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 July, the tenth month of fiscal year (FY) 2026.
Current Federal Deficit
$432B
Federal Budget Deficit for July FY26
$291B
Federal Budget Deficit for July FY25
The federal government reported a $432 billion deficit in July FY26, up $141 billion from the $291 billion deficit recorded in July FY25. However, August 1, 2026, fell on a weekend, which shifted certain payments into July of this year. Without that timing shift, the July FY26 deficit would have been $42 billion larger than the previous year.
Spending in July FY26 was $766 billion, $137 billion more than in July last year. Excluding the effect of the timing shift, spending was $38 billion more than in the same period last year. The largest driver of increased spending was a $20 billion increase in outlays by the Department of Housing and Urban Development due to a downward revision in estimated costs last year that did not occur this year. Other categories that saw significant increases were net interest costs ($12 billion more than July FY25) and Medicare ($9 billion). Receipts were down by $5 billion in July FY26 compared to the previous year, driven by an overall $36 billion decline in net customs duties compared to last July. In July 2025, $28 billion was collected via tariffs that the Supreme Court has since ruled unconstitutional, so, as a result, the federal government has begun issuing refunds. July 2026 saw a net outflow of $9 billion. A $28 billion increase in individual income tax collections partially offset the overall decline.
Cumulative Federal Deficit
$1.8T
Cumulative FY26 Deficit
$1.6T
Cumulative FY25 Deficit (through July FY25)
Ten months through FY26, the deficit was $170 billion above last year’s level. Total outlays were $6.3 trillion, $310 billion higher than the same period in the previous year. However, that growth is affected by the same aforementioned timing shift. Excluding the effects of payments shifted from August 1, 2026, into July, FY26’s deficit was $72 billion above last year’s tally at this point in the year.
That spending increase was driven mainly by three categories: net interest rose by $91 billion; Social Security spending was up by $71 billion, stemming from cost-of-living adjustments and some retroactive payments; and Medicare outlays increased by $65 billion. Partially offsetting those and other increases was a $79 billion decrease in Department of Education outlays that was 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 $139 billion in FY26 compared to the previous year: individual income tax receipts have increased by $164 billion, and collection of payroll taxes is up $42 billion. Partially offsetting those and other revenue gains is a $94 billion decrease in corporate income tax collections.
National Debt
$31.9T
Debt Held by the Public at the end of July FY26
$29.4T
Debt Held by the Public at the end of July FY25
The FY26 deficit through the first ten months is the second largest in the last six years. 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.