays related to Veterans Affairs. Receipts were up by $16 billion in August FY26 compared to the previous year, driven by a $26 billion increase in collection of individual income taxes. Partially offsetting that was a $17 billion decline in customs duties collected.
Cumulative Federal Deficit
$2T
Cumulative FY26 Deficit
$2T
Cumulative FY25 Deficit (through August FY25)
Eleven months through FY26, the deficit was $8 billion below last year’s level. However, that slight decline reflects the same September FY25 timing shift mentioned above. Excluding the effects of payments shifted from September 1, 2025, into August, FY26’s deficit was $80 billion above last year’s tally at this point in the year.
Total outlays were $6.8 trillion, $147 billion higher than the same period in the previous year. That spending increase was driven mainly by one category: net interest rose by $84 billion, exceeding $1 trillion for the first time in U.S. history. Other categories that saw significant increases were Social Security spending up by $79 billion, stemming from cost-of-living adjustments and some retroactive payments; and Medicare outlays increased by $73 billion. Partially offsetting those and other increases was an $83 billion decrease in Department of Education outlays, largely driven by a recent, sizeable downward re-estimate of outstanding loans that did not occur last year. This decline reflects a unique accounting treatment for loan programs that records upward and downward re-estimates on an accrual, rather than a cash, basis.
Receipts are up by $154 billion in FY26 compared to the previous year: individual income tax receipts have increased by $190 billion, and collection of payroll taxes is up $49 billion. Partially offsetting those and other revenue gains is a $95 billion decrease in corporate income tax collections.
National Debt
$32.2T
Debt Held by the Public at the end of August FY26
$29.9T
Debt Held by the Public at the end of August FY25
The FY26 deficit through the first eleven months has already exceeded the Congressional Budget Office’s estimate for the entire year. The debt held by the public is approaching its post-World War II high as a percentage of gross domestic product and is rising rapidly, driven by aging demographics, rising healthcare costs, inadequate revenues, and skyrocketing interest costs. The good news is that many solutions are available to improve our fiscal outlook and put our nation on a stronger path.