The United States has already run a $1 trillion federal deficit in the first five months off fiscal year 2026, according to the Congressional Budget Office, with February alone adding another $308 billion.
That works out to roughly $50 billion in borrowing each week. On paper, there is one bit of relief. The shortfall is $142 billion smaller than it was during the same stretch a year earlier. But that does not mean Washington has suddenly become frugal.
Higher revenue has not fixed the federal budget gap
In practical terms, the improvement came mostly from stronger revenue, not from a meaningful pullback in spending. CBO says receipts reached about $2.1 trillion in the first five months of the fiscal year, up $206 billion from a year earlier, while outlays rose to about $3.1 trillion.
Reuters reported that revenues were up 11% and spending was still up 2% year-over-year. So yes, the gap narrowed. But the government is still spending at a pace that keeps the deficit enormous.
Rising interest costs are becoming the bigger warning sign
Why does that matter? Because the bill for all that borrowing keeps getting heavier. CBO says net interest outlays rose by $31 billion in the first five months of fiscal 2026.
Its broader budget outlook projects net interest will top $1 trillion in 2026. The U.S. Treasury’s own daily debt data showed total public debt outstanding at about $38.9 trillion on March 12, 2026. For most people, that may sound like distant Washington math.
But the more money that goes to interest, the less room there is for everything else lawmakers say they want, from defense to tax relief to basic services people actually notice in daily life.
That is why Maya MacGuineas of the Committee for a Responsible Federal Budget warned that “this cannot be sustainable.” Her group says interest payments are on track to exceed $1 trillion this year and could surpass $2 trillion by 2036. CBO’s own long-term outlook points in the same direction.
It projects a 2026 deficit of about $1.9 trillion, or 5.8% of GDP, rising to 6.7% of GDP by 2036. In other words, the budget picture may look slightly better than last year’s for the moment, but the deeper problem is still very much alive. And growing.
The official statement was published on the Congressional Budget Office.
